AMSTERDAM, June 28, 2023 – Almost half of businesses in the Netherlands (40%) say that rising costs are influencing their strategy for employee benefits. Yet, as companies continue to grapple with attracting and retaining key talent, investment in benefits remains a major priority. That’s according to WTW’s 2023 Benefits Trends Survey (NASDAQ: WTW).
Compared with two years ago, concerns around rising costs have accelerated, as it’s now the third most important issue influencing benefit strategies, despite not even being in the top six issues in 2021.
Yet competition for talent is the number two issue faced by employers in 2023, as 82% of companies cite this as a factor influencing their benefits strategy. In fact, only one-third of organisations (35%) feel that their current benefits plan is effective or highly effective in attracting and retaining key talent.
As a result, a key area of focus for almost half of companies (46%) is to ensure that benefit plans meet the needs of all employees, yet half (51%) look to focus on the plan cost.
However, striking a balance between addressing these conflicting matters might prove a challenge. Employers are anticipating cost to be a top challenge for benefit budgets in the next two years, as 60% say they are concerned about the persistence of higher inflation, while 46% expect an impact from the weakening economy and current business environment.
In a bid to conserve costs, more than half of employers (58%) have taken action to improve terms from vendor contracts, while 73% are planning to take action. A third of companies (32%) have taken action to bundle different services into one package from a single vendor, while 36% plan to do so. And 15% of companies in the Netherlands have secured additional funding for benefit programmes, while a quarter (25%) are planning on doing so.
For some employers, their only option is to cut down on the number of benefits they offer in response to rising costs. 13% of employers have opted to reduce the generosity of their benefit programmes overall, while 15% have plans to do so.
Raymond Wammes, Senior Strategic Consultant at WTW says: “The current state of both the economic and labour market is putting employers in a precarious position, when determining how to win the competition for talent and contend with the rising cost of services, while budgets remain tight.”
“It’s a fine balance between streamlining benefit operations to become more cost-effective, while maintaining a focus on personalised benefit areas that are tailored to the individual needs of the workforce. This requires an optimization of the benefits package.”
“This is especially challenging when employees are demanding increasingly comprehensive benefit provisions which support key areas of inclusive wellbeing, lifestyle and financial protection, and are at the same time environmentally and socially conscious; as a result, employers will not want to backpedal.”
WTW surveyed 60 Dutch organisations across a broad range of industries about their benefit strategies between 1 March 2023 and 14 April 2023 for its 2023 Benefit Trends Survey.
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