Tip Tuesday: Areas of Focus for Companies in Today's Labor Market: Benefits
November 01, 2022

In today’s complex labor environment, companies must examine cost drivers and gaps in coverage to meet employee needs and desires. Why?

  • Companies are bracing for healthcare increases, but strategies for controlling costs vary
  • Benefits are no longer “fringe” but are an important part of employer costs and the “employee compact”
  • Healthcare cost increase projections:
    • Willis Towers Watson- 6% - 7% in 2023; Mercer- 5.6% in 2023; Buck- 5.8% - 6.9%; Segal- 8%
  • Strategies to Control Costs- May be subject to bargaining:
    • Analyze data-work with vendors/providers/brokers
    • “Traditional” cost shifting- premiums, co-pays, etc.
    • Identify high-cost areas and focus oversight on them; engage Centers of Excellence for high-cost procedures- heart, transplant, oncology, etc. to produce better outcomes and lower costs
    • Expand access to virtual care- telemedicine and mental health
    • Bid/switch vendors-providers for lower costs, improved quality, and better outcomes
  • Strategies to improve benefits (and possibly overall costs) include offering responsive choices, voluntary benefits, and work/life benefits (elder, child care; mental health support- EAP, educational assistance, and financial well-being, to name some)
  • Cutting benefits or shifting costs may not be the answer, especially for entry-level, hourly workers
Let us Help You
From labor negotiations support to strategic consultation, we are always ready to help.