The labor market took a turn toward uncertainty in April, raising questions about just how robust the recovery might be. We’re not economists but our money’s on growth, so much of it, in fact, that the labor shortages we saw before the pandemic are sure to return.
Before we get to the implications of that, the reasons for April’s relatively paltry numbers are no great mystery.
First, plenty of Americans were still unvaccinated. Secondly, families given the option of staying home even as schools reopened were, indeed, keeping their kids home. And thirdly, extended jobless benefits allowed job-seekers to be pickier about the job offers they might have gotten.
In other words, it’s safe to say transitory issues made the April numbers look tottering.
So, what are we left to face? What will the jobs market look like moving forward? Well, remember how competitive things got when you were trying to find and retain talent before COVID-19? That’s pretty much what economists are predicting as hiring picks up this summer and beyond.
As employee benefits advisors, our best advice to employers is to recalibrate sooner rather than later and do all they can to prepare for an extended labor shortage.
That will include making sure your benefits offerings can meet the needs of a modern, evolving workforce. Everyday medical, dental and vision coverage won’t be enough to attract and retain top talent.
Benefits of the Future
A more personalized, family-friendly healthcare benefits package is what’s in order, especially given that younger workers, particularly Millennials, now make up the largest generation in the workforce.
So, what exactly does that look like?
Unlimited PTO, ping-pong tables, and even beer taps are old hat, if not passé. The more innovative offerings can be found at some of our biggest corporations. For example, IKEA offers four months of paid parental leave, Goldman Sachs covers gender-reassignment surgery, and Scripps Health offers pet health insurance for cats and dogs.
Not every employer can afford some of these more extraordinary benefits, but if the pandemic taught us anything, it was that employers who offer flexible hours and remote work options have a competitive edge.
Along those lines, programs that cover the costs for treatments like in-vitro fertilization (IVF) and egg freezing or harvesting are increasingly popular.
According to a survey by the International Foundation of Employee Benefit Plans, nearly one-third (31%) of employers with 500 or more employees offer some sort of fertility benefit — up from 24% in 2016. Even among smaller employers – those with 50 or fewer employees – 10% offer some sort of fertility benefits, up from 4% in 2016.
Just as importantly, plans that offer lower prescription drug costs will help you attract and retain employees, especially if it’s a plan that includes more than the bare-bones list of medications and comes with a copay that isn’t too high. The best drug plans can come with no deductibles, require no pre-authorizations or tiers.
With growing families, child care benefits also will be important, especially as the average annual cost of full-time center-based child care can be as or more expensive than in-state college tuition. That’s why more employers are starting to provide on-site or near-site childcare and, when that’s impractical, childcare subsidies.
Student loan repayment assistance is another benefit sure to help you compete for the best employees.
Today’s workforce faces a suffocating $1.6 trillion in student loan debt. In response, the number of companies offering student loan repayment assistance jumped from just 3 percent in 2015 to 8 percent in 2019. That figure may have dropped in 2020 but is sure to rebound quickly.
Mental health benefits also are increasingly important. Roughly 1 in 4 employees have been diagnosed with depression and 40 percent of them take an average of 10 days off from work each year because of their mental illness, according to the American Psychiatric Association.
It’s important to have mental health benefits that are easy for employees to access and understand. Employee assistance program that provide counseling services, either in person or by phone, as well as informational services to help with big changes like moving or having a baby are now increasingly the norm.
If you’re a business owner, the expense of benefits is always a question. If you’re revamping your benefits offerings with the recovery ahead in mind, just consider this:
Competitive salaries will always be important but, according to a Glassdoor Employment Confidence Survey, 80% of employees would choose additional benefits over a pay raise.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the nation. Contact us at email@example.com or 480-730-4920.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.