Is your organization maximizing employee benefits to combat the challenges of a diminished workforce?
A recent Price Waterhouse Cooper (PwC)[i] study revealed that 65% of employees in the US say they are looking for a new job. And the Job Openings and Labor Turnover Summary published by the U.S. Bureau of Labor Statistics puts the employment/labor situation into even more alarming terms, showing that as of the last business day of July 2021, the U.S. non-farm job market has increased to 10.9 million open positions.
Although the surge in COVID cases, linked to the return to schools and the increase in COVID variants, has recently slowed job creation, the gap to fill existing openings continues to grow. Competing for skilled, talented, and mission critical workers is always challenging. In today’s atypical work world, it can be a Human Resources hiring and retention nightmare.
Challenges in Virtually Every Industry Sector
While it is not surprising that healthcare and social assistance jobs saw the largest month-over-month increase in job openings at nearly 300,000 (July 2021), what may surprise you is that finance and insurance saw the second-highest level of job openings with a month-over-month increase of +116,000. In fact, the number of job openings in the financial and insurance sectors even exceeds the much-publicized workforce deficits in food service. (See: Job Openings and Labor Turnover Summary)
Employee Benefits are a Key Component of Total Compensation
In an article on CFO Dive, (Most CFOs face high turnover rate, labor shortages), authors Jim Tyson and Jane Thier write, “A recent Salary.com survey found that 62% of organizations plan to increase base salaries in the next six months to attract both hourly and salaried employees.”
Increasing wages, however, appears to be only part of the solution. The post-pandemic American workforce seems to be looking for more from employers. Workers want to see that their employer stands with them through life’s challenges. They want to feel that employer and employee are partnering together to keep the business thriving by first supporting the needs of its workforce.
Some companies are now offering a diversity of new or expanded benefits including pet insurance, discounted legal services, and other enticements above and beyond health insurance plans. But, for many highly compensated employees (HCEs) the most valued benefits involve strategies to defer more pretax earnings to retirement savings. For organizations, as retirement savings plan sponsors, this can take the form of nonqualified deferred compensation (NQDC) plans, backed up by employee education.
Employees at all income levels are more focused, creative, and productive when they are free from the distraction of personal financial concerns. For companies, the first step appears to be partnering with employees by offering meaningful benefit packages and retirements saving plans and then supporting employees with the education they need to fully maximize those offerings.
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