Gallagher shares people strategy

Michigan area president discusses talent, employee experience considerations from benchmarking report.
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Gallagher’s recently released People & Organizational Wellbeing Strategy report shared data from 4,000 U.S. employers on the most challenging issues facing employers this year.

Topics examined in the report include recruiting, engaging and retaining top talent and delivering a well-rounded employee experience, including flexibility and well-being initiatives. A total of 3,996 organizations across the U.S. participated in the survey the report is based on between December 2020 and March 2021.

“As the economy and labor market begin to rebound, the major changes to the way business was done in 2020 are defining the way forward in 2021,” Gallagher wrote in the introduction to the report. “This period of great disruption has sparked a future of greater innovation that will indelibly remake organizational structures, workplace policies and total rewards.”

Talent attraction and retention strategies that took center stage during the pandemic include flexible workplace policies and practices — an offering that isn’t going anywhere — and a focus on emotional well-being in a time when mental health issues emerged as a top concern during the days of isolation.

To help employers make solid decisions for the health and well-being of their employees and organization, Gallagher is publishing a Workforce Trends Report Series using data from various surveys it conducted. The People & Organizational Wellbeing Strategy report is the first in the series and is based on an analysis of its 2021 Benefits Strategy & Benchmarking Survey results. It focuses on people and organizational strategy, total rewards and health care cost considerations.

Findings are broken out by region, organization size and ownership structure for peer comparison. Each section features core data highlights, contains tables with detailed results and wraps up with overall conclusions. The full report can be viewed at bit.ly/wftrendswellbeing.

Key takeaways for Michigan from this report included:

  • The pressure to endure long-term unpredictability and manage not-so-new everyday stresses increased burnout and decreased emotional well-being among employees. 71% of Michigan employers offer flexible work arrangements as a component of their social and emotional well-being initiatives, compared to 56% nationally.
  • 95% of employers use an employee assistance program (EAP) to offer support for employees’ emotional well-being. But far too many take a “set-it-and-forget-it” approach, meaning the full value of these programs is rarely seen.
  • Employers continue to prioritize talent. Regardless of size, 60% of employers consider attracting and retaining a competitive workforce their top operational and priority for 2021; 80% consider it their top human resources priority.
  • Signs of economic recovery are promoting optimistic forecasts for revenue and headcount increases. About 82% of organizations expect increased or stable revenue growth through 2021, with headcounts expected to rise for 50% of organizations.
  • Most employers (72%) are expecting moderate health care cost increases this year. Part of the reason for slower-than-expected cost increases is that the pandemic normalized telemedicine. It’s now one of the fastest-growing measures employers are using to keep a lid on health care costs, with 84% of employers having already implemented telemedicine. By 2023, it is expected 80% of employers will have adopted this practice.

Lenny Brucato, who is the Michigan area president for Gallagher’s Benefits and HR Consulting Division, spoke to the Business Journal last month about the report.

“The role that your total value proposition in compensation and benefits played in talent attraction and retention was always a focal point. It was always something that employers felt was important, but I think it’s put even more of a spotlight on it because of the market that we’re in and the opportunities that are out there for employees to make a change or pursue other opportunities,” he said.

“Employers are more than ever focusing on what is our compensation and benefits strategy, and how is that tied into our overall employee attraction and retention value proposition. … (With) wanting to be that destination employer and wanting to deliver a best-in-class benefit program, certainly cost will always be a factor in determining what can and can’t be done, but (it’s about) making sure that they’re leveraging the resources that they do have to deliver the best available program to reward, attract and retain the talent that they need to run and grow their businesses.”

Employee engagement

Gallagher noted in the report the transition to virtual workplaces is creating broader access to nonlocal talent pools, and fading geographic boundaries mean new opportunities for engaging clients and increasing revenues.

“But then how do you bring that employee into the fold as part of your culture?” Brucato asked. “How do you redefine what your culture is, managing a workforce that’s so spread out within an organization that may have never had to deal with that before? And then there are challenges of onboarding people in that truly virtual environment and creating the appropriate level of engagement with those employees.”

Brucato said management should seriously consider how to create a unified culture and a level playing field between its in-person and remote workers, and this is no easy task.

Health care

A hiatus in the growth of health care costs has required fewer adjustments to benefits strategy, design and selection for 2021, Gallagher said in the report. If costs go up as expected when the utilization of provider services normalizes due to the return of in-person well visits, many employers are ready keep them in check.

The past three years have been marked by increases in telemedicine adoption, as well as higher employee contributions to health plan premium costs and greater use of cost-transparency tools, claims audits, and a surcharge or exclusion for spouses with access to other coverage, the Gallagher report said. Brucato said the pandemic accelerated the former trend in a way no one could have predicted.

“It’s really eye-opening how much, or what a role telemedicine has now begun to play, not just in traditional care that it was used for before, but for behavioral health services. And that actually, in some of the reports that we’ve seen, (has been) the lion’s share of what employees are using telemedicine for,” Brucato said.

Brucato

Because of the ease of use, privacy and time-saving nature of telemed visits for behavioral health, Brucato said he believes this trend will only grow.

By 2023, more than 20% of employers plan to fortify their cost-management efforts and outcomes through plan design changes and the addition of well-being incentives, cost-transparency tools and health care decision support, Gallagher said. What this means practically, Brucato said, is that employees, being incentivized by the promise of lower costs, will be more likely to pursue preventive care that will keep problems from becoming more serious and costlier down the line.

The pandemic has increased burnout and decreased emotional well-being among employees, Gallagher said. With remote work now common for many businesses, managers who schedule check-ins and maintain regular contact with their team members will be more attuned to the need for additional support, and it will be in their best interest to keep everyone aware of resources like EAPs (avoiding a set-it-and-forget-it mentality), mental health self-assessment tools, coaching and counseling programs, and other available options.

Flexibility, compensation

Decades before the pandemic, advances in communication technology not only laid the groundwork for the shift to remote work but also made it inevitable, Gallagher wrote in the report. Brucato said the pandemic only accelerated the trend, and it’s not going anywhere anytime soon.

Evaluating the needs of employee groups will be important in helping employers more effectively identify and develop supportive workplace policies that discourage turnover. Caregiver burdens and high attrition among female employees with school-age children are two high-priority retention risks that need to be addressed in any remote work policy, Gallagher said, noting diversity will continue to set the course for organizational success, making it critical to address the stressors underlying an exodus of women from the workforce through policies such as paid and unpaid leave, job sharing and reduced hours.

Sustainably keeping a competitive workforce during an unparalleled rise in labor market mobility will require a firm foundation for pay equity and employee performance, Gallagher wrote. Policy adjustments, targeted training and individualized support resources also will be needed to help people adapt to a flexible environment.

More strategies for resilience, retaining and attracting new talent, and managing constant change are detailed in the report.

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