Report looks at tools in talent battle


As attracting and retaining talent remains the top priority of CEOs, a new survey shows Michigan employers are more aware of the importance of competitive benefits and compensation than the national average.

The fourth annual Arthur J. Gallagher Benefits Strategy and Benchmarking Survey polled 4,226 U.S. companies — 144 from Michigan and 28 from the Grand Rapids-Wyoming-Muskegon Combined Statistical Area — to assess how employers are using benefits and compensation to differentiate their organizations in the war for talent.

Gallagher designed the 300-question survey to help organizations discover their weak areas and set direction and strategy.

Nationally, it found executives’ top three operational priorities for 2017 were attracting and retaining a competitive workforce, growing revenue and sales, and maintaining and reducing operations costs.

Bryan Hirn, Michigan area president for Gallagher’s benefits and HR consulting division, said about half of the respondents nationally, 54 percent statewide and 71 percent in West Michigan felt compensation and benefits are important tools to attract and retain talent.

“One of the takeaways from this report is that if you’re in the C-suite trying to figure out how do we attract, motivate and retain people, you really need to take a look at benefits and compensation: traditional benefits, paid time off, communication, activity involvement and wellness. You need to make those decisions based on data, not on guesses,” he said.

The survey respondents include Gallagher clients as well as other employers across the U.S. In West Michigan, about half (13) of respondents were in the education sector, and the rest were manufacturing, public entity, business services, construction, technology, and restaurant and hospitality organizations.

Among West Michigan respondents, 8 percent reported their annual turnover rate was at 15 percent or more, while 70 percent reported turnover of less than 5 percent.

Statewide, 18 percent said they have turnover rates of 15 percent or more, and nationally, one-third of respondents said they have employee turnover of 15 percent or more.

The survey found most West Michigan respondents had not pinpointed why their employees are staying or leaving.

“What is interesting about West Michigan is more than half of the respondents have not done a survey to determine what their employees want to be engaged, stay motivated and stay with the employer,” Hirn said. “Two-thirds say they have a comprehensive strategy they plan to implement, but they’re assuming they know what will work.”

Some reasons for a successful retention rate might include effective employee engagement and well-being, Hirn said.

“In West Michigan, 33 percent of the respondents offer volunteer opportunities to people, and the same 33 percent offer community engagement opportunities,” Hirn said. Community engagement events might include 5K fundraisers, food drives or charity auctions.

“Seventeen percent offer social well-being initiatives,” such as company picnics, softball teams, and celebrating employees’ milestones, such as birthdays, marriages and the birth of children, he said.

Eighty-three percent of the West Michigan respondents said their companies use in-house wellness programs. Seventeen percent used their health plan vendor’s wellness policy options.

Noting a nationwide proliferation of tactics to control health costs, Hirn said 35 percent of West Michigan employers offer telemedicine, while 14 percent offer cost-transparency tools and other health care decision support for employees. One-third or more of employers nationwide use telemedicine, cost-transparency tools and health care decision support for employees.

The majority of Michigan employers (68 percent) said they use benchmarking information when planning benefits, and 67 percent use it in planning for compensation, whereas in West Michigan, 44 percent used benchmarking data in planning for benefits, and 56 percent used it in planning compensation. This compares to 59 percent of employers who use benchmarking for both benefits and compensation.

West Michigan employers reported a weakness in the area of employee training programs — especially for entry-level workers.

“Fifty-eight percent said they don’t think they offer enough training and development for employees,” Hirn said. “This gets to the presence of millennials, who place a high value on training, benefits and a career path.”

John Neumaier, Great Lakes regional president for Gallagher’s benefits and HR consulting division, said as employers nationwide continue to project revenue growth, the need for talent increases, making retention strategies continually relevant.

“Sixty-five percent of employers nationally expect an increase in revenue next year, and 51 percent are expecting significant headcount increases over the next two years,” he said.

“Overall well-being is developing plans to make sure employees’ work experience and satisfaction are motivators to stay with that employer. It goes to volunteering, compensation, benefits and making sure employers are communicating that in the appropriate manner.”

Seventy-nine percent of Michigan respondents said they are confident they are offering competitive benefits and compensation, which is higher than the national rate of 71 percent. In West Michigan, 68 percent of respondents said they are confident their benefits are competitive.

Neumaier said no matter how confident an employer is in the quality of its offerings, communication of those strategies factors heavily into employee satisfaction.

“It’s not only communication, it’s how you communicate,” he said. “It’s developing a yearlong communication strategy to make sure employees are engaged and understand what the employer is offering.”

He said nationally, 62 percent of respondents said a comprehensive communication strategy would be helpful in communicating the solutions HR provides, but only 15 percent said they have a comprehensive strategy.

“Seventy percent of employers do a couple communication programs but nothing comprehensive,” he said. “So there’s a real need to develop a comprehensive strategy.”

Benefits strategy and benchmarking survey highlights

Survey sample size:

4,226 U.S. companies, 144 from Michigan, 28 from West Michigan

Executives’ top three priorities for 2017:

Attracting and retaining a competitive workforce, growing revenue and sales, maintaining and reducing operations costs

Employers who think benefits/compensation are important differentiators:

West Michigan: 71 percent; Michigan: 54 percent; U.S.: 50 percent

Annual employee turnover rates of 15 percent or more:

West Michigan: 8 percent; Michigan: 18 percent; U.S.: 33 percent

Employers with volunteer/community engagement offerings:

West Michigan: 33 percent; U.S.: 27 percent*

Employers with social well-being strategies:

West Michigan: 17 percent; U.S.: 18 percent*

Employers that offer wellness program through health plan vendor:

West Michigan: 17 percent; U.S. 16 percent*

Employers that offer wellness program through outsourced vendor:

West Michigan, none; U.S., 14 percent*

Employers that offer in-house wellness plan:

West Michigan: 83 percent, U.S.: no data included*

Employers that offer telemedicine/other health care decision support:

West Michigan: 35 percent/14 percent; U.S.: 33 percent altogether*

Employers who use benchmarking data in planning benefits/compensation:

West Michigan: 44 percent/56 percent; Michigan: 68 percent/67 percent; U.S.: 59 percent combined

Respondents who are confident in benefits/compensation offerings:

West Michigan: 68 percent; Michigan: 79 percent; U.S.: 71 percent

*Michigan data not available

Source: Arthur J. Gallagher & Co.

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