With the COVID-19 pandemic affecting the global economy in many aspects, employers are now looking for ways to cut down costs in every possible way. Right from the healthcare costs, to other employee benefits and other expenses, employers are looking closely into the various tools, eligibility, and other policies.
Gallagher, insurance and risk management consulting services, surveyed almost 4000 employers in the US to understand their strategies to deal with the rising economic stress. While many were looking at payroll cut as their primary strategy, many others were reconsidering the employee benefits and perks as an effective cost-cutting method.
The Employee Benefits Strategy Survey Outcomes
Conducted with 3,921 US employers during December 2019 – May 2020, including the employee pulse surveys of April – July 2020, the outcomes of the Gallagher’s 2020 Benefits Strategy & Benchmarking Survey showed a range of strategies about how the companies are responding to the current economic stress.
One of the most common strategies was considering the payroll costs and freezing salaries.
Almost 43% of the respondents were considering salary freezes for their management and executives, and 42% for their non-management employees.
58% of employers took steps towards payroll cut by either – furloughing (29%) the employees, or by laying off (29%) at least a few of their employees.
Reconsidering Employee Benefits
The next common strategy was reviewing the current employee benefits package. While 79% of the employees were planning on offering the same healthcare and employee benefits even in 2021, they also agreed that they were uncertain about the complete impact of the pandemic on their economic situation. Some were focusing on the insurance premiums, remote working options, and other paid leave policies as effective cost-cutting solutions.
As the COVID-19 pandemic has raised concerns regarding employee health and wellness, 67% of the respondents were worried about the rising healthcare costs, and 41% about the specialty drugs. With lower revenues and higher operating costs affecting the company’s profit margins, employee cost-sharing for medical benefits may increase, including the implementation of high deductible health plans and higher premiums.
The other strategies to hold costs included claims audits, narrowing down the network of providers, re-checking eligibility, and seeking services from designated centers of excellence to avoid any third-party brokerages.
Changes in Workplace and Working Strategies
Even before the pandemic started, 69% of the employers were planning to invest in technology-based platforms. With remote working becoming a norm for many companies owing to the current situation, this idea of technology platforms could be of good use.
While 77% of the companies offered remote working options when the pandemic shutdown started, 42% offered flexible working hours. Despite businesses reopening amidst the COVID-19 scenario, 86% of the employers insist on continuing remote working and 59% for flexible working hours, for a long time.
Another technology-based option planned by many employers is- Telemedicine and digital health solutions.
With 59% of employers opting for the telemedicine option, it has become a proven healthcare cost control strategy. Also, the COVID-19 outbreak has increased the telehealth choices owing to the social distancing norms and shutdowns.
Another major concern for many companies was – Communication.
With most of the workforce operating remotely, employers were concerned about employee engagement and workplace culture. To overcome these issues, 63% of employers were regularly seeking employee feedback, and 45% were conducting frequent employee pulse surveys. The net outcomes and data analytics gave insights into various employee concerns and needs.
Another major, and probably, the most important concern for many employers was – Employee health and wellness.
Many employers were looking into implementing different employee engagement strategies that can improve employee health and wellness. Incorporating corporate wellness programs and using wellness platforms was considered as an effective employee engagement strategy by many employers. With the pandemic affecting the mental wellness of many people, employers are taking steps to help their employees achieve holistic wellness, thus, reducing the overall healthcare costs and boosting employee productivity.
As per the survey, employers are looking forward to offering specific employee benefits and rewards that contribute to their wellbeing, and also balance the workplace economy.
The primary employee benefits and rewards listed by the employers were –
- 65% – mental and emotional wellness
- 47% – leave policies
- 39% -Healthcare and Medical Benefits
Be it while working remotely, or at the workplace, employees are the core to run any business. And by offering them the right benefits while still considering the company’s economic resources is the key to building workplace wellness and growing the business.