A new survey finds that businesses are recovering steadily despite the lingering effects of the pandemic, but they also face a competitive labor market and are looking to employee benefits as a proactive response.
According to the latest Principal Financial Well-Being Index, smaller businesses report greater financial improvement (59%) than at this time last year (31%). Similarly, larger businesses report financial improvement (80%) compared with last year (63%). Moreover, smaller businesses’ hiring efforts have surged over the last 12 months, with 42% reporting that they are increasing staff, up from 19% a year ago.
At the same time, however, Principal’s survey shows a rise in resignations for smaller companies as employees seek retirement or new opportunities that fit their needs. According to the findings, 67% of employees are voluntarily leaving smaller businesses compared with 61% leaving larger companies.
“We’re seeing evidence of the labor dislocation, especially among smaller businesses,” notes Amy Friedrich, President of U.S. Insurance Solutions at Principal. “Employees are paying attention to the shift happening and believe they have more options than before. Retention will be more critical now as employers compete for employees.”
Aside from retirement, employees are citing additional childcare and caregiving responsibilities as a major obstacle and a top reason why they are leaving their current jobs. Additionally, employees are taking advantage of the current environment by changing career paths and relocating to different areas.
Employee Benefits
As such, employee benefits continue to play a critical role in recruitment and retention. According to Principal’s findings, training and education benefits jumped to the top of the list for employers that say they want benefits to help retain current employees or to improve the employee experience.
“This is recognition by businesses that upskilling current workers can help meet changing customer expectations while also demonstrating commitment to employees,” says Kara Hoogensen, Senior Vice President of Specialty Benefits at Principal. “By providing support for professional certification programs, or time to attend virtual or in-person conferences and events, employers are saying to their employees, ‘I value you and want to invest in you so you can provide even more value in the future,’” adds Hoogensen.
The latest results show that more than a third of employers plan to increase each of the top three most popular benefits in the survey:
- Health care (36%)
- Training and education (35%)
- Telehealth (34%)
In addition, child care support was identified as an additional key benefit for employee attraction—the first time it has made an appearance as a tool for employee attraction, the firm notes. Health care also remains a top benefit to attract new employees and was the second most popular for employee retention. Other popular employee benefits included telehealth, mental health and well-being programs, financial wellness programs, employee assistance programs (EAP) and paid family or medical leave.
“Employees are seeking jobs that fit their personal needs outside of the office,” observes Friedrich. “Matching employee needs with employee benefits is critical in the competition for talent and could help retain current employees.”
The findings in Principal’s latest Financial Well-Being Index are based on a survey conducted Oct. 1–12, 2021, among 500 employers from companies with two to 10,000 employees, spanning an array of industries.
