A growing number of small and mid-sized businesses (SMBs) are responding to worker demands for better pay and benefits, as changes in the job market continue.
In an effort to win the war for talent as the Great Resignation continues, employers are taking action, with 18.5% of survey respondents saying they are focused on enhancing benefit changes, up more than 5% from the third quarter of 2021.
The findings come from the fourth quarter 2021 CBIZ Main Street Index, which was conducted between Nov. 30 and Dec. 31, 2021, and includes responses from nearly 2,000 businesses with fewer than 100 employees in 27 industries across the U.S.
In addition to boosting benefit packages to recruit top talent, the survey also found that 27% of SMBs say incorporating new compensation methods is also a priority, up nearly 6% from the third quarter.
Meanwhile, 9 of 10 SMBs report that they are struggling to hire workers, inflation remains a top-of-mind issue, and the rising cost of goods and services is affecting the bottom line of many companies. In fact, 51% of responding businesses report they are short-staffed by more than 10%. Not surprisingly, this is putting stress on several industries, most notably food and hospitality.
On a positive note, CBIZ notes that concerns over loss of revenue have decreased—down from 35.3% in the third quarter of 2021 to 29.7% in the fourth. What’s more, while overall business confidence levels remained almost unchanged from the third quarter to the fourth, the findings show that respondents indicating “very positive” business confidence increased more than 6% in the fourth quarter.
“We are seeing employers implement both offensive and defensive strategies to combat the ‘Great Resignation,’” says Ed Rataj, Managing Director of Compensation Consulting at CBIZ. Rataj notes, for example, that many are making generous offers in an effort to attract exceptional talent. Others are offering stay bonuses that pay employees for simply remaining with the organization, typically for six months or a year. “Ensuring that your pay is market competitive is more important than ever. Falling behind the market during the Great Resignation could be disastrous,” he adds.
Additional Benefits
Many employers are also realizing they must go above and beyond their typical benefits offerings, with many deciding to offer additional, unique optional benefits, such as pet insurance and identity theft coverage, according to CBIZ.
Additionally, instead of passing health care cost increases along to employees, some businesses have chosen to shoulder the increased costs themselves without reducing benefits. Many employers are also starting to add dental and vision coverage. Moreover, progressive employers are actively looking for ways to lower employee deductibles and out-of-pocket costs, the firm notes.
To address the pandemic’s impact on employee mental health and wellbeing, many employers are trying to solve this problem by enhancing their Employee Assistance Programs (EAPs) through which employees can access confidential assessments, free counseling, follow-up services and more.
“Employees and job seekers are benefiting from a robust economic recovery, dating back to the early months of the pandemic,” adds Phil Noftsinger, Executive Vice President at CBIZ. “Low unemployment and a greater appreciation for work-life balance are forcing the hands of these companies to respond to workers’ demands.”
