A year ago, we introduced survey results from discussions with employers about the business impacts of key trends – employee engagement, retention, healthcare costs, compliance, technology and wellness.
Surprisingly, healthcare costs were not rated one or two by employers, engagement was rated number one and retention most commonly was rated number two. Over the past year we have seen a lot of changes in the business landscape, including employee engagement has been replaced by retention.
Retention was only a topic presented in the survey but selected as the trend impacting businesses the most. As the employer described how retention was impacting their business, the most common responses were:
- Finding good employees is difficult with unemployment rates so low so the objective is to keep the employees they have.
- It is critical to support the workforce with accessible and affordable solutions.
- Not all turnover is bad, measurement for keeping the right employees is just as important.
Retention has been impacting businesses for years but there are new trends making changes in the market as well.
Communication is newest trend
When looking at how employers rated the trends, we anticipated technology to be in the top half, especially with certain industries but found that wasn’t true. So, we wanted to try something and replace technology with communication to see what changed in the rankings. What we found was communication quickly became a key trend impacting employers and was rated in the top three most of the time.
As employers seek to retain top talent, they realized being able to communicate the value of the business in recruitment and strategies to realize ongoing engagement reduced turnover to achieve retention objectives.
Technology was one key method in how communication strategies were delivered and measured, which is somewhat ironic.
How do wellness strategies impact retention programs?
We are asked often, “what does ‘wellness’ mean?” Our response usually is, “what does it mean to you and your employees?” Wellness isn’t annual blood draws with mailed results and premium incentives. It may have been considered that in the past, but not when truly creating strategies to address retention. However, it may be part of the overall strategy.
Vendors that deliver simple-to-use wellness strategies have grown significantly as new technologies have come to market and employers demand more flexibility to customize solutions for their organization’s workforce and objectives. Top deliverables we see leading out wellness strategies that impact employee retention are consultants to deliver strategies and advise on modifications, technology that connects with wearables and workforce activities.
The ranking of healthcare costs may change in 2020
Price is the issue, not utilization. In the chart developed by the Health Care Cost Institute we see the results on the costs of care that have occurred during the period changed by healthcare reform. One view of this chart is that utilization of healthcare is becoming more efficient, but the price for the same services continues to grow. Those prices for care are resulting in increased premium trends due also by the mandate from medical loss ratios. In 2020 we see rate filing requests reflecting this with significantly higher premiums than the past four years.
Lower cost premium plans will likely merge closer to the plans that were higher cost in prior years. Which also means employers with community rated small group plans will be forced to raise the out of pocket exposure to employees and their families just to offset costs. Certainly, this adds to the importance of creativity in achieving the objectives of retention and the increased ability to communicate value with employees.
When discussing how healthcare costs are impacting businesses, employers are responding that these prices are limiting investment in the business, including programs related to retention. So, the organization can continue their business strategies, more employers than ever are taking on the risk of self-funding and some are taking additional steps with programs like reference-based pricing (RBP) to lower the health care cost curve. Although not for every employer, these two related programs are generating significant results on price while providing the flexibility to create programs that also support retention strategies.
Tyson Fuehrer is vice president at Biggs Insurance Services in Vancouver. He can be reached at tyson.fuehrer@biggsinsurance.com.
