HR Florida


Florida State Council Affiliate of SHRM

A Changing Landscape of Workers Deepens Benefits Challenges

By Scott Millson

Employees who believe that management is concerned about them as a whole person – not just an employee – are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.”

Over the last two years, it has never been more important to put these words by former Xerox Corp. Chief Executive Anne M. Mulcahy to practice. But it’s never been more challenging for hard-pressed human resource leaders to do so in the wake of accumulated disruptions brought on by the COVID pandemic and its hard-fought recovery.

Even in Florida, with an overall benign climate for weather, taxes, and opportunity, employers still grapple with unfilled jobs and the quest to find the secret sauce for successful recruitment and retention. Just as problematic are the never-ending hikes in benefits-related costs, which are leading many organizations to rethink their health plan models.

HR managers will continue to have their work cut out for them as they adjust to a landscape that has gone through unprecedented change in the last two years. Here are the trends promising to influence employee benefits in the new year.

Not your father’s workforce

Today’s workforce is vastly changed since the pandemic, forcing HR departments to scramble and, in many cases, upend time-honored policies and procedures to find, and most importantly, keep talent. It can be difficult to reconcile the company line to employees’ newly expressed posture on what they will or won’t tolerate to offset burnout.

Unemployment numbers remain relatively low, but despite the pressures of inflation and a threatened recession, the U.S. continues to see a high number of unfilled jobs. The quit rate has been 35% higher than the national long-term average. Florida has experienced the same trends. As of June 2022, the national quit rate reached 3.0%; 338,000 Florida employees left their jobs.

The practice of “quiet quitting” is one that has taken hold – cancelling out going above and beyond as workers prioritize their mental health over their work demands. One 25-year-old tech firm worker told the New York Times, “Passive aggressively withdrawing…doesn’t win for everyone…It isn’t always about you. You’re on a team…”

But she also held strong to the idea of responsibly communicating healthy boundaries. As she put it: “I’m all about balance. As long as our work is being done, and we don’t need each other, we can do whatever.”

Benefits need to respond to individual needs

Finding a way to win at recruitment and retention will continue to be a high priority this year. The need is pressing as half the workforce is disengaged, costing employers 34% of what employees earn each year. Cookie-cutter benefits and policies are not the solution. More employers will be putting more thought into their total rewards to set their recruiting and retention apart from the competition.

It’s all about creating and delivering an optimal employee experience. That takes developing a deeper understanding of employees, where they are at in their work and personal lives, and what matters most to them.

Analytics – tools like workforce personal analysis – are important to digging into the nuances and then responding effectively. Take health benefits—younger workers in their early to mid-20s place less emphasis on them than older workers with children or those who are nearing retirement. It’s no surprise since they are younger, healthier, and often still on their parents’ plans.

Other factors shape the employee experience, though, besides benefits. Flexibility is big, especially since remote work has proven successful. By 2025, 22% of the workforce will work remotely; 63% of high-growth companies have enabled “productivity anywhere” hybrid work models.

Voluntary benefits add luster, too

Voluntary benefits are increasingly important as a way to meet the personalization imperative. A wealth of options can be included in benefits packages that attract differing employee groups. They can make the difference in winning in-demand job candidates.

Financial wellness, for example, is important to overall employee wellness, and solutions range from student loan management and forgiveness programs to one-on-one financial management counseling.

“It’s the best thing ever,” one young employee told SHRM of the student loan repayment benefit that enticed him to his new job after graduation from college. It has allowed him to shrink his $50,000 in loan payments, and was also life-changing: He and his fiancée are now exploring the possibility of buying a home.

Options for voluntary benefits are growing, and they don’t have to break anyone’s bank to offer. There’s a small price to pay for the loyalty they can help engender.

Paying the piper

Rising benefits costs do concern employers. Healthcare costs are heading up by 6.5%, accompanied by an expected 10% rise in pharmaceuticals. It’s pushing the cost per employee to over $13,800 – and the environment discourages the common past practice of shifting more of those increases over to employees.

Instead, employers looking at the bigger benefits cost picture, and making changes in their models that will create bigger and more sustainable long-term rewards. For example, zero deductible health plans are trending, even with their higher premiums. Mid-sized and smaller employers are following the lead of large employers, 40% of whom plan to offer a low- or no-deductible plan in 2023. Another 11% have such plans under consideration.

Also surging is the trend to consider self-funded health insurance plans. By 2022, 58 percent of all small-firm employees and 61 percent of all large-firm employees were covered by their employer’s self-funded plan. These can save employers 10% to 20% on non-claims expenses, but the potential cost savings are only part of the story. They provide better visibility into plan performance, transparency over vendor compensation, and more control over risk.

The drive to self-funding has gone hand-in-hand with the continuing boom in captive insurance solutions. Captives are an increasingly viable alternative to traditional insurance. Employee benefit group captives are proliferating, allowing members in a common industry or geography to manage and share the risks of healthcare expenditures.

The past two years have been as tough on employers as it has for employees, and the pattern is likely to continue. By strengthening their approach to benefits, organizations  will also strengthen their employee relationships over time. That can’t be anything but good in uncertain times.

About the author

Scott Millson is the President, Employee Benefits for HUB Florida.  He is a leading expert in employee benefits, HR technology, and emerging employee engagement trends.  With over 30 years of experience in employee benefits and HR technology, Scott oversees the strategic planning, organizational design, resource investment and alignment for the HUB Florida EB team.