Employer Healthcare Benefits and the ‘Great Resignation’
According to the U.S. Department of Labor, 11.5 million workers quit their jobs between April and June of this year, and that trend isn’t likely to end soon. A Microsoft survey found that 41 percent of people are considering making a similar move.
This mass exodus, referred to by many as the “Great Resignation,” came as a result of the pandemic. In fact, 74 percent of those surveyed by LinkedIn cited the pandemic as their reason for moving on. During the shutdown, people had a chance to really contemplate their current work situations. Stress and burnout were also contributing factors, but many workers appeared most concerned with their employer’s response to the coronavirus and the financial risks and ramifications (e.g., frozen merit increases, holds on promotions, potential layoffs).
None of this should be a surprise. Even under “normal” circumstances, people leave their employers for many of the same reasons. Burnout is the number one contributing factor, followed by lack of opportunities and low pay. People have also come to enjoy the flexibility of remote work. Returning to the office and working a set schedule is far less appealing, as evidenced by the prediction that freelancers could make up more than 50 percent of the workforce by 2027.
Employer healthcare benefits: a potential solution for the Great Resignation
Some industries have been harder hit by the Great Resignation than others. Leisure and hospitality are still struggling with attracting and retaining talented employees, losing more than 740,000 people in April alone. In the retail sector, nearly 650,000 people quit that same month. Nursing saw an 18.7 percent turnover rate in 2020.
Many businesses have responded by raising wages and offering hiring bonuses of up to $1,000, but financial incentives haven’t been enough. A Korn Ferry survey found that 94 percent of retailers can’t find talent to fill empty roles. Part of this could be due to the prospect of long hours spent in positions that involve interacting with the public, which still feels daunting and dangerous for many; the coronavirus still poses a severe threat to people’s health.
Another part of the equation is insufficient employer healthcare benefits packages. According to the 2019 Kaiser Family Foundation Health Benefits Survey, just 50 percent of small businesses (fewer than 200 employees) offer health coverage to employees. And with more than 40 percent of the private workforce employed by such establishments, that’s a lot of people personally insured, underinsured, or uninsured. The Great Resignation is compounding the issue. More than 60 percent of the workforce receives health benefits through their employers. When someone leaves without another job, they lose their employer-sponsored health insurance and aren’t eligible for unemployment insurance, creating a gap in health insurance coverage between jobs.
The key to attracting and retaining talented employees could be as simple as offering employer healthcare benefits. It can be a huge differentiator by increasing job satisfaction, employee loyalty, and productivity.
Employer-sponsored health insurance options
Despite the benefits, finding room in the budget for employer-sponsored health insurance can be difficult for many small businesses. While deductibles and premiums may be on the rise, it is still worth the effort to explore your options. Many retail and services workers are now taking entry-level positions in offices and warehouses with lower wages because of the benefits, career development, and upward mobility they offer.
Here’s what to consider when building your employer healthcare benefits plan.
1. Supplement a high-deductible health plan with virtual primary care.
A complimentary virtual primary care plan can be a good supplement for businesses that cannot afford full employer-sponsored health insurance. Virtual care plans can reduce out-of-pocket costs associated with deductibles, copays, and prescriptions.
2. Include a health savings account with high-deductible plans.
Health savings accounts provide many advantages for employees. The funds are available to pay for medical expenses, which puts the individual in control of when and how to use the money. Want to pay a deductible? Go ahead. Need to refill a prescription? Feel free. But the contributions come out before taxes, lowering taxable income. Many plans also earn tax-free interest, and any unused funds can be rolled over for the next year.
3. Base premiums and deductibles on employee income.
Basing premiums and deductibles on employee income doesn’t always work for smaller businesses, as the difference in wages isn’t usually extreme. For midsize and larger employers, however, it can be a helpful tool in attracting and retaining talented employees. Perhaps pay 80 percent of premiums for workers making less than $60,000 a year while also offering lower annual deductibles.
4. Offer an independent virtual primary care plan when insurance isn’t an option.
Telehealth plans can help employees access the care they need. Look for comprehensive solutions like virtual primary care, which allow employees to see the same primary care physician regularly and manage chronic conditions with ongoing treatment plans. These plans also provide access to annual virtual wellness exams—including routine labs—as well as virtual urgent care and behavioral therapy.
The reasons people seek other employment opportunities will vary, even after the pandemic. Finding ways to address the most common causes of talent loss should help, but it’s also important to provide people with the perks and benefits they seek—one of which will always be employer-sponsored health insurance.