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Employers Turning to Benefits to Recruit and Retain Talent


The competition for talent is heating up in the United States and is expected to become even more challenging in the future.

One reason why employees are struggling to attract and recruit job seekers is due to their being more open jobs than individuals to fill them. This has led to job seekers gaining the upper hand in the recruiting process as they have more options available to them.

As a result, employers big and small have had to make significant changes to their recruiting and compensation strategies in order to lure top talent (while also retaining current high performers!).

A recent survey from Gallagher explored one area where employers are investing as recruiting picks up – employee benefits.


The 2018 Gallagher Benefits Strategy & Benchmarking Survey was conducted between January and April 2018. Over 4,200 organizations participated in the survey by answering more than 300 questions that were related to benefits and compensation.

Additionally, 40% of the companies who participated are considered to be small employers (under 100 full-time employees), which was the highest percentage. Lower midsize employers (100 – 499 full-time employees) was the second most at 37%.

The first notable finding from the report is that “attracting and retaining a competitive workforce” was listed as the number one operational priority (60%).

This correlates with another finding that 59% of employees expect a higher headcount by 2020, while only 6% predict a decline in this same period.

The report also found that employee turnover is a significant challenge for employers with 30% reporting that they had actual full-time employee (FTE) turnover of 15% or more.

Another interesting finding is that 74% of employers said cost management of their health benefits is a top priority, but only 44% said they have a strategy in place to do so. This further shows just how much employers are struggling with the rising costs of Healthcare in the United States.


We have written before about the importance of customizable benefits for organizations and employees today. The Gallagher report also detailed the importance of this growing trend and revealed how employers are addressing it:

  • Offering multiple medical plans – employers offering only one dropped 6%
  • Offering employer-sponsored dental plans and group life insurance – both rose by 5%
  • Adding tuition assistance to voluntary benefit plans – 46% (up from 42% last year)
  • Offering health savings accounts (HSAs) – 24% (up 2% from last year)

The survey results also highlighted the importance of routinely monitoring and changing voluntary offerings to keep them competitive and ensure they meet employee expectations.

Also revealed is that employers are putting a greater effort into employee education to help with engagement, culture, and empowerment.

42% of employers are increasing the importance workforce engagement and productivity, 40% are more focused on training, and 39% want to establish a strong culture. These percentages are all increases from last year.

Lastly, this part of the report found that employers believe that more effective communications (60%) is the number one solution to improving outreach, having stronger integrations, and ultimately reaching HR management success.


Despite the issues facing employers with health benefits, most want to improve healthcare offerings while containing employee-related costs.

The report found that in 2018, 45% of employers didn’t increase their employees’ share of healthcare costs.

Some ways that employers have tried to contain costs of healthcare include:

  • Adopting and offering telehealth programs – 55% currently offer and another 14% expect to have it by 2020
  • Giving employees healthcare cost-transparency tools – 46% offer and another 24% expect to add this by 2020
  • Offering disease management programs – 38% have currently and another 17% expect to add by 2020

The last point made in the report is that future trends to address recruiting and retention will revolve around creating stronger attachment to employers through wellbeing efforts.

It’s also mentioned that employers cannot remain stagnant with their benefits strategies, and they must constantly monitor offerings to ensure they keep up with worker demands. Failing to do so could cause employers to lose out on candidates during the recruiting process while also risking the chance of current employees leaving for better total compensation packages.


Reports like Gallagher’s continue to highlight the importance of employee benefits when it comes to recruiting and retention.

With most organizations expecting recruiting to become even more difficult in the coming years, benefits will likely only grow in value for both employers and job seekers.

This is something that all employers, especially small businesses, will need to keep in mind and address as they look to remain competitive for top talent (and prevent current employers from leaving).

How can outsourcing help small and medium-sized businesses overcome 10 common HR symptoms? Our eBook explains these HR challenges, and how partnering with a PEO can help overcome them!

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