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How do Best-In-Class Midsize Employers Manage Benefits and HR?


No matter their size, employers are always seeking ways to improve their workplace for current and future employees.

Understanding what works and what doesn’t can go a long way to building winning HR, employee benefits, and talent management strategies. But often small and midsize employers can face additional obstacles in this journey for a wide-variety of reasons.

But what can business leaders at these companies do to best manage HR practices and benefits? A recent survey from Gallagher, which focused only on midsize employers, provided insights into what best-in-class organizations are doing when it comes to benefits and HR management.

Let’s take a closer look at the data!


An area of HR management that many employers, including large organizations, struggle with is containing healthcare costs. Of the 1,307 midsize employers who participated in the survey, just 30% comprised the “best-in-class” percentile established by the Gallagher criteria.

The following three factors resulted in employers making it into the best-in-class rankings:

  • Low premium increases of 4.9% or less over a 3-year renewal period
  • Prioritizing health benefits costs management
  • Confidence in the effectiveness of health benefit cost management strategy

The report also provided the methods used by both best-in-class organizations and other employers to manage spend. Here are how a few compare:

  • Offer 1-2 medical plans: best-in-class 72%; others 64%
  • Self-insure benefits funding: best-in-class 55%; others 40%
  • Use a specialty PBM: best-in-class 29%; others 20%

One thing that best-in-class midsize employers are doing is managing healthcare costs without shifting them to employees. This helps employers offer high-quality benefit plans that attract and retain talent in today’s competitive market. 

For example, 47% of best-in-class employers didn’t increase cost sharing in 2018, compared to just 37% of other employers.


We have written before about the increasing importance of wellness programs to both employees and employers. The Gallagher survey showed that best-in-class midsize companies are investing in wellbeing strategies to help manage the costs of benefits.

For example, 76% of best-in-class employers say that “promoting and improving employee health and wellbeing is a top priority for my organization” compared to 65% of other businesses.

31% of best-in-class employers say they lack a wellbeing strategy, while 37% of other organizations say the same.

Additionally, 33% of best-in-class businesses say they view enhancing the employee experience and satisfaction as the top two reasons to invest in a wellbeing program (27% for other midsize employers).

Next, the survey revealed some of the resources and elements that are included in physical wellness programs today, along with the percentage of best-in-class and other organizations that are using them:

  • Flu shots: best-in-class 60%; others 53%
  • Health risk assessments: best-in-class 43%; others 31%
  • Biometric screenings: best-in-class 43%; others 32%
  • Tobacco cessation: best-in-class 42%; others 33%
  • Physical activity programs: best-in-class 40%; others 31%

The results also show examples of emotional and career wellbeing strategies:

  • Company-sponsored gatherings: best-in-class 54%; others 45%
  • Wellness committee: best-in-class 38%; others 28%
  • Community engagement opportunities: best-in-class 33%; others 27%


The next section of the survey shifts from healthcare to HR management practices and strategies. This time, just 24% of companies surveyed fell in the “best-in-class” percentile.

Of the criteria used, two were weighed most heavily: turnover percentage and achievement of targeted turnover rate. Others that were used include:

  • Having a communication strategy
  • Success of employee communications
  • Implementing a strategy to improve the employee experience
  • Completing a workforce engagement survey from 2016 to 2018
  • Using an HR and benefits technology strategy, and its level of sophistication

The survey then details how HR management impacts wellbeing efforts and strategies, as well as some of the most popular elements.

Here are a few comparisons between best-in-class and other organizations when it comes to emotion wellbeing:

  • Having an Employee Assistance Program (EAP): best-in-class 58%; others 49%
  • Paternity leave: best-in-class 41%; others 34%
  • Life event celebrations: best-in-class 38%; others 30%
  • Classes to promote emotional wellbeing: best-in-class 30%; others 18%
  • Volunteer opportunities: best-in-class 43%; others 32%

Another important area of wellness that has gained attention and grown in demand is financial wellbeing. The Gallagher report broke down some of the top financial wellbeing programs, and how they compare between employers:

  • Financial advisor sessions: best-in-class 42%; others 29%
  • Employee discount programs: best-in-class 34%; others 27%
  • Financial literacy and education opportunities: best-in-class 33%; others 21%

These are just some examples employers, including small businesses, can explore.


It’s a constant struggle for small and midsize businesses (SMBs) when looking to balance their HR-related costs with trying to remain competitive for talent. And while many of these employers can feel overwhelmed, exploring HR partnerships can help manage costs while improving administration and practices.

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