MEADOWS, Ill., Aug. 2, 2023
/PRNewswire/ -- More than half of employers (51%) experienced a
turnover rate of at least 15% in 2022, up three points from 48% in
2021. Therefore, employee retention became the number one priority
for both operations (51%) and HR (66%) this year, according to
Gallagher's 2023 U.S. Organizational Wellbeing Report. The
Gallagher report examines how employers are adjusting compensation
and benefits to improve retention rates.
"An organization's ability to retain employees ultimately
impacts its bottom line because hiring and training a new employee
usually costs much more than retaining someone who is already on
the payroll," said William F.
Ziebell, CEO of Gallagher's Benefits & HR Consulting
Division. "The workforce makeup and employee needs are evolving at
a rapid rate. As a result, employers have to consider more
comprehensive benefits and compensation offerings that can enhance
the overall employee experience."
The Gallagher study, which draws data and insights from more
than 4,000 organizations across the U.S., identifies current and
emerging trends with the goal of helping employers optimize the
wellbeing of their organization as a whole through organizational
strategy; diversity, equity and inclusion (DEI); HR technology; and
healthcare cost control.
Total rewards reign supreme as employers prepare for
In 2023, the employee experience is in the spotlight, with
employers betting big on total rewards. To do so, more
than three in four employers (78%) enhanced existing employees'
base salaries and another 40% enhanced variable compensation. Even
further, 39% of employers invested in expanded medical benefits and
38% upgraded their wellbeing initiatives — both up six points from
Despite the overwhelming focus on improving retention efforts,
most employers anticipate growth in both revenue and headcount by
2024. Nearly two in three employers (63%) project a revenue
increase and more than half (57%) predict a rise in headcount.
Increased healthcare premiums prompt cost transparency and
While many employers expanded medical benefits in 2023, more
than half (53%) also increased cost sharing. This is likely because
nearly four in five employers anticipate a moderate (68%) or
significant (10%) rise in healthcare costs. These factors, which
have rippled through the carrier base, are starting to affect
employer-sponsored healthcare, showing up as increased health plan
premiums. The median at the most recent renewal was 5%–5.9%, up
from 4%–4.9% last year.
Employers are looking to telemedicine, healthcare decision
support and cost-transparency tools to help offset these growing
expenses for their people. For example, telemedicine saw
significant growth among cost-management options, up five points to
63% when compared to 2022. There was also an increase in the number
of employers that supply their employees with cost-transparency
tools (30%, up six points) and provide healthcare decision support
(29%, up two points).
Employers shift accountability for DEI oversight to
While most DEI initiatives are managed by HR, leaders sometimes
share the responsibility since they set the tone and vision for
policies and practices in the organization. In fact, more than two
in five employers (41%) include DEI oversight as a leadership
accountability measure. When leaders' behaviors and communication
styles show that diversity, empathy and resilience are top
priorities, they invite organizational transformation and advance
goals for attraction and retention.
Demonstrating integrity through genuine, consistent and
sustained communications around DEI initiatives can positively
impact culture change and create the environment for an optimal
employee experience. Employee communications more often include
content about DEI (54%) than talent analytics and engagement (37%).
Key elements of talent management and total rewards also
incorporate DEI, including succession planning (30%), benefits
(29%), compensation (28%) and performance management (22%).
"Now more than ever, it's important for organizations to ensure
their benefits and overall vision are well matched with the
interests of employees," said Ziebell. "While diverse benefits may
come with more complexity, providing a people-first framework helps
to address differing employee needs and interests."
ABOUT ORGANIZATIONAL WELLBEING REPORT
U.S. Organizational Wellbeing Report is the first installment
of the Workforce Trends Report Series, covering organizational
strategy, DEI, HR technology, and healthcare costs and controls. It
presents recent findings on current and emerging trends to help
employers optimize their investments in the wellbeing of their
organization as a whole. Each of the other reports centers on a
specific aspect of employee wellbeing, including physical,
emotional, career and financial. Data and insights highlighted in
this report are compiled from Gallagher's 2023 Benefits Strategy
& Benchmarking Survey. Conducted from December 2022 to March
2023, a total of 4,030 organizations across the U.S.
participated. Findings are broken out by region, organization size
and ownership structure for peer comparison. The report can be
Gallagher & Co. (NYSE:AJG), a global insurance
brokerage, risk management and consulting services firm, is
headquartered in Rolling Meadows,
Illinois. Gallagher provides these services in approximately
130 countries around the world through its owned operations and a
network of correspondent brokers and consultants.
Mary Schwartz, Gallagher
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