U.S. employers have largely maintained the status quo in terms of their benefit offerings in 2019, but they are also looking for opportunities to make changes to their benefit programs that lower costs while still enabling them to attract and retain talent in a competitive labor market, according to the findings of a survey published by professional services provider PwC in June 2019.
The “Health and Well-being Touchstone Survey,” which was completed in spring 2019, asked U.S. employers and employees for their views on the current and projected status of their rewards programs. The results indicated that employers expect medical costs to increase 6.5%, or 4.2% after plan changes, from 2018 to 2019. According to researchers, this trend is consistent with the actual increase of 6.2% from 2017 to 2018.
The survey also showed that employers are still seeking to reduce their long-term retirement benefit liabilities, with the shift away from defined benefit plans and toward defined contribution plans continuing. Specifically, the survey found that just 20% of employers offer a defined benefit plan; and that of those, 37% have frozen entry to these plans for new participants, up from 29% in 2018.
While 82% of the employers surveyed said they believe their current plans and practices provide the framework necessary for retirement readiness, less than half indicated that they think that their employees will be ready to retire when they want to. The findings also revealed that the prevalence of retiree medical benefits is continuing to decline, with less than one-third of employers reporting that they provide any kind of stipend, subsidy, or coverage for retiree health costs.
The survey results further suggested that employers are increasingly recognizing the importance of managing employee stress, burnout, and other mental health issues, with the share of employers saying they offer stress management programs rising sharply from 40% in 2018 to 61% in 2019. Researchers pointed out, however, that many of these employers are not incorporating their stress management programs into their overall wellness and well-being programs.
Moreover, the survey asked both employers and employees what they consider to be the most important benefit offerings or employer attributes that would attract and retain employees. A comparison of the responses showed that there is a disconnect between the views of employers and employees. For example, 86% of employees, but just 49% of employers, said they think flexibility and work/life balance options are likely to attract talent; while 74% of employees, but only 18% of employers, said they believe inclusion and diversity are important.
The survey also examined the flexibility, time off, and work/life balance benefits offered by employers. The surveyed employers reported offering full-time employees an average of 10.8 annual holidays, 9.1 paid sick leave days, and 12 paid vacation days. Around 60% of employers said they provide parental leave, with maternity leave being slightly more common than paternity leave. The work/life benefits offered most frequently by employers were found to include mothers’ rooms (89%), walking or stand-up desks (80%), free parking (78%), and on-site gym and/or fitness classes (59%).