Trend One: Employers must make meaningful efforts to retain employees
An aging workforce and labor shortage makes investing in benefits more important than ever.
While the “great resignation” of 2021 has subsided, employees still have substantial power in the workplace. Workplace demographics in the United States are shifting rapidly, which is changing the benefits landscape. In 2024, four million “baby boomers” are going to turn 65. As this large generation retires, there are fewer workers to replace them. The US is already facing a labor shortage, which will deepen over the next decade. Despite variations between industries, according to the US Chamber of Commerce, even if every currently unemployed person found work, the US would still have millions of job openings.
In addition, recruiting costs will continue to remain high. According to Zippia, it costs up to 40% of an employees’ base salary to hire a new employee with benefits. One job vacancy costs a company on average $98 a day and it takes 36 to 42 days to fill the average position in the United States. In April 2024 the Federal Trade Commission is expected to rule on banning noncompete clauses, which could increase job vacancies and push salaries higher for skilled workers by an estimated $300 billion per year.
of an employees' base salary to hire a new employee with benefits.
average cost a day of a job vacancy.
"baby boomers" will retire in 2024.
What does this mean for companies and People teams?
This year, “good enough” benefits will no longer be good enough to attract and retain employees. As workplace demographics shift and a labor shortage looms, employers must invest in doing everything to retain employees. This means supporting employees at different phases of their lives and careers and offering benefits employees actually want.
In the past year, Lively found that 84% of organizations have improved benefits in order to attract and retain employees according to a survey of 250 HR leaders. 90% of People leaders rate paid time off, healthcare coverage, salary, and bonuses as the most important benefits for retaining employees, but 70% say that all benefits are impactful for retention and attraction.
of organizations improved benefits to attract and retain employees.
of People leaders rate paid time off, healthcare coverage, salary, and bonuses as the most important benefits for employee retention.
of People leaders say all benefits have an impact on recruiting and retention.
Action items
Survey employees to discover what benefits they actually want and are important to them.
Benefits are only impactful if used and what employees really need may surprise you.
Invest in benefits that enable your organization to stand out as an employer and get the most out of your benefits budget.
These can include tax-advantaged savings accounts such as Health Savings Accounts and post-tax accounts such as Lifestyle Spending Accounts.
Develop a robust professional development training program to enable current employees to “upskill” into open roles and build deeper skills on your team.
This could include a Lifestyle Spending Account focused on employee training, partnering with a higher education provider for certification and training programs, or bringing those programs in house with a registered apprenticeship program that emphasizes on the job training.
Learn more
HSAs and your benefits package
How Health Savings Accounts are being used as part of a modern, flexible employee benefits package.
Support your organizations' DE&I Goals
How Lifestyle Spending Accounts can support a diverse workforce.
Learn more.
The benefits that will make a difference in 2024
According to Lively's survey of 250 People team leaders.