Despite concerns about inflation and a softening economy, the number of open jobs in the United States rose in July, indicating a continuing tight job market. Employers are still urgently seeking workers to fill a backlog of open positions and fill new ones. CFOs and other senior-level leaders are acutely aware of the challenge. Many are frustrated by their inability to attract qualified candidates, even when proposing significant wage hikes.
Clearly, the historic formula of pay, perks and time off has shifted. Employees expect far more, and C-Suites are questioning what else to offer.
Recent research suggests a mainstay of HR strategy—benefits, particularly those related to employee healthcare—is underrecognized for its potential to influence recruitment and retention. According to the 2022 Health at Work report from Quest Diagnostics, workers at companies with 1,000 or more employees say the quality of a company’s benefits for physical and mental health largely defines its attractiveness as an employer of choice. When asked to cite the top two factors for attracting and retaining workers, half (50%) cited comprehensive health insurance, making it the highest rated factor. And this makes sense given how expensive, complex and critical healthcare is for employees in the U.S.
These data may surprise some CFOs, who may regard employee health benefits as a costly, but necessary part of doing business. Total average employer costs, including premiums, was an estimated $13,360 per employee in 2022, and are expected to rise more than 5% next year, according to the Society for Human Resource Management.
At the same time, the recent shuttering of Amazon Care highlights the challenge of employee health management.
Yet, there are several good reasons why investing in employee health now, more than ever, is a prescription for recruiting and retaining talent:
• Your employees expect you to lower healthcare costs: Eighty-nine (89%) percent of employees Quest surveyed say believe health insurance is too expensive, and 88% believe that employers need to be able to control health insurance expenses more. Cutting back on these benefits now may improve cost management, but put the ability to attract and retain workers at risk.
• Your employees are sicker: Every CFO knows that COVID-19 upended the workplace. Less well known is that the pandemic also made employees more prone to developing a host of preventable—and costly–diseases.
About 3 in 5 (63%) employees surveyed by Quest in early 2022 say they put off routine medical appointments and/or screening over the past 2 years. This finding is consistent with other studies showing delayed diagnoses of conditions ranging from diabetes to cancer increased over the past two-plus years. These data are highly concerning because most diseases, from heart disease to cancer, grow less responsive to treatment as they progress.
According to the Centers for Disease Control and Prevention, five chronic diseases or risk factors—high blood pressure, diabetes, smoking, physical inactivity and obesity—cost U.S. employers $36.4 billion a year because of employees missing days of work. Add in the effects of delayed care over the past two-plus years, and employee health (and associated cost) seems primed to worsen.
Encouraging employees to return to care should be a priority for every CFO. Health screening programs that provide choice and support engagement are key. For instance, Quest provides worksite, patient service site and at-home screening options, followed, for high-risk individual, with connection to behavioral prevention programs. This program is highly convenient for employees and provides what is essentially and annual virtual primary care service, with referrals to needed downstream care. At Quest, about 70% of employees participate in this program each year.
• Your employees need more mental health support: Eighty-four percent (84%) of human resource executives Quest surveyed are deeply concerned about employees’ mental health, the same proportion (85%) that expressed concerns about employees’ physical health. Yet, only about half of employees we surveyed (48%) said their employer offers mental health benefits.
A separate recent survey by the American Psychological Association and Harris Poll found that eight in 10 U.S. workers say that how employers support their employees’ mental health will be an important consideration when they seek future job opportunities. Despite this, other research shows 4% of employers reduced their contributions to mental health or substance abuse services in 2021, and the larger the firm, the more likely the reduction.
Mental health should be a priority, especially in healthcare and other industries experiencing high rates of pandemic-related workplace burnout. At Quest, we take employee mental health very seriously, going so far as to fund free mental health consultations for our 50,000 employees in 2022 (enabled largely by cost efficiencies generated by our employee population health program).
Employee health is foundational to business productivity. Encouraging a return to care and investing in physical and mental health benefits are part of the prescription for attracting the best workers and keeping them engaged.