SEE WHERE YOU STAND Benefits Strategy & Benchmarking Survey Social Services Industry Addendum

Transcription

1 SEE WHERE YOU STAND 2018 Benefits Strategy & Benchmarking Survey Industry Addendum

2 Survey Overview Gallagher s 2018 Benefits Strategy & Benchmarking Survey asked U.S. employers close to 300 questions across the spectrum of total rewards. This addendum highlights key findings and implications based on responses from 255 social service employers participating in this year s research. Social service organizations provide a wide range of vital programs that drive their mission. From day to day, they re tasked with maintaining impactful operations and generating revenue through public funding and donations. In a time of increasing financial constraints, limited federal and state contributions have made efficient resource allocation a growing priority. FULL-TIME EMPLOYEES (FTES) DOMESTIC 6 % 4 % 47 % 43 % Under 100 FTEs 500 to 999 FTEs 100 to 499 FTEs 1,000 or more FTEs While the relative financial health of these organizations may vary, the need to attract and retain a qualified staff is a shared reality. Social service employers strive to attract talent who GEOGRAPHY have unwavering enthusiasm for their organization s mission. And though recruitment and retention efforts are huge challenges themselves, it must be done while maintaining strict fiduciary standards. As many social service employers have limited budgets for compensation, it s critical for them to offer and ensure participation in strong benefit plans to attract and keep talent. 20 % 27% 15% 28% 10% NORTH CENTRAL SOUTH CENTRAL NORTHEAST SOUTHEAST WEST This benchmarking report outlines strategies and tactics employers in this sector are taking to cost-effectively improve employee engagement, resulting in better work. OWNERSHIP STRUCTURE1 4% FOR PROFIT 95% NONPROFIT 1Due to rounding, percentages do not total 100% BENEFITS STRATEGY & BENCHMARKING SURVEY INDUSTRY ADDENDUM

3 Human Capital Strategy EMPHASIS ON TALENT 50% 71% 52% UNDERSPEND ON WORKFORCE TRAINING AND DEVELOPMENT Have full-time turnover of 15% or more Consider talent retention a top operational priority People are the backbone of the social service sector. So in a tight labor market, it should be no surprise that social service employers rank attracting and retaining employees as the top organizational priority (71%) as well as the top HR priority (81%). Turnover is a major challenge in the sector half of social service employers reported turnover of 15% or greater last year, compared with 30% of employers across all industries. In terms of revenue growth, social service employers are optimistic, with a majority expecting revenues to increase a little (49%) or substantially (9%) over the next two years. To support this growth, 58% expect headcount to increase. A desirable compensation and benefits package is vital for recruitment and retention, yet just 11% have a multiyear compensation strategy and even fewer have one for benefits (7%). Taking a longer-term approach would allow sector employers to be more strategic and optimize for better employee and organizational outcomes. Training and development is the second-highest HR priority (46%), but 52% of social service employers say they don t spend enough money on training and development. The social service sector is attractive to younger workers, who are digital natives and tech savvy. As a result, human resource and benefits technology (HRBT) can help employers engage and support these employees. Currently, 83% of social service employers deploy HRBT to varying degrees, with 13% of users having a comprehensive HRBT USAGE AND IMPORTANCE GROWING 83% HAVE SOME FORM OF HRBT STRATEGY HRBT strategy aligned with organizational goals. Four in ten sector employers expect to expand their current HRBT strategy over the next two years, indicating the sector s awareness that HRBT can help them better manage talent. An additional 40% expect to expand their HRBT usage over the next two years GALLAGHER AJG.COM 3

4 Medical Benefits EMPLOYER HEALTH BENEFIT PERCEPTIONS BIGGEST CHALLENGES IN MANAGING HEALTHCARE COSTS 48% HIGH COST PRESCRIPTION DRUGS View as a cornerstone 61% of overall benefits 53% Report employees are satisfied with benefits 70% HIGH COST OF MEDICAL SERVICES TACTICS FOR IMPROVING HEALTHCARE VALUE AND OUTCOMES Offer wellness programs 51% Use telemedicine 47% Provide cost-transparency tools 38% Offer healthcare decision support 34% Offer disease management programs 30% How important are medical and pharmacy benefits to social service employers? Nearly half agree (48%) and 13% strongly agree that medical and pharmacy benefits are the cornerstones of their benefit offerings. But despite these benefits importance, only half (53%) report employees are satisfied with them. This may be related to the lack of affordability. While 82% report that single coverage is affordable, only one-third (33%) report family coverage is affordable. And merely 36% indicate their organization has an effective strategy to manage healthcare costs. Beyond increased employee cost sharing, social service employers healthcare cost-control tactics include wellness programs (51%), cost-transparency tools (38%) and healthcare decision support (34%). The use of telemedicine, considered an excellent means to lower costs and improve access, has risen from 25% of social service employers in 2017 to 47% in 2018, with an additional 16% planning to add it within two years. A defined contribution arrangement in which employers provide money to employees to buy their own medical coverage can also help lower the cost of benefits while making annual spend more predictable. This hasn t been a common approach, however, with just 3% of social service employers embracing it. Private exchanges provide a mechanism for offering defined contribution and outsourcing benefits management and administration. Eight percent (8%) of sector employers offer medical benefits through a private exchange, compared to 5% of employers across all industries. It s common for those offering benefits through a private exchange or other marketplace technology to also include life insurance (87%), dental (85%), vision (75%) or other voluntary benefits (63%) BENEFITS STRATEGY & BENCHMARKING SURVEY INDUSTRY ADDENDUM

5 Employee Engagement 57% REPORT A HIGHLY ENGAGED WORKFORCE TOP TACTICS USED TO IMPROVE ENGAGEMENT Give timely and constructive feedback 75% Connect employees efforts to positive impacts on strategy, mission, vision or values 50% CONSIDER MORE EFFECTIVE COMMUNICATIONS A TOP SOLUTION TO ADDRESSING HR CHALLENGES 72% Define clear performance goals 68% Communicate in a way that fosters trust and confidence 68% Identify development needs and create action plans 65% Employee engagement is more important than ever as employers seek to retain talent and maximize productivity in a tight labor market. Social service employers report high levels of employee engagement, with 57% agreeing or strongly agreeing that their workforce is highly engaged. To improve engagement further, sector employers most commonly rely on the following tactics: giving timely and constructive feedback (75%), defining clear performance goals (68%) and communicating in a way that fosters trust and confidence (68%). Not surprisingly, 72% of social service employers say they connect employees efforts to positive effects on organizational strategy, mission, vision or values. The role of community involvement in engagement shouldn t be overlooked. It s increasingly important to employees and job seekers to be part of an organization that s committed to creating opportunities for involvement in the communities where they live and work. Eighty-two percent (82%) of social service employers offer volunteer opportunities, and 64% offer community engagement programs. But only 18% have a clearly defined Corporate Social Responsibility statement, which can be an appealing, cost-effective recruiting tool. An integrated communication strategy also promotes retention, engagement and ultimately a strong organizational culture. In the social service sector, employers most often report that more effective communications would help the most in managing HR-related challenges (50%). But only 14% have a comprehensive communication strategy, with most (74%) opting for separate communication strategies for individual programs such as safety or wellness. Overhauling a communication strategy can be daunting, so employers may want to start with small changes in language, positioning, delivery channels and consistency to help better connect with and engage employees. GALLAGHER AJG.COM 5

6 Retirement Benefits 87% HAVE A RETIREMENT PROGRAM Defined contribution 79% Defined benefit 24% Cash balance 6% Non-qualified 3% Employees often face financial demands that can hinder retirement savings at every life stage. Helping them identify, mitigate and manage financial stress supports continuous improvement of their savings and wellbeing. For employers, this investment can also pay off in higher productivity and employee engagement. Among the 87% of social service employers that offer a retirement program, just 36% gauge employees retirement readiness. More than one-third (35%) auto-enroll employees in their retirement plan to increase participation and savings. Thirteen percent (13%) use auto-escalation, which automatically increases employee contributions at certain intervals, such as annually. 36% MEASURE RETIREMENT READINESS FINANCIAL WELLBEING OPPORTUNITIES BEYOND RETIREMENT PLANS Many social service employers contribute to employee financial wellbeing beyond retirement plans. Sector employers offer financial advisor sessions (61%), financial literacy and related education opportunities (40%) and debt counseling (22%) to help employees plan their retirement trajectory and offer savings and spending strategies. Social service employers may find it difficult to attract recent graduates with large student loan debt. To combat this problem, some (41%) offer student loan forgiveness programs to help employees (and sometimes even employees children) pay off or refinance loans. Tuition assistance offered by 32% of social service employers is another attractive program for younger workers. Not only does it support training and development, but it takes the financial burden off employees shoulders. When employers offer programs that match employees needs across their career span, they vitalize productivity and loyalty and their own longevity. Financial advisor sessions 61% Student loan forgiveness 41% Financial literacy and related education opportunities 40% Tuition assistance 32% Debt counseling 22% BENEFITS STRATEGY & BENCHMARKING SURVEY INDUSTRY ADDENDUM

7 Final Remarks Social service employers are trying to manage and optimize their workforce in an environment where attracting and retaining employees is challenging but critically important. They offer a compelling value proposition for young adults who are looking for a rewarding and worthwhile career. However, a strong labor market and limited compensation budgets elevate the need to be thoughtful and strategic when offering a competitive benefits package. Poorly understood and unappreciated benefit offerings may have major upside for sector employers willing to embrace them. And with minimal investment, social service employers can see significant returns. By simply better communicating benefits already in place, they will have more successful recruiting efforts and stronger employee engagement, helping support organizational wellbeing and better work. This addendum to Gallagher s 2018 Benefits Strategy & Benchmarking Survey has outlined key compensation and benefit management issues facing the social service sector in the areas of human capital strategy, medical benefits, employee engagement and retirement benefits. The intent is to help you build and refine total compensation that secures the talent you need to sustainably achieve your operational goals. To learn more, contact the Nonprofit Practice Managing Director, Phil Bushnell (Phil_Bushnell@ajg.com), or your local Gallagher consultant. GALLAGHER AJG.COM 7

8 About Gallagher Better. It s something all companies strive for. Better outcomes from better performance. But how do you get there? You start by building a better workplace. One that attracts, engages and retains top talent. What does that look like? It s a workplace where people feel they belong where there s a stronger sense of developing a career than punching a clock and a culture of opportunity that draws new talent because it inspires employees to deliver their personal and professional best. Gallagher s comprehensive approach to benefits, compensation, retirement, employee communication and workplace culture aligns your human capital strategy with your overall business goals. It centers on the full spectrum of organizational wellbeing strategically investing in your people s health, talent, financial security and career growth and developing benefit and HR programs at the right cost structures to support a multi-generational workforce. From evaluating the demographics of your workforce to surveying and analyzing competitor trends, Gallagher helps you gather new insights and apply best practices that promote productivity and growth. A data-driven focus allows you to continually improve. That s what it means to create a better workplace culture. It s about never being content to rest each time you reach your best. Your better is never finished. As you develop and sustain this destination workplace culture, your people can thrive and perform at a higher level optimizing your annual talent investment and mitigating organizational risk to maximize your profitability. Best of all, you gain a competitive advantage as a workplace that simply works better. TERMS OF USE The intent of this Survey is to provide you with general information regarding current practice within the employee benefits environment. The data does not constitute recommendations or other advice regarding employee benefit programs, and the user is in no way obligated to accept or implement any information for use within their organization(s). The decision to utilize any information provided rests solely with the user, and application of the data contained does not guarantee compliance with applicable laws or regulations regarding employee benefits. Information provided by the Survey, even if generally applicable, cannot possibly take into account all of the various factors that may affect a specific individual or situation. Additionally, practices described within the Survey should not be construed as, nor are they intended to provide, legal advice. The Website and the Content do not constitute accounting, consulting, investment, insurance, legal, tax or any other type of professional advice, and should be used only in conjunction with the services of a Gallagher consultant and any other appropriate professional advisors who have full knowledge of the user s situation. Gallagher does not represent or warrant that the Content will be correct, accurate, timely or otherwise reliable. Gallagher may make changes to the Content at any time. Gallagher assumes no responsibility of any kind, oral or written, express or implied, including but not limited to fitness for a particular purpose, accuracy, omissions and completeness of information. Gallagher shall in no event whatsoever be liable to licensee or any other party for any indirect, special, consequential, incidental, or similar damages, including damages for lost data or economic loss, even if Gallagher has been notified of the possibility of such loss. For the purposes of this section the term Gallagher shall be construed so as to include Gallagher Surveys as a marketing division and/or Gallagher Benefit Services, Inc. and its affiliates. Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc., a non-investment firm and subsidiary of Arthur J. Gallagher & Co., is a licensed insurance agency that does business in California as Gallagher Benefit Services of California Insurance Services and in Massachusetts as Gallagher Benefit Insurance Services. Certain appropriately licensed individuals of Arthur J. Gallagher & Co. subsidiaries or affiliates offer securities through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC and or investment advisory services through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Neither Kestra IS nor Kestra AS is affiliated with Arthur J. Gallagher & Co., or Gallagher Benefit Services, Inc. Neither Kestra AS, Kestra IS, Arthur J. Gallagher & Co., nor their affiliates provide accounting, legal, or tax advice. GBS/Kestra CD (exp030120) 2018 Arthur J. Gallagher & Co. All rights reserved. No part of this book, including the text, data, graphics, interior design and cover design may be reproduced or transmitted in any form, without explicit consent from Arthur J. Gallagher & Co. 18GBS25075C