The continued strong economy and low unemployment rate mean the current job market remains candidate-driven. The top talent generally prefers companies that offer a high salary with good benefits. Unfortunately for businesses, the rising cost of benefits hampers their efforts to source and hire the best.
In short, companies must provide a benefits package able to attract great candidates while retaining their own employees. So let’s take a closer look at a few strategies on how to accomplish this while costs are headed upwards. Ultimately, your company’s success likely depends on solving this puzzle.
Health Care Costs Driving the Increased Price of Benefits
The fact health care costs are still on the rise drives the rising cost of benefits. Even with a smaller annual rate of increase, these costs still greatly outstrip the rate of inflation. Companies in all business sectors struggle to give employees the benefits they want while still staying profitable.
Two main factors lie behind this seemingly endless rise in health care spending. Not surprisingly, one is the increased cost of healthcare services and drugs. An increased usage of benefits also matters.
A recent study of businesses with a large number of employees focused on the causes of the increase in the cost of benefits. These include:
- Specialty pharmacy benefits increasing at twice the rate of regular prescription drugs.
- High-cost claimants with more than $50,000 in annual claims.
- High-cost diseases and chronic conditions.
- Benefits administration.
Needless to say, finding the means to handle these costs, while still providing generous benefits, is daunting.
Strategies for Handling the Higher Cost of Health Care
Businesses are looking at multiple options to deal with the continued rise in health care costs. One obvious tactic is to limit employee access to expensive specialty medications. Instead, they either limit the amount of the medication able to be purchased at one time, or employees need to try a cheaper alternative first.
Both health savings accounts (HSA) and consumer-driven health plans are part of this equation to reduce the cost of benefits. These help employees set aside money on a tax-free basis to pay deductibles and other health-related costs. It’s an approach that also helps reduce the price of premiums.
Additionally, implementing an employee wellness plan that includes regular exercise and meditation helps improve the overall health of a business’s workforce. Leveraging technology to improve the efficiency of benefits administration is another wise strategy.
When your company needs help building a talented team, speak with the experts at Peyton Resource Group. As one of the top staffing agencies in Texas, we provide great candidates able to make a difference for you. Schedule some time with us soon!