As Job Market Tightens, Touting Benefits Can Close the Deal

The value of rewards mix, smartly communicated, also keeps talent onboard

By Stephen Miller, CEBS October 15, 2015

As finding key talent becomes more difficult, HR professionals are strategically leveraging employee benefits as a recruiting tool, according to 2015 Strategic Benefits survey findings released by the Society for Human Resource Management (SHRM) on Oct. 15.

Benefits—when their value is effectively communicated—also play a growing role in employee retention.

A randomly selected sample of SHRM members participated in the 2015 Strategic Benefits survey, which was fielded in May and June 2015.

A Recruitment Advantage

More than half of HR professionals responding to the survey (55 percent) said their organization had difficulty recruiting highly skilled employees in the past 12 months. Forty percent of respondents said one of the ways they are hoping to tempt top talent is with their benefits programs, a statistically significant increase from 2013 (30 percent).

“This total rewards approach to staffing management should include such benefits as health care, retirement savings and planning, financial and compensation, flexible work and professional career development benefits, which the majority of HR professionals agreed will all increase in importance during the next three to five years as part of recruitment strategies,” said Karen Wessels, researcher for workforce planning at SHRM.

Health care remains the most highly valued benefit for job seekers, SHRM’s researchers found. About 66 percent of respondents believed health care benefits would become a more important part of their efforts to recruit employees at all levels in the next three to five years; more than half indicated the same for retirement savings and planning (59 percent); financial and compensation benefits such as financial advice, bonus plans, subsidies and educational assistance (53 percent); and flexible working benefits (52 percent).

“HR professionals should continue to devote their attention to health care and its role in the recruitment process, particularly as they face increased requirements associated with the Affordable Care Act,” Wessels said.

Talent Retention, Too

More than a third (36 percent) of survey respondents said their organization had difficulty retaining current employees at all levels in the past year, a significant increase from 2013 (26 percent) and 2012 (25 percent). Thirty-three percent said their organization leveraged their benefits program to retain employees, up from 18 percent in 2013 and 20 percent in 2012.

“In this period of limited wage growth, it is frequently not an option to offer higher salaries as a means of retaining top talent,” said Joseph Coombs, SHRM’s senior analyst for workforce trends.

When choosing which benefits to leverage for retention, “HR professionals should first point to health care and retirement savings and planning benefits,” Coombs said. “These two offerings are cited most often by HR professionals in retention strategies, undoubtedly due to the increasing cost of health care and the fact that extensive research has shown that many workers are not confident that they will have adequate financial resources when they reach retirement age.”


HR professionals were asked to identify their organization’s main strategic focus for their employee benefits package.

Source: SHRM Survey Findings: 2015 Strategic Benefits—Assessment and Communication of Benefits

Young Workers and Near-Retirees

Fewer HR professionals said their organization leveraged flexible work arrangements in 2015 as a retention strategy for high-performing employees, compared with previous years, the survey showed. However, flex benefits should not be dismissed as a means of retaining workers.

“These benefits have proven to be highly valued among two sizable demographic groups—Millennials and 55-and-older workers,” Coombs said. “Millennials have shown an increased preference for having greater control over their own schedules, and many place greater emphasis on organizational culture, rather than compensation-related aspects of a job.”

“The 55-and-older segment is frequently relied on for filling highly skilled positions,” said Wessels, “and these workers may need flexibility in scheduling, whether to care for family members or to conduct a phased retirement from the workplace, among other reasons.”

Investing in Wellness

Aside from cutting health care costs, promoting employee wellness may also benefit an organization’s recruiting and retention efforts.

About two-thirds (69 percent) of HR professionals indicated that their organization offered some type of wellness program, resource or service to its employees. Similar to previous years, 40 percent of HR professionals from organizations that offered employee wellness initiatives indicated their organization increased its investment in these offerings this year.

Among other findings:

  • 52 percent of respondents from organizations that offered some type of wellness program, resource or service indicated employee participation increased last year compared with the year before.
  • 82 percent also rated their wellness initiatives as being “somewhat effective” or “very effective” in improving the physical health of their employees.
  • 77 percent of respondents from organizations that had wellness initiatives said they were “somewhat effective ” or “very effective” in reducing the costs of health care.

Among the respondents who offered wellness incentives or rewards (59 percent):

  • 92 percent said their organization’s wellness incentives were “somewhat effective” or “very effective” in increasing employee participation.
  • 36 percent indicated they were “very effective.”

The most common wellness incentives or rewards offered were a reduction in the employee’s health care premium (45 percent); gift cards (37 percent); company gift items such as T-shirts, mugs and gym bags (25 percent); and recognition in a company newsletter, intranet, etc. (20 percent).

Millennial and Generation X employees were most likely to view wellness programs as an important job satisfaction contributor.

Communicating value

When asked to name the main strategic focus for their employee benefits package, 29 percent of HR professionals indicated controlling health care costs. But close behind, with 28 percent endorsement, was ensuring that employees understand the value of their benefits package.

Improving employees’ knowledge of their benefits has been an ongoing challenge, but some progress on this front has been noted:

  • 66 percent of HR professionals said their organization’s employees were “somewhat knowledgeable” about the employer-sponsored benefits available to them.
  • 16 percent said their employees were “very knowledgeable,” an increase from 2014 (9 percent).

The top benefits communications method used by organizations was providing online or paper enrollment materials to employees (76 percent). However, this represented a decrease of 8 percentage points since 2012 (from 84 percent).


HR professionals were asked what benefits communications methods they were using.

Source: SHRM Survey Findings: 2015 Strategic Benefits—Assessment and Communication of Benefits

Few respondents (3 percent) indicated that their organization used social media as an employee benefits communications tool. But among respondents who indicated that their organization was not using social media, 9 percent said they plan to start using social media within the next 12 months.

“Given the low-cost nature of social media channels, HR professionals may consider using this medium as a means of engaging and educating their employees about benefits packages and controlling associated costs,” Wessels said.

While most HR professionals said their benefits communications efforts have some degree of effectiveness, one-half of those surveyed do not use any methods to determine workers’ knowledge of their benefit offerings.

“Determining employees’ familiarity with benefits is an important component of communication plans, since many workers and job seekers today may see little promise of higher base salaries and therefore favor attractive benefits packages, particularly those that include flexible work arrangements,” Wessels said.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.


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