Not yet a Member?
HR Magazine is highlighting the next generation of HR leaders.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
30+ HR education programs, including 4 NEW programs on hot topics, are available for registration.
Join us in Chicago for the latest trends and technology in talent management, and what to expect in the future.
Rising costs might force employees to pay a larger share
In response to higher expected costs, U.S employers appear poised to implement more employee health care and other benefit plan cost sharing, according to the 17th annual Top 5 Total Rewards Priorities survey conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS) and Deloitte Consulting LLP.
The survey was conducted in January 2011 among HR and benefits professionals from a diverse cross-section of U.S.-based organizations. Survey participants were asked to respond as representatives of their employers, with the exception of two questions asking about their personal challenges and plans as employees.
While a large number of employers expect an increase in the cost of providing benefits to employees, two-thirds of them are making no immediate changes to their benefits programs as they await health care reform regulations that might reduce plan design flexibility.
“Though the economy is rebounding, there are ominous signs that employees may soon need to start contributing more of their paycheck to total rewards programs,” said David Lusk, a principal at Deloitte. At the same time, “With concern for their ability to afford retirement, many employees are increasing their contributions to retirement savings plans, while employers are seeking more opportunities to share health care costs with them. This results in competing objectives.”
For 2011, employers ranked their top five priorities regarding total rewards (defined as compensation, benefits, perquisites and any other direct or indirect payments to employees) as follows:
1. The cost of providing health care benefits to employees.2. The willingness of employees to pay an increasing portion of benefits plan coverage.3. The ability of reward programs to attract, motivate and retain talent.4. The ability to adjust to and comply with current and future provisions of health care reform legislation.5. Clear alignment of total rewards strategy with business strategy and brand.
1. The cost of providing health care benefits to employees.
2. The willingness of employees to pay an increasing portion of benefits plan coverage.
3. The ability of reward programs to attract, motivate and retain talent.
4. The ability to adjust to and comply with current and future provisions of health care reform legislation.
5. Clear alignment of total rewards strategy with business strategy and brand.
Confronting Rising Costs
Regarding the total reward challenges facing employers:
• 85 percent of employers expect health care reform to increase benefits costs per employee.• 73 percent said health care reform will drive them to re-evaluate benefits over the next year.• 63 percent said controlling total health care costs is their primary focus as HR/benefits professionals.• 62 percent have considered increasing cost sharing for active employee plans over the past year.
• 85 percent of employers expect health care reform to increase benefits costs per employee.
• 73 percent said health care reform will drive them to re-evaluate benefits over the next year.
• 63 percent said controlling total health care costs is their primary focus as HR/benefits professionals.
• 62 percent have considered increasing cost sharing for active employee plans over the past year.
As employees, HR and benefits professionals said their top three personal challenges were:
1.Their ability to afford retirement, including post-retirement health care (ranked among the top three challenges by 75 percent of respondents).2. Job security (60 percent).3.The need to increase their retirement plan contributions (48 percent).
1.Their ability to afford retirement, including post-retirement health care (ranked among the top three challenges by 75 percent of respondents).
2. Job security (60 percent).
3.The need to increase their retirement plan contributions (48 percent).
“Challenges associated with attracting, motivating and retaining talent remain a concern for organizations rebounding from the recession,” said ISCEBS President Steven Grieb. “A clear priority for businesses today is their understanding, preparation and management of costs and provisions associated with health care reform legislation.”
Still More ChallengesAdditional findings from the ISCEBS/Deloitte survey highlighted respondents' concerns regarding:
The ability of employees to afford retirement.
The increasing responsibility to manage their rewards budgets.
The cost of providing health care benefits to retirees.
The ability to understand and make effective investment decisions for their 401(k) plans.
Inefficient and fragmented HR delivery models, including process, technology, organizational structure and vendors.
The investment performance of their 401(k) plans and other employer-sponsored savings and profit-sharing plans.
Re-evaluating the mix of financial vs. nonfinancial rewards offered in a total rewards program.
Elder care responsibilities.
Source: ISCEBS/Deloitte, Top 5 Total Rewards Priorities survey.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies