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Sunday, Jul 14, 2024

Policy Preferences

As competition for skilled workers increases, some businesses in the San Diego region are offering wider choices of employee benefits in order to retain their talent.

Maggie Osburn, executive vice president and general manager at HUB

International Insurance Services Inc. in San Diego, says this was inspired by the Affordable Care Act (ACA) and the use of health insurance exchanges to provide people with a variety of medical coverage options.

“The tipping point was when the federal government started the public (health insurance) exchange,” she said. “A lot of private firms are creating their own exchanges.”

The same technology used by ACA exchanges “is providing a technical platform that allows employers to offer a broader array of benefits with far more variety,” she said. “Employers are saying … we are going to give you $6,000, $7,000, $8,000 and you can spend the money. It allows people to customize their benefit portfolio.”

For example, a worker who thinks he or she may need time off to care for an elderly parent might choose parental care leave as a benefit, she said. Workers who are concerned about their own welfare as they age may choose long-term care coverage. Employees who own pets might choose an option that includes pet health insurance.

Becoming the Norm

Osburn predicts that offering menus soon will become commonplace.

“I think in some respects it is being driven more by midsize and smaller companies because they can move a little bit faster,” she said. “It rapidly is going to become the norm.”

At New York Life in San Diego, financial services professional Robert Gascho said he has observed employers become more creative with the benefits they offer. Businesses feel the need to do more to attract workers as the economy stabilizes and creates greater competition for skilled employees, he said.

“There are lots of different ways that employers are using benefits to both keep and attract new employees,” he said. “They are trying to make employees happy and keep people from jumping ship. How does an employer show they respect employees? Everybody wants something that is custom built for them.”

Looking Out for Themselves

Gascho noted that fewer companies are offering traditional pension benefits, which once were commonplace. The loss of pensions has triggered a desire in workers to make sure they are getting adequate benefits. They realize that it’s up to them to plan for the future.

Not all employers can afford to offer customized benefits, however. Many are struggling to cope with rising health insurance costs without passing too much of the burden on to their workers, said Peter

Brately, an employee benefits specialist at ActiveWave Insurance Solutions.

Customized benefits “are things that really sophisticated companies are offering to keep their employees for the most competitive jobs,” he said.

The trend of offering customized benefits may have been inspired by the ACA, but it is being driven by millennials. These 20- and 30-somethings are much more willing than their parents to change jobs if they don’t get the opportunities and benefits they are looking for, said Elizabeth Hewitt Gibson, a Hubb International vice president of business development in San Diego.

Demand for Variety

Many young workers aren’t willing to accept a one-size-fits-all benefits package, and this has put pressure on businesses to rethink their offerings, she said. Those whose skills are highly valued have the leverage to ask their companies for more benefit choices, and they are not shy about doing so, Gibson added.

“There has been a lot of discussion and experimentation around what is the right mix of benefits,” Gibson said. “A lot of companies have rich health care benefits that are designed for people who are married and have kids. The millennial generation that is coming into the workplace is delaying getting married, delaying having kids … They are used to a variety of choices.

“They want to contribute. They go after what they want. They are going to be more demanding and they are going to leave faster if they are not finding what they want. Different generations and stages of life want different things.”

In addition to pleasing millennials, there is a greater emphasis among businesses on keeping workers of all ages healthy and productive to ensure the well-being of the company, Gibson said. She noted that creating a menu of benefits that truly meets worker needs requires businesses to develop a greater awareness.

“This really is looking at the organization as a whole,” she said. “Organizations that are not doing this are going to see more turnover than organizations that are.”


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