Gallagher Releases 2nd Annual Benefits Strategy & Benchmarking Survey

Cost containment, talent acquisition two biggest challenges cited by respondents

PR Newswire

ITASCA, Ill., July 17, 2014 /PRNewswire/ -- Arthur J. Gallagher & Co.'s 2nd annual Benefits Strategy & Benchmarking Survey reveals that employers continue to see rising benefit costs in 2014. In excess of 1,800 U.S.-based organizations participated in the survey spanning a wide range of industries, geographic regions, and employer sizes and types. The majority of participants (61 percent) have more than 100 full-time employees and 25 percent of participants employ 500 or more full-time employees. For-profit organizations account for 61 percent of participants, while 39 percent of participants are not-for-profit.

The two biggest challenges identified by these participants are the need to control benefit costs while attracting and retaining a competitive workforce. The survey, conducted by Gallagher's Employee Benefit Consulting and Brokerage operation, examines how organizations are responding to healthcare reform and rising costs, as well as their approach to private exchanges, wellness and retirement programs, and other benefit trends and opportunities. Employers can leverage the insights from the survey results to effectively make near-term decisions, as well as guide their long-term strategic planning.

"Although organizations may be aware of the changes that are shaping the future of the employee benefits market, the survey suggests that many are not yet ready to face the challenges these changes will bring," said James W. Durkin, Jr., President, Employee Benefit Consulting and Brokerage. "Those that adequately adapt to the current reality will optimize their ability to mitigate future costs."

Controlling costs

When asked to identify their greatest overall challenge, 67 percent of employers cited controlling benefit costs. Some of the leading strategies identified by the participants for containing benefit costs include:

  • increasing employee plan contributions (54 percent)
  • increasing deductibles (43 percent)
  • increasing out-of-pocket maximums (36 percent)
  • increasing copayments (30 percent).

Attracting and retaining a competitive workforce

Given today's dynamic workforce, employers are seeking to balance cost containment with employee engagement. Moreover, the increasingly diverse needs and preferences of the current workforce challenge employers to develop a benefits package that appeals to all employees. Survey results show:

  • Retirement plans continue to shift toward a defined contribution model, with 64 percent of respondents offering a 401(k) plan. Of those, 70 percent match employee contributions.
  • Employers continued to gravitate toward wellness programs with 44 percent of participants offering a program to their employees. However, even with the increase in the number of employers offering a wellness program, most programs (61 percent) have a budget of less than $10,000.
  • Although employees are often interested in long-term care as a voluntary benefit option, 82 percent of employers do not offer this benefit.

Conclusion

U.S. organizations of all sizes and types are looking to contain healthcare and other benefit costs, while competing successfully for talent. However, in today's uncertain environment and ever-evolving employee regulatory landscape, only 31 percent of employers surveyed have quantified the cost impact of healthcare reform on their organizations. Just 10 percent of participating employers have a written total rewards or strategic benefits plan with measurable objectives.

"There's no doubt that the changing benefits landscape will present organizations with complex challenges for years to come," said Mr. Durkin. "A holistic, innovative, data-driven employee benefits strategy is needed to strike the optimal balance in managing the best interests of employees and employers. This approach allows organizations to respond to change with agility, helping them to minimize risk, maximize rewards and drive growth."

The survey's Executive Summary & Strategic Insights is available at no cost. A comprehensive National Report, as well as custom reports with data specific to industries, regions and/or organizational size, may be purchased from Gallagher. To learn more about the survey, download the Executive Summary or request purchasing information, visit ajg.com/nationalbenefits2014.

For further information contact:




Sean Schubert

Media

VP-Sales & Marketing

Linda J. Collins

Employee Benefit Consulting and Brokerage

VP-Corporate Communications              

Sean_Schubert@ajg.com

Linda_Collins@ajg.com

630.285.5942

630.285.4009               

 

About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co. (AJG), an international insurance brokerage and risk management services firm, is headquartered in Itasca, Illinois, has operations in 27 countries and offers client-service capabilities in more than 140 countries around the world through a network of correspondent brokers and consultants. Learn about us at www.ajg.com.

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