2023 Outlook

4 million. That's the number of Americans quitting their jobs each month since April 2021. The Great Resignation continues to ignite fire in the US labor market as more and more employees quit their jobs in search of greener pastures.

It's a labor market trend that shows no sign of easing up—a staggering 4.06 million Americans quit their jobs in October 2022 — just a slight decline from 4.1 million in September.

Which begs the question: What can employers do to reduce employee turnover?

One way is to offer a competitive benefits package.

Free coffee, unlimited PTO, gym stipends, and a smart casual dress code won't cut it here—the modern employee wants more. Employees are all too aware of soaring and high day-to-day costs and are looking for benefits investments that will support their mental, physical, and financial needs.

According to reports by NSHS and SHRM, health benefits and career development have grown significantly as a priority for most employees and job seekers. Let's take a closer look at the benefits trends that will dominate in 2023.

1. Development Support

Bright and ambitious individuals are seeking out organizations that can provide them with opportunities for career advancement.

In a recent Quantum Workplace survey, employees listed professional growth opportunities as one of the key drivers of engagement. Of the most disengaged workers, 72% said they weren't receiving enough development opportunities.

What it comes down to is this: employees will leave your company if they feel they aren't advancing professionally.

In the same survey, employees listed a dearth of growth opportunities as the second highest reason for leaving. That means higher retention can be attributed to employee satisfaction through learning and growth opportunities.

The converse is also true.

A lack of growth opportunities can result in high employee turnover. And Pew Research agrees with that, as seen in their research findings. When asked why they'd quit a job, 33% of the respondents cited a lack of career growth opportunities.

Employers are taking note of the value employees are putting on professional growth and are responding by allocating funds for employee training, conferences, and studies. Forward-thinking companies even offer their employees access to e-learning platforms and free language classes to promote professional development.

2. Healthcare Affordability

Paying for health care is a top concern for workers, especially low-wage earners and those with chronic diseases.

Employees who believe you care about their health will likely not leave for another company. Low deductible health care plans, such as a copay-based plan, are gaining traction by the day and are being adopted by businesses of all sizes.

Another interesting trend is that companies are making premiums for salary-based contributions more affordable to low-income earners. According to Mercer's research, 1 in 10 employers with over 500 employees uses a salary-based premium model.

These salary-based models are structured such that employees who make less money contribute less to their premiums, with the amount rising for those who earn more.

But with the rise of telemedicine and telehealth services, healthcare costs have become more affordable and accessible. To continue offering affordable and accessible health services, many companies will provide telehealth benefits in 2023.

According to Mercer's Health & Benefits report, 53% of employers plan to offer virtual behavioral health care in 2023, while 40% will offer a virtual primary care physician service.

3. Family-Friendly Benefits

Many organizations have been expanding family-friendly benefits over the past few years, and this trend is expected to continue in 2023.

According to Mercer, 70% of employers currently offer or plan to offer paid parental leave in 2023, while 53% provide or plan to provide paid paternal leave.

Meanwhile, nearly a third of large organizations surveyed plan to offer benefits such as fertility treatment and surrogacy in 2023. Additionally, 10% of large organizations (those with +5,000 employees) surveyed said they provide on-site childcare or will do so in 2023.

The Mercy survey also found that employers are increasingly focusing on the special needs of women in regard to reproductive health—from family planning to support during menopause. In fact, 37% of companies across the US extend at least one specialized reproductive health benefit to their employees.

To provide the needed reproductive health benefits, Mercer found that companies are conducting surveys to find out what their employees want.

4. Work-Life Balance

Many employees place a premium on work-life balance.

According to a recent Medallia survey, 50% of employees who quit their job as part of the Great Resignation say they left without a new job lineup. Once the line between personal and professional is blurred due to work overload, many employees end up quitting.

The report found that a vast majority of workers (70% to be precise) who left their employers in 2020 sought better work-life balance.

The modern employee has become conscious of how balancing their career and personal life can boost productivity, job satisfaction, and quality of life. This has prompted organizations to make employees' daily schedules more accommodating.

Forward-thinking companies are adopting a hybrid working model that supports a blend of remote and in-office working to allow their workers to spend more time with their families. Others are offering kindergarten services in the office building.

These initiatives foster a work-life culture that keeps employees satisfied and happier while reducing the possibility of workplace burnout.

5. Expanded Voluntary and Supplementary Benefits

Voluntary benefits refer to optional perks provided by an employer that employees may choose to participate in or decline.

These benefits are usually paid for by the employee rather than the employer, but at a discounted rate that the employer has negotiated with providers.

While employees still have to pay for these benefits, the rate is usually lower than they would pay without the company's subsidy. These could be "individually customized benefits" or provided on software platforms as SaaS products.

Examples of voluntary benefits include:

• Personal travel insurance
• Student loan repayment
• Identity theft insurance
• Financial counseling
• Corporate wellness programs
• Pet insurance
• Concierge services such as shopping and errand assistance
• Retail discounts
• Legal services

Voluntary benefits give your staff the opportunity to customize their benefits package to meet their needs. Some of these benefits can make your employees appreciate your company and work long-term, thus boosting retention.

Wrapping Up

Companies looking to retain more employees long-term should look into offering the benefits employees want. While it can be tempting to limit coverage to save money, losing talented personnel can prove more costly down the line.

Overall, benefits that support employees' mental, physical, and financial wellbeing will continue to retain your employees and attract job seekers in 2023 and beyond.