Nearly one-third of organizations increased their overallbenefits offerings in the last 12 months, mainly to get a leg up ontheir competitors, according to the Society for Human ResourceManagement’s 2017 Employee Benefits Survey.

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Related: What benefits do millennials want themost?

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The top reason for increasing benefits was to remain competitivein the talent marketplace, as two-thirds (68 percent) of the 3,227human resource professionals surveyed say last year theyexperienced recruiting difficulty and skill shortages for certaintypes of jobs.

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“Benefits can be leveraged to help with common recruitingstrategies, including increasing retention efforts, expandingtraining programs to help improve skills of new hires,using/enhancing an employee referral program, offering moreflexible work arrangements, providing monetary incentives tocandidates (e.g., signing bonus) and offering new job perks,” theauthors write. “Of these strategies, HR professionals indicatedthat offering more flexible work arrangements was the mosteffective.”

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The benefit most likely to experience growth was wellness, with24 percent of the respondents stating this, followed byhealth-related benefits (22 percent), professional and careerdevelopment (16 percent), employee programs and services (15percent), flexible working (14 percent), retirement savings andplanning (13 percent), leave (12 percent), family-friendly benefits(11 percent), housing and relocation (4 percent), and businesstravel (2 percent).

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“Organizations could be adding wellness benefits as acost-reduction strategy or possibly to supplement the loss ofhealth benefits options with less costly benefits,” the authorswrite.

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“Other SHRM research found more than three-quarters (77 percent)of organizations indicated their wellness program was somewhat orvery effective in reducing health care costs, and 88 percent ratedtheir wellness initiatives as somewhat or very effective inimproving employees’ health.”

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Related: Employers mitigate health care costs withpreventive care, wellness plans

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The most common wellness benefit is providing wellness resourcesand information (71 percent), and 62 percent give wellness tips orinformation at least quarterly in the form of a newsletter, e-mail,column or tweets. About 3 out of 5 organizations (59 percent) offera general wellness program.

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Only 6 percent of respondents decreased benefits overall. Largeorganizations (12 percent) are three times more likely than midsizeorganizations (4 percent) to have decreased overall benefitsofferings in the past 12 months.

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Related: Pressured by gig economy, employers look tobenefits for retention

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“Most commonly, organizations had to decrease the level ofbenefits to remain financially stable, whether it was due toincreasing costs of benefits, economic factors or poororganizational performance,” the authors write. “Otherorganizations had experienced a merger or acquisition or hadimplemented other strategic changes to their organization or totheir benefits package.”

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Although many organizations have been extending health carecoverage to employees’ families, two-thirds of organizations (66percent) are very concerned about controlling health care costs andanother 31 percent are somewhat concerned. From 2016 to 2017,health care costs increased for 79 percent of organizations, withan 11 percent increase on average.

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“One strategy that some organizations are using to mitigate thecosts of health care is to implement restrictions on coverage forspouses and domestic partners,” the authors write. “Most commonly,organizations added a surcharge or denied coverage if theemployee’s spouse was offered coverage by another employer.”

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Other cost-saving measures included providing only secondarycoverage, charging higher premiums or cost-sharing amounts, and notallowing employees to use pretax earnings to pay for spousalpremiums. Organizations were less likely to place restrictions orsurcharges on coverage for dependent children, while 19 percentadded a smoking surcharge to the cost of health care premiums foremployees.

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Although PPOs remain the most common type of health care planand have stayed steady over the past five years, more organizationsare adding a health savings account component to their health carecoverage. More than one-half (55 percent) of organizations offeredthis benefit in 2017, and more than one-third (36 percent) providedan employer contribution to the HSA, also showing an upwardtrend.

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“In today’s competitive talent marketplace, it is imperative fororganizations to make informed and strategic decisions about whatbenefits to offer as part of their total rewards strategy,” theauthors conclude.

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“Using a variety of sources to stay up to date on benefitstrends and innovative strategies and continually assessing the fitof offerings with your organization’s culture are crucial steps insecuring the organization’s current and future talent needs.”

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.