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The headlines about the U.S. labor market may be gloomy, and job hunters may be reporting facing more trouble with finding new positions than they had expected.
But, from the perspective of a company selling employee benefits, the employment conditions still look pretty good.
That's the assessment of J. Gallagher, the chairman and chief executive officer of Gallagher, a giant insurance brokerage, benefits consulting and human resources advisory firm.
"We're just not seeing signs of economic weakness," Gallagher said Tuesday at an investor meeting. "In the U.S., the number of job openings is still ahead of the number of people looking for work."
Revenue indicators are all still positive, Gallagher added.
William Ziebell, the CEO of Gallagher's benefits and human resources consulting division, reported that many employers' objectives are shifting.
"We're seeing more employers focus on strategies and offerings to retain their employees compared to strategies to attract new talent," Ziebell said.
Ziebell also talked about how economic shifts that lead to employer headcount cuts might affect Gallagher's benefits revenue.
Much of the revenue tied to employers with 300 or fewer employees comes from headcount-based sales commissions, and much of the revenue tied to bigger employers comes from compensation arrangements that are negotiated up front, Ziebell said.
Eventually, big employers that slash headcounts will try to renegotiate their fees, but, "in the short run, that revenue won't change, because the scope of the work is still unchanged," he said.
Gallagher: Gallagher is a Rolling Meadows, Illinois-based company that helps U.S. employers provide voluntary benefits, such as critical illness insurance, as well as health plans, dental plans, disability plans and other types of group insurance plans.
The company streamed the investor meeting live on the web and posted a recording on its website.
The list of investment firms with securities analysts who asked questions during the call, and who showed that their own customers might be interested in the insurance and benefits markets, included Barclays, BMO, Evercore, Goldman Sachs, KBW, Mizuho, Truist and Wells Fargo.
Health benefits trends: Here's what Ziebell said about trends in price changes for employers that are renewing health benefits coverage:
◆ Prices for fully insured group health plans are increasing at rates from the "high single digits" up to more than 10%.
◆ Prices for the stop-loss insurance arrangements that protect employers' self-insured plans are "seeing average premium increases in the mid-teens and, in some cases, north of 20%."
◆ Price increases for prescription drug benefits are "into the low double digits."
"These trends are driven by increased utilization, including the number of diagnostics and treatments, health provider consolidation and hospital workforce shortages, cost shifts from Medicare and Medicaid to commercial plans, higher levels of chronic conditions, and newer cell and gene therapies," he said.
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