Offer preferred benefits to attract and retain talent, cut costs
As anyone who works in the sector knows, healthcare is currently facing intense financial and workforce pressure in the wake of the pandemic. The American Hospital Association estimates that hospitals and health systems lost $323 billion in 2020. At the same time, competition for a shrinking pool of qualified talent has deepened now that the worst of the crisis is over. The Washington Post reported that three of 10 frontline healthcare workers, many of them reporting symptoms of post-traumatic stress disorder, indicated they’re considering leaving the field.
Add these sobering numbers to the well-documented shortage of healthcare workers that existed long before COVID-19, and it’s clear that healthcare organizations have hurdles ahead.
With a rapidly aging population and burgeoning demand for medical services, healthcare providers can’t afford to lose their most capable skilled and unskilled people. To remain competitive in an environment of heightened uncertainty and worker scarcity, they need fresh ways to make smarter, more judicious use of their workforce, keep their best talent, differentiate themselves as a rewarding place to work and motivate the most qualified candidates to climb on board.
Differentiate to build loyalty
Employee benefits and total rewards packages are vital to an organization’s ability to edge out the competition in attracting and retaining qualified people. The range and types of benefits and rewards offered also send messages to potential candidates as well as existing employees about the organization’s values and attitudes toward its people.
Benefits and rewards can allow organizations to meaningfully differentiate themselves in the market. That differentiation can build loyalty and bolster attraction and retention. When it comes to developing benefits and rewards programs, however, providers tend to focus on benchmarking — measuring how well their offerings compare with those of competing organizations and the industry overall.
This approach makes sense, to an extent. Providers need to know how their benefits stack up against the competition. But benchmarking isn’t enough, particularly in a post-pandemic world of financial precariousness and employee ambivalence.
“The health crisis has spurred organizations to rethink talent attraction and retention,” said Tim Glowa, Grant Thornton’s lead in employee listening and human capital analytics.
Use preference analytics to meet needs, cut costs
In addition to benchmarking externally, providers are looking internally at their rewards and benefits, and listening to their workforce, using Grant Thornton’s analytics-driven strategy — employee preference optimization (EPO).
EPO is a tool that organizations can use to deliver more value to employees while also saving money. EPO can be applied broadly to optimize an organization’s total rewards plan or can be focused only on specific programs or employee markets, e.g., executive rewards, expat optimization or executive MBAs.
“A typical organization in the United States wastes about $5,000 per employee per year by giving people benefits and rewards they don’t value,” said Glowa. “Using EPO, we can help organizations design programs that 70% to 80% of employees think are better than what they have today, and that potentially save $2,000 to $3,000 per person per year.”
The preference analysis is custom-tailored to an organization’s specific priorities and parameters. It yields reliable insights, illustrating not only which rewards employees want most but also the trade-offs they are willing to make. EPO can pinpoint the mix of benefits and rewards that most closely matches employees’ needs, given where they are in their careers or personal lives.
The organization can provide that optimal mix of benefits and rewards more cost-effectively by shifting financial resources to the programs that matter most.
“It’s really important to understand what those preferences are,” said Ashley Edwards, senior manager, Human Capital Services. “And it’s not just about benefits and compensation. Things like career progression, learning and development programs, and work-life balance also come into play. For instance, organizations could offer a sabbatical for employees who are in danger of burnout to keep them engaged. The key is listening, and we can use this employee listening technique to better understand what employees really value.”
EPO is based on conjoint analysis, a type of statistical analysis often used to understand how customers — in this case, employees — value different components or features of their products or services — benefits and rewards.
Which would they prefer — twice the amount of life insurance, or an extra week of vacation per year? An increase in pay at 2%, 4% or 6% or three visits per year at the health system’s center of excellence for an aging parent, or a fitness benefit for themselves at a given dollar value per month?
“We work with our clients to understand the population they’re having concerns with,” said Edwards. “We target the population by working with the HR team to understand their areas of interest and can focus on specific employee groups.”
Insights gleaned from the preference survey data can help organizations pinpoint where resources are being wasted on — benefits and programs that employees would be willing to give up for more meaningful alternatives. A health system might see huge enrollment in one program versus another that is a significant cost to the organization but generates little interest. The organization can improve attraction and retention by shifting resources to the preferred benefit, reducing costs in the process.
Providers can also dive into specific benefit areas to understand what is valued by their people. “An organization may believe employees want additional employer retirement contributions but discover through a preference survey that they really value having more flexible work arrangements, such as four-day summer work weeks,” Edwards said. “We’re able to see those preferences in real time.”
The analytics platform enables modeling of the cost implications of various hypothetical benefits scenarios as well. The simulations help providers identify cost-saving opportunities while developing programs that more closely mirror the preferences of specific employee populations or the workforce at large.
Predict ‘flight risk’
EPO uses machine learning to predict the employees who are at high, moderate and low risk of leaving the organization within given time frames. Providers can proactively offer preference-based specific benefits and rewards to individuals in the “flight-risk” group who are high-performing employees.
“Organizations can get help and support in designing a program holistically and in communication, change management and rollout to employees,” Glowa said. “The goal is to make better decisions about your most important asset — your people.”