We’ve been there many times with candidates. Great interviews are had. Numbers are discussed. Basic compensation parameters are nearly finalized. Side perks are presented. Everything appears to be in order. Happy client, Happy candidate. Then comes the time to open the inevitable can of worms that may be the benefits discussion.
In the Land Title Insurance and Settlement space, the cost and structural differences between former and new employer can often be huge. What is covered, what is not covered…does the spouse have a better plan, HSA, employer contributions…could the base be raised to compensate for a potential short fall? The list goes on and on and with numerous variables that now come into play, a wrench is sometimes thrown right into the gears of an otherwise smooth deal. Now, of course we attempt to communicate potential short falls as early as possible. That said, there is an art form to communicating less than amazing news and an artist must work with the materials at hand! Sometimes it just “is what it is”. Larger employers generally have more pull than smaller shops when it comes to negotiating lower costs with insurance companies, but even the big guys are seeing the numbers get out of hand. The relentless increase in the costs associated with healthcare benefits is causing the market to get creative to help balance cost and offerings, which can add more potential complications into the inevitable benefits analysis. So, what are employers, candidates, individual hiring authorities, and recruiters to do?
According to a recent SHRM article, larger employers can expect their total cost for providing medical coverage to rise 5% again for the sixth year in a row. That would be a 6% increase if they were not actively getting creative and making changes to curb that increase. The average annual employer cost for providing medical coverage is $15,000 per employee, and as mentioned earlier, smaller employers often see higher costs due to decreased negotiating power. On the other side, the average cost to employees including premiums and all out-of-pocket costs is estimated to average $14,800 in 2019. Many of the creative options used to reduce cost result in higher contribution rates for employees or reduced benefit options typically involving higher deductibles or limited provider networks. In many cases, larger groups are cutting out the brokers and negotiating directly with healthcare providers, direct contracting. This usually results in lower prices but employees are limited to that single provider. The market is also seeing larger employers pushing telehealth options that can greatly reduce costs by utilizing the latest technologies, allowing employees to have “face-to-face” meetings with a health professional from the comfort of their homes, via smartphone, tablet, or computer. Some larger employers are even cutting out standard care providers and are setting up onsite clinics and becoming providers themselves.
On top of the already tumultuous U.S. healthcare system is the prospect that our politicians have been threatening for decades to “fix it”. Both sides are screaming about burning down this or that and starting over, or healthcare for all, or Medicare for most. Promises are made and broken while employers and employees alike try to figure out how they are going to navigate the healthcare rapids while staying afloat. The fact that one’s ability to provide basic healthcare to themselves and their family is mixed into another large decision, making a potential career move, can make for a rather stressful situation.
We don’t claim to have the answer to sorting out the U.S. healthcare system, but we do have some tips for employers to keep in mind while going through the hiring process that may help to avoid late stage surprises.
- Understand the Competition’s Offerings. One of the best tips we can offer land title insurance and settlement companies looking to add talent is to know where your current benefits package stands relative to the market. Are your premiums higher than average for a similar deductible? Do you only offer HSA plans when the competition offers a PPO at a similar cost? It pays dividends to know your strengths and shortfalls to highlight your advantages. Also keep in mind the company dynamic of the target candidate. If you are looking to hire from an industry giant or from a smaller company, they may have vastly different offerings. By keeping these dynamics in mind, and a strategy thought out ahead of time, you may make much more appealing total compensation offers that take into account the unavoidable differences in employee healthcare costs.
- Go Visual! Having a brief summary of benefits ready to share with potential employees tends to be helpful for candidates that are trending towards an offer. No one wants to try and sort through the dense packets provided by insurance providers with obscure warnings and fine print, especially when the offer conversation is at the goal line. The basics can be conveyed with an easy sheet, more general in nature or customized to the individual.
- Get Creative to Better Compete. If you can swing it, maybe think of new options or perks to offer to help combat a less than stellar health benefit plan. These items can be attractive selling points to new hires. Options like the latest telehealth system or access to an on-site clinic, or any number of fringe benefits that can be offered to help make up possible cost disparities.
According to an article by AHIP, “71% of Americans are satisfied with their current employer-provided health coverage. Further, 56% indicated coverage remains a key factor in their choice to stay at their current job.” The peace of mind that comes with good or even adequate healthcare is irreplaceable and taking that into account is a vital part of attracting top talent. In the Land Title Insurance and Settlement space, employers and employees look on anxiously as the healthcare debate rages and significant changes are suggested. The changes could be for the better or for the worse. Regardless, they may affect everyone. Moving forward, keeping an eye on benefits and understanding the enormous impact they can have on current employees and potential candidates’ decisions will likely serve your company well.