2015 Employee Benefits: An Overview of Employee Benefits ... - SHRM

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A Research Report by the Society for Human Resource Management (SHRM)

2015 Employee Benefits An Overview of Employee Benefits Offerings in the U.S.

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Percentage of organizations offering a PTO plan Percentage of organizations offering paid vacation to part-time employees Number of paid sick days advanced to newly hired full-time employees Perand Number Welfare Benefits Preventive and OfWellness Benefits Retirement Savings and Revenue per FTE HR-to-Employee Ratio HR Expenses Salary Time-to-Fill Cost-perTotal Annual HealthAnnual Care Cost perIncrease CoveredHealth Employee and Types of HealthofHealth Care Plans Percentage Traditional Final Average Pension Percentage ofofTraditional Career Pensionleave accrual by fiscal year Number of paid holidays per centage organizations withAverage paid personal Financial and Compensation Benefits Family-friendly Hire Annual Overall Turnover Rate fered Annual Voluntary Turnover Rate HRPays Expense to FTE Benefits Ratio Areas of Waiting Monthly Premium Employer for Planning Employee-Only Coverage Period Months for Leave Length of CliffinVesting Period 401(k)Benefits Employer Matchyear 401(k), 403(b) employees or Similar Prevalence forBenefits full-time PercentageRates of organizations offering paid bereavement leave to fullFlexible Working Benefits Personal Services Benefits Housing andEmployer Relocation Benefits Business HR Outsourcing Revenue per FTE HR-to-Employee Ratio HR Expenses SalaryStop-Loss Increase Time- Coverage Coverage for New Employees AmountAnnual of Specific (SSL) Annual Percentage of Out-of-Network Organizations Providing Contribution Graded Maximum Vesting Period CliffofVesting time employees number paid sabbatical days available to eligible employees PercentTravel Benefits Health and Period Welfare Benefits Preventive Health and Wellness Benefits to-Fill Cost-per-Hire Annual OverallDeductible Turnover Rate Annual Voluntary Turnover Rate for HR Expense toPrimary for Employee-Only Coverage Co-pay In-Network Care Percentage Office Visits EmployofforOrganizations Providing Retiree Health Care Percentage of Traditional Final age ofRetirement organizations offering paid military leave Percentage of organizations offering paid maternity Compensation Benefits Leave Savings and Planning Benefits Financial andPercentage HR-to-Employee HR Expenses Annual FTE Ratio Areas of HR Outsourcingee-Only Revenue per FTEEmployer Annual Health Care Costof Traditional Coverage Contribution to Health Savings Account Average Pension CareerBenefits Average Pension Length of Cliff Vesting Perioda PTO plan Percentage of organizations offering paid valeaveFamily-friendly Percentage of organizations offering ® ®Ratio ® ® ®Total Benefits Housing and Relocation Benefits Benefits Flexible Working Benefits Personal Services Turnoverand Rate Annual Voluntary Salary Increase Time-to-Fill Cost-per-Hire Annual Overall Number Plans Offered Monthly Premium Employer per Covered Employee Types of Health CareTurnover of Organizations 401(k) Employer Match 401(k), 403(b) or Similar Prevalence Rates Percentage cation to part-time employees Number of paid sick days advanced to newly hired full-time employBenefits Preventive Health andPeriod Wellness Benefits Business Travel Benefits Health Welfare perWaiting FTE HR-to-Employee Ratio Rate HR Expense to FTE Ratio Areas of for HREmployee-Only Outsourcing Revenue forHR Coverage forand New Employees Amount Pays Coverage Period in Months Vesting Period Percentagewith of OrganizaProviding Employer Contribution Graded Vesting paid personal leave accrual by fiscal year Number of paid holieesCliff Percentage of organizations and Compensation Benefits Leave Retirement and Benefits Financial Annual Overall Turnover RateSavings AnnualDeductible Vol- Planning Expenses Annual Salary Increase Time-to-Fill Cost-per-Hire Employee-Only Coverof Specific Stop-Loss (SSL) Coverage Annual Out-of-Network Final Average Pension Percentage of tionsforProviding Retiree Health Care Percentage of Traditional of organizations offering paid bereavement leave days perBenefits year for full-time employees Percentage Personal Services Housing and employees Family-friendly Benefits Flexible Working Benefits Revenue per FTE untary Turnover Rate HR Expense to Ratiofor Areas of HR Outsourcing forHR-toEmployee-Only Coverage Employer ContriageFTE Co-pay In-Network Primary Care Office Visits Period 401(k) Employer Match 401(k), Traditional Career Average Pension LengthBenefits of Cliff Vesting to full-time Maximum number of paid sabbatical days available to eligible employees Health and Welfare Benefits Preventive Healthof and Relocation Benefits Business TravelorEmployee Benefits Time-to-Fill Cost-per-Hire Annual TurnEmployee Ratio HR Expenses Annual Salary Increase Care Cost per Covered Number andRates bution to Health Savings Account Total Annual HealthOverall Providing Employer Contribution 403(b) Similar Prevalence Percentage of Organizations paid military leave Percentage of organizations offering paid Percentage organizations offering and Compensation Benefits Benefits Retirement Savings and Period Planning Benefits FTE Offered 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Expense tofor FTE Ratioand Areas ofCoverage HR Benefits Co-pay for In-Network Primary erage AnnualTurnover Out-of-Network Employee-Only time employees Percentage of organizations 403(b) or Similar Prevalence with paid personal leave accrual by fiscal year Number sion Length of Cliff Vesting Period 401(k) Match 401(k), Financial and holidaysGraded Health and Wellness Benefits Retirement Savings and Planning BenefitsEmployer Expenses Annual Salary Increase Time-toOutsourcing Revenue per FTE HR-to-Employee Ratio for HR Employee-Only Care Office Visits Coverage Employer Contribution to Health Savings Account Percentage of organizations offering paid bereaveofContribution paid per year for full-time Rates Percentage of Organizations Providing Vesting Period employees Cliff FlexibleProviding Workingment Benefits Personal Compensation Benefits Benefits Family-friendly Voluntary Rate HR Expense to FTE Fill Cost-per-Hire Annual Overall Turnover Rate Health Annual Care Total Annual Cost Turnover per Covered Employee Number and Leave Types of Health Care Plans Of-ofBenefits number of paid sabbatical days available to eligible leave to full-time employeesofMaximum Health Care Percentage Traditional Vesting Period Percentage Organizations Retiree Business of Travel BenefitsCareer Health and Welfare Services Benefits HousingWaiting and Relocation Benefits Ratio HRfor Expenses Annual Salary Ratio Areas of HR Outsourcing Revenue per FTE HR-to-Employee Coverage Period in MonthsPercentage for fered Monthly Premium Employer Pays Employee-Only offering paid military leave Percentage of organizations ofemployees Percentage of organizations Average Pension Length of Cliff Vesting Final Average Pension Traditional Savings and or Planning Benefits Benefits Preventive Health and Wellness Benefits RateAmount Annual of Voluntary Turnover Rate HR Coverage Increase Time-to-Fill Cost-per-HireCoverage Annual Overall Annual for NewTurnover Employees Specific Stop-Loss (SSL) of organizations offering a PTO plan Percentage of organizafering paid maternity Percentage of OrganizaPeriod 401(k) Out-of-Network EmployerRetirement Match 401(k), 403(b) Similar Prevalence Ratesleave Percentage Benefits Family-friendly Benefits Flexible Working Financial and Benefits Leave HR-to-Employee Ratio HR Compensation Expenses Expense to FTE Ratio Areas of HR Deductible OutsourcingforRevenue per FTE Coverage Primarytions Care Office Visits for EmployEmployee-Only Co-pay for In-Network employees Number of paid sick days advanced to newly tions offering paid vacation part-time of Period to Percentage OrProviding Employer Contribution Graded Vesting Period Cliff Vesting Business Travel Benefitsemployees Personal ServicesTotal Benefits Housing and Relocation Benefits Annual Salary Increase Time-to-Fillee-Only Cost-per-Hire Annual Overall Turnover Rate AnnualSavings Voluntary Annual Health Care Cost Health Coverage Employer Contribution toBenefits Health Account of organizations with paid personal leave accrual by fiscal hired full-time Percentage of Traditional Final Average Pension Percentganizations Providing Retiree Care Percentage and Wellness Benefits Retirement Savings and Health and Welfare Preventive Health FTE HR-to-Employee Turnover Rate HR Expense to FTE Ratio Areas of HR Outsourcing PlansBenefits Offered Monthly Premium Employer per Covered Employee Number Revenue and Typesper of Health Care year Vesting NumberPeriod of paid401(k) holidays per yearMatch for full-time employees Percentage of organizations offering Employer age of Traditional Career Average Pension Length of Cliff Benefits Leave Benefits Family-friendly Benefits leave Planning BenefitsRate Financial andforCompensation AnnualPeriod OverallinTurnover Ratio HR Expenses Annual Salary Pays Increase Time-to-Fill Cost-per-Hire Months for Coverage New Employees Amount for Employee-Only Coverage Waiting employees paidofbereavement to full-time Organizations Providing Employer Contri- Maximum number of paid 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Percentage ofwww.shrm.org/benchmarks Traditional Final Average www.shrm.org/benchmarks www.shrm.org/benchmarks www.shrm.org/benchmarks www.shrm.org/benchmarks Savings and Care Planning Financial and Compensation Benefits Family-friendly Turnover Rate Annual Voluntary Turnover HR Expense FTE Ratio of HR Outsourcing bution Rate to Health Savings to Account TotalAreas Annual Health CostBenefits per Covered Employee Number organizations vacation to part-time age Pension Length of Cliffand Vesting Period Leave 401(k)Benefits Employer Match offering 401(k), paid 403(b) or Similar Preva- employees Number of paid sick days advanced to Benefits Flexible Working Personal Services Housing and Relocation Benefits Revenue per FTE HR-to-Employee Ratio Expenses Annual Time-to-Fill Cost-perTypes HR of Health Care PlansSalary OfferedIncrease Monthly Premium Employer Pays Benefits for Employee-Only Coverage newly hired full-time employees Percentage lence Rates Percentage of Benefits Organizations 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Career Average Pensionleave Length of Cliff VestFamily-friendly Benefits Flexible Working Benefits Personal Services to-Fill Cost-per-Hire Annual OverallCare Turnover Annual Voluntary Turnover RateEmployer HR Expense to to eligible employees Percentage of organizations offering paid military leave Percentage OfficeRate Visits for Employee-Only Coverage Contribution to Health Savings Account ing Period 401(k) Employer Match 401(k),Benefits 403(b) Housing oravailable Similarand Prevalence Rates Percentage of OrgaRelocation Business Travel Benefits andContribution Welfare Benefits Preventive HealthCliff andoffering FTE Ratio Areas of HR OutsourcingTotal Revenue perHealth FTE HR-to-Employee Ratio HR ExpensesBenefits Annual and of organizations paid maternity leaveofPercentage of organizations offering a PTO plan Annual Care Cost per Covered Employee Number Types of Health Care Health Plans Ofnizations Providing Employer Graded Vesting Period Vesting Period Percentage Salary Increase Time-to-Fill Cost-per-Hire AnnualPremium Overall Turnover Voluntary Turnover Benefits Retirement Savings Planning Benefits Financial Compensation Benefits fered Monthly EmployerRate PaysAnnual for Wellness Employee-Only Coverage Waiting Periodand in Months Retiree for Organizations Providing Health Care and Percentage of Traditional Final Average Pension PerRate HR Expense to FTE Ratio Areas of HR Outsourcing Leave Benefits Benefits Flexible Working Benefits Personal Services Benefits Coverage for New Employees Amount of Specific Stop-LossFamily-friendly (SSL) Coverage Annual Out-of-Network centage of Traditional Career Average Pension Length of Cliff Vesting Period 401(k) Employer Housing and Relocation Benefits Travel and Welfare Benefits Preventive Deductible for Employee-Only Coverage Co-pay for In-Network Primary Care Business Office Visits for Benefits EmployMatch 401(k), 403(b) or SimilarHealth Prevalence Rates Percentage of Organizations Providing Employer Wellness Benefits Retirement Savings and Planning Benefits Financial and ee-Only Coverage Employer Contribution toHealth Healthand Savings Account Contribution Graded Vesting Period Cliff Vesting Period Percentage of Organizations Providing ReCompensation Benefits Leave Family-friendly Benefits Flexible Working Benefits Personal tireeBenefits Health Care Services Benefits Housing and Relocation Benefits Business Travel Benefits

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2015 Employee Benefits A Research Report by the Society for Human Resource Management (SHRM)

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Contents

Table of Contents

About This Research Report............................................................................................... 1 Executive Summary.................................................................................................................... 2 Survey Results................................................................................................................................. 6 Health Care and Welfare Benefits............................................................................................... 7 Preventive Health and Wellness Benefits.............................................................................. 14 Retirement Savings and Planning Benefits........................................................................... 18 Financial and Compensation Benefits.................................................................................... 21 Leave Benefits............................................................................................................................... 27 Family-Friendly Benefits............................................................................................................. 32 Flexible Working Benefits........................................................................................................... 35 Employee Programs and Services........................................................................................... 38 Professional and Career Development Benefits.................................................................. 41 Housing and Relocation Benefits............................................................................................. 43 Business Travel Benefits.............................................................................................................46 Other Benefits................................................................................................................................49 Employee Benefits in Today’s Business Environment.............................. 51 Impact of the Economy on Benefits......................................................................................... 51 Total Employer Costs for Employee Compensation and Benefits................................... 52 Reviewing and Analyzing the Benefits Plan.......................................................................... 53 Methodology..................................................................................................................................54 Respondent Demographics....................................................................................................... 55 Survey Methodology.................................................................................................................... 57 Notations......................................................................................................................................... 57 Prevalence of Benefits.......................................................................................................... 58 Benefits Index................................................................................................................................69 Endnotes............................................................................................................................................. 78 Additional SHRM Resources........................................................................................... 79 Acknowledgments.................................................................................................................... 81

A b o u t Th i s R e s e a r c h R e p o r t

A b o u t Th i s R e s e a r c h R e p o r t

About This Research Report

In March 2015, the Society for Human Resource Management (SHRM) conducted its annual survey to gather information on the types of benefits employers offer to their employees. The survey instrument listed more than 300 benefits and asked human resource (HR) professionals to indicate whether their organizations offered these benefits. If the benefit was not offered, the respondent was asked if there were plans to offer the benefit in the next year. The report is composed of 12 benefits sections as follows:

1 Health care and welfare benefits. 2 Preventive health and wellness benefits. 3 Retirement savings and planning benefits. 4 Financial and compensation benefits. 5 Leave benefits. 6 Family-friendly benefits. 7 Flexible working benefits. 8 Employee programs and services. 9 Professional and career development benefits. 10 Housing and relocation benefits. 11 Business travel benefits. 12 Other benefits.

Each section of the report includes two tables. The first table displays the overall percentage of organizations that currently offer each benefit and the percentage of organizations that do not currently offer but plan to offer each benefit within the next 12 months. The second table illustrates the percentage of organizations offering each benefit on an annual basis over a period of five years. Statistically significant differences by year are also noted. A number of benefits have been added, changed or dropped from 2014 to 2015. Forces driving the changes included SHRM’s own research of benefits trends, a need for clarification of selected benefits, member input, and external research and resources. Some of the new benefits added to this year’s report include egg freezing for nonmedical reasons, paid surrogacy leave, company-provided fitness bands/activity trackers, company-organized fitness competitions/challenges, and company-provided student loan repayment. Edited items are footnoted throughout the report.

2015 Employee Benefits | 1

Executive Summary

E x e c u t i v e S u m m a ry

Employers Retain Employee Benefits, But Shift Strategic Focus

Within the last 12 months, the majority of organizations have offered the same amount (58%) of employersponsored benefits or have increased (35%) the number of benefits offered (see Figure 1). Of the hundreds of types of benefits that organizations provide to their employees, health care remains the driver for how those benefits plans are composed, particularly as employers continue to weigh the various effects of the Affordable Care Act (ACA). According to a report by SHRM and EBRI, few organizations are eliminating health care benefits as a result of federal reforms.1 However, many are changing the composition of those plans—in some cases relying more heavily on a preventive approach that can reduce health care expenses—and shifting a greater burden of costs onto employees as well.2 This trend is reflected among the results in this most recent SHRM Employee Benefits research report. Consequently, patterns in health care spending directly affect the types of other benefits that organizations offer. And in an environment with limited compensation growth in most sectors of the U.S. economy, a competitive benefits package can make the difference in attracting top talent to an organization. Research has shown that many job seekers frequently place greater importance on health care coverage, flexible work schedules and other benefits rather than on their base salaries. Benefits plans should be viewed by HR professionals as a vital tool in their retention and recruitment strategies.

Figure 1: Changes in Employer-sponsored Benefits in the Last Year

58%

35%

63%

28%

7% Increased

Remained the same 2015

9%

Decreased

2014

Note: n = 402 (2015); 418 (2014). Respondents who answered “not sure” were excluded from this analysis. Source: 2015 Employee Benefits: A Research Report by SHRM

Benefits plans should be viewed by HR professionals as a vital tool in their retention and recruitment strategies.

2015 Employee Benefits | 3

E x e c u t i v e S u m m a ry

Summary of Findings Health care and welfare benefits: Five-year trends show an increase in the percentage of organizations offering mental health care coverage, contraception coverage, vision insurance, short-term disability insurance, health savings accounts (HSAs), critical illness insurance, employer contributions to HSAs and coverage for laser-based vision surgery. Compliance with the ACA may be affecting the growing prevalence of these benefits, although steady increases in the cost of health care over the last decade have led organizations to explore health care options that actively involve employees in their health care decisions. Forty-three percent of organizations offer HSAs, an increase of eight percentage points over the last five years; 30% of organizations offer employer contributions to HSAs, a 10 percentage point increase over the last five years. Meanwhile, there were declines in the percentage of organizations offering health care premium flexible spending accounts over the last five years. Preventive health and wellness benefits: One of the key strategies many employers are using to reduce health care benefits costs is to boost employee health through preventive health and wellness benefits. The past five years have seen increases in the percentage of organizations offering general wellness programs, health care premium discounts for employees’ participation in various programs, health and lifestyle coaching, and preventive programs specifically targeting employees with chronic health conditions. Retirement savings and planning benefits: The majority of organizations continue to offer defined contribution retirement savings plans. In fact, more organizations have offered Roth 401(k) or similar defined contribution retirement plans in 2015 compared with 2011. Furthermore, a greater percentage of organizations have provided retirement advice tools such as one-on-one individual investment advice and retirement preparation advice over the last five years. However, there have been substantial declines in the number of organizations offering defined contribution plan loans in 2015 compared with 2011. Financial and compensation benefits: The results revealed several statistically significant differences between 2015 and 2011. More organizations offered spot bonuses/awards and nonexecutive sign-on bonuses, and donated for participation in charitable events, while fewer organizations provided automobile subsidy for business use of personal vehicles, credit unions, full flexible benefits plans and payroll advances. Nonexecutive

4 | 2015 Employee Benefits

incentive bonus plans, group/classroom financial advice, one-on-one financial advice and qualified transportation spending accounts increased in prevalence since 2014. Leave benefits: While there were no statistically significant differences in paid vacation plans, fewer organizations offered a paid vacation leave donation program and a paid vacation cash-out option in 2015 than in 2011. Several leave benefits increased in 2015 compared with 2014: paid sick leave plans, paid family leave, paid maternity leave, parental leave above federal FMLA leave, and parental leave above state FMLA leave. Family-friendly benefits: There was a five-year decline in the percentage of organizations permitting employees to bring their child to work in an emergency and offering child care referral services and on-site parenting seminars. There were no statistically significant increases in the percentage of organizations offering family-friendly benefits over the last year. Flexible working benefits: Most of the flexible work benefits examined remained constant, though there were increases over the last five years in the number of organizations offering casual dress day (one day per week) and telecommuting on an ad-hoc basis. Employee programs and services: Several five-year trends were found: prevalence of paycards, employersponsored personal shopping discounts and pet health insurance increased, whereas prevalence of postal services, on-site cafeterias with fully or partially subsidized items and executive club memberships decreased. Professional and career development benefits: The majority of professional and career development benefits have remained steady. Percentage of organizations paying for certification/recertification fees in 2015 compared with 2011 increased, and prevalence of college selection/ referrals increased in 2015 compared with 2014. Housing and relocation benefits: Housing and relocation benefits yielded few differences between 2015 and 2011: fewer organizations offered home insurance programs and spouse relocation employment assistance. Business travel benefits: There were minimal changes in business travel benefits in 2015 compared with 2011: more organizations offered per diem for meals and first or business class airfare for domestic and international travel, whereas fewer organizations reimbursed personal telephone calls while on travel.

E x e c u t i v e S u m m a ry

Looking Ahead Prepare for more changes associated with the Affordable Care Act. Aside from determining the various effects of federal health care reform, as well as its impact on the types of plans provided to employees, HR professionals are at the center of their organizations’ regulatory compliance with the ACA. Starting in 2016, for example, small businesses with 50 to 99 full-time employees will need to start insuring those workers or be subject to penalties. Although businesses with fewer than 50 employees are not affected by this rule—and they represent 96% of all companies in the United States3 —HR professionals in the “50-to-99” category will need to weigh the costs of providing coverage and what types of plans to offer, or decide whether to forgo coverage and pay the federal penalties. SHRM research has shown that for many HR professionals, the complexity of the ACA is a major barrier to its implementation,4 and as a result, many have consulted their organizations’ legal counsel and sent HR staff to classes/training on the law. Consider career development benefits as a means of retaining and attracting top talent. Following a year when participation in professional development benefits dropped at many organizations, 2015 data show that this trend has reversed. This switch is a positive change, considering that many HR professionals have reported difficulty recruiting for full-time positions as of late.5 If the skills gap continues, organizations should consider training from within or offering other forms of professional development as part of their benefits plans. This approach can enhance the skills of their existing employees as well as provide an attractive benefit for recruitment targets of HR professionals. Be flexible and consider the needs of employees at all levels. Flexible work arrangements (FWA) have proven popular for workers of all demographic groups and should

be considered, if feasible, as part of a benefits package. Despite their increased use and popularity though, recent SHRM research has revealed a drop in the percentage of organizations that had a majority of employees eligible to participate in FWAs.6 HR professionals should consider many options when creating a flexible work plan, particularly because many workplaces include members of several age demographics. This approach may include off-peak hours for younger employees who may not prefer a 9-to-5 environment, or limited schedules for older workers who wish to transition into retirement, for example. Make employees aware of the benefits they have. Considering that benefits plans are a crucial segment of recruitment and retention efforts, it is paramount that HR professionals communicate the advantages of these benefits to employees as often as possible. Less than one-tenth of HR professionals said their employees were “very knowledgeable” about the employer-sponsored benefits available to them, according to recent SHRM research.7 And many admit that they need to do more to improve this situation—only about one out of five said that their benefits communication was “very effective” in informing employees. Using social media and various forms of internal communication systems can be an effective approach for HR professionals’ benefits strategies. Continuously obtain feedback on the effectiveness of benefits in recruiting and retaining employees. The workforce is constantly evolving, and these shifts influence how employees perceive their benefits plans. The marketplace is also continually undergoing change, so benefits programs must be regularly assessed to make sure that employees understand the value of their benefits packages and that the organization is remaining competitive in the marketplace. The use of benchmarking tools, benefits needs assessments and employee surveys may become even more widespread as technology helps make them more accessible and cost-effective.

2015 Employee Benefits | 5

Survey Results

H e a lt h C a r e a n d W e l fa r e B e n e f i t s

Health Care and Welfare Benefits

Table A-1: Health Care and Welfare Benefits Currently Offer the Benefit

Plan to Offer the Benefit in the Next 12 Months

Dental insurance

96%

0%

Prescription drug coverage

96%

0%

Mental health coverage

91%