The latest Salary Budget Planning Survey by globally operating brokerage company and advisory firm WTW indicates that the labor market remains considerably hot and that the majority of companies will be offering substantial pay raises in line with last year’s figures.

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According to the survey, the top two factors that are leading businesses to make changes in their salary, wage, and benefits strategies in 2023 are inflation and a particularly tight labor market, with 61% and 60% of the respondent vote, respectively, though the labor market and especially inflation have calmed in recent months. Some of the other top reasons that employers have been making compensation adjustments include cost management, worse-than-expected financial performance, and in anticipation of economic downturn. 

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Despite the more than 50% of survey respondents that reported having trouble attracting and retaining talent over the last year, there is a great deal of optimism on that front with regard to 2024, with just over one-third (35%) expecting those difficulties to extend into the next calendar year. It’s also worth noting that the percentage of respondents currently experiencing or having recently experienced attraction and retention problems, while still a majority, is trending downward slightly from last year. 

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In light of the hot talent market as it currently exists however, most companies have been making strategic shifts in their compensation packages and benefits offerings in order to remain competitive and keep key staff onboard. To achieve those ends, about half of all respondents reported having reviewed compensation and bonuses for entire subsets of employees (i.e. those groups with skill sets that are especially competitive in the labor market). Further, a substantial portion of respondents have taken other similar measures as well, including raising starting salary rates for new hires and increasing spot and loyalty rewards.

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In practical terms of as for how those compensation adjustments are playing out, 2023 has seen an average 4.4% increase in wages, which is significantly up from the average 3.1% increase reported in 2021. That said, survey forecasts are expecting a slightly lower increase of 4% in 2024, so there does appear to be some ebbing here, though the vast majority of employers (70%) still anticipate pay raises next year to be at or above the same level as this year, while just 14% are budgeting for lower year-to-year pay raises.

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It’s also worth noting that more and more employers are utilizing a strategic approach to funding these larger compensation figures via total rewards optimization, with twice as many employers going this route as of the most recent survey compared to the prior year’s survey. 

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Beyond simply adjusting compensation figures, many employers are also incorporating other talent initiatives into their attraction and retention efforts, including emphasizing diversity, equity, and inclusion; allowing employees greater schedule flexibility; boosting health and wellness offerings, optimizing bonus and reward systems, offering additional training and experience opportunities, and making other changes specifically designed to improve the quality of the employee experience with the company. 

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You can read more about this research and analysis here.

A substantial portion of workers in the US aren’t using their allotted sick leave even when they are genuinely ill, and are instead attempting to carry on with their work despite the medical issue. 

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It’s important to note as preface that this behavior is typically well-intentioned and in many cases admirable, especially when an employee has an important role of function that they don’t want to see neglected or burdening their teammates during their absence. Still, unless that work can be conducted remotely, there are negative consequences to showing up sick to work on site or around other people, and if the last few years have taught us one thing it should be the practical concerns involving disease communicability. 

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A recent study from BambooHR determined that nearly 9 out of 10 American workers have knowingly come to work sick just within the last 12 months, and nearly half of those employees who came to work sick did so on more than one occasion over the course of the year. 

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It should be made clear at the outset that one of the main factors involved here is a lack of adequate paid sick leave. About 25% of all workers in the US don’t get paid when they don’t show up to work regardless of their health status, which forces people to choose between sacrificing financially and potentially contaminating others while aggravating their own illness, which in turn often leads to worse financial and health-related outcomes in the long run. 

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Even for the 75% of employees who do have access to some form of paid leave, there are a number of other influences that are causing them to underutilize sick leave. For example, some people experience an array of negative emotions when they use sick leave, ranging from stress and guilt to embarrassment and fear that their coworkers or managers think they’re faking it. Further, that anxiety associated with calling in sick seems to be even worse now that working from home and conducting meetings via video conference have become so much more commonplace in the post-pandemic era, even though it’s becoming increasingly clear that having employees working while ill isn’t good for either the employees or their employers. 

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Of course, many of those concerns that employees have about utilizing their sick leave are very much justified, as the same study revealed that more than 3 out of 4 operational managers have suspected an employee was abusing their sick leave, and more than 8 in 10 HR managers have shared that same suspicion. To be fair, the suspicions these managers maintain are very much justified too, since more than 4 in 10 workers had claimed to be taking a sick day within the last year even though they were not physically sick, including more than half of HR professionals themselves. 

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In order to create a better system that better serves employees and companies alike, one advisable route is to reclassify sick leave under a larger category like ‘personal days’ or ‘wellness breaks’ or something that makes employees feel less pressured to meet a certain sickness threshold before utilizing them. The survey authors also recommend that employers set very specific guidelines about what managers can and can not ask employees regarding when, how, and why they are exercising their allotted leave. 

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A generous sick leave policy that isn’t enforced or that employees don’t feel free to use is no better than a bad sick leave policy, and any such policy that leaves employees reluctant to take time off to both their and the company’s detriment is clearly not working as intended, but company’s can certainly do better by ensuring paid sick leave is available and governed by transparent policies that reduce employee anxiety and managerial suspicion to everyone’s mutual benefit. 

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You can read more about this topic here. 

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As we hit the mid way point of 2023, Forbes has put together a list of some of the employee benefits that are proving to be most attractive to employees -both prospective and current - in the employment market as it currently exists.

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On a macro level, perhaps the most notable aspect of the latest evolution in employment trends involves the scope of employee benefits packages, which are much more comprehensive in today’s environment than they have been in the past and now include considerations such as employees’ general well-being, financial security, and both personal and professional growth. 

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Another key, ongoing adaptation in employee benefits offerings is the increasing amount of customization and the tailoring of specific offerings to best serve employee needs on the most granular level that’s feasible. This near personalization of benefits helps foster loyalty and engagement among employees, who in turn are more productive and effective in their job roles as a result of feeling like they are working within a supportive environment for an organization that cares about and is responsive to their needs. 

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As for the specific benefits offerings that are especially hot commodities in today’s hot job market, some of the most in-demand include:

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• Retirement Benefits and Financial Security: Companies can demonstrate their investment in employees’ long-term financial well-being via contributions to retirement savings plans like 401ks and pensions, which are especially valued by employees when accompanied by financial education programs and other resources that can assist them with money management and financial planning.
• Insurance coverage: It’s no surprise of course to see health insurance is among the list of most in-demand employee benefits, which has likely been the case for the last 75 years - although a more all-inclusive approach including dental, vision, and mental health services is necessary to compete for top talent in the current climate. Disability (long-term and short-term), accident, and life insurance are other popular insurance offerings. 
• Flexibility With Work Schedules & Leave: Work/life balance, job satisfaction, and general well-being are top priorities for an increasingly large portion of the worker population, and building in flexibility for employees when it comes to work time and location is one of the best ways to address all of the above. Generous PTO and leave policies also play a big role in employee job satisfaction and work/life balance, as well.
• Professional Development, Training, & Education: Providing employees with opportunities to build new skill sets, access learning opportunities, and gain experience are big pluses with today’s workforce. Mentorship matching, career advancement counseling, and even tuition reimbursement programs are all great ways to attract and retain talent through investment in employee growth.
• Mental & Physical Wellness Support: With employees emphasizing the importance of mental health more than ever, employers are following suit by offering employee assistance programs and access to counseling services, in addition to programs and platforms that encourage and reward both exercise and self care.
• Family Benefits: Whether subsidizing child care or senior care, providing adoption assistance or fertility benefits, or simplifying parental leave policies to better accommodate the demands of raising children, employees today are very interested in how the companies they work for are making their family lives easier to manage alongside their job expectations. 
• Legal & Housing Support: With access to the housing market becoming out of reach for a growing number of Americans, housing subsidies and moving assistance are at a substantial premium, as are legal services to assist employees who may be encountering legal issues that have become obstacles in the way of improving their housing situations. 

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Given a job market that has remained consistently hot despite inflationary pressure and the interest rate hikes meant to cool both hiring and inflation, focusing on the benefits that matter most to employees is necessary to compete for top talent, and the benefits that matter most to employees clearly revolve around the benefits that best enable them to prosper, grow, and thrive in both personal and professional capacities. 

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You can read more about these in-demand employee benefits as outlined by Forbes here. 

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Livia Martini, Chief People Officer of Gympass, conducted a survey that elicited responses from more than 2 thousand human resources professionals around the world. Her aim was to collect data on the financial impacts of wellness programs at thousands of companies for the purpose of developing a formula to measure how much companies are saving on average as a result of implementing wellness programs. 

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Of course, there are many factors that will impact exactly how cost effective a wellness program is at any given company, including level of buy-in and utilization on the part of employees, but the formula developed in order to conduct this analysis and evaluate wellness program ROI focuses on 4 main areas: increase in productivity, savings on health care expenses, savings on talent management costs, and wellness program cost.

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According to the ultimate findings, about 9 out of 10 companies that invest in wellness programs ultimately see a positive return on that investment, which is comparable to the expected ROI on other benefits such as health insurance coverage. Not only can businesses expect direct savings that exceed wellness program costs more than 90% of the time, but about 85% of respondents attribute their investment in wellness initiatives with lowering recruitment expenses and reduced employee absences for sick leave, as well.

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Further, 100% of the HR leadership that were surveyed agreed that there’s a positive link between employee satisfaction and wellness programs, which helps move the needle in the right direction in terms of retention numbers, too. In fact, a separate study indicates that more than 3 out of 4 employees will consider leaving a company that doesn’t prioritize well-being, and more than 8 out of 10 believe well-being to be equally important as salary when weighing job opportunities. 

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As previously noted, however, not all wellness programs are created equal and this analysis indicates that the best approach is a holistically-grounded one that incorporates physical and mental health in a traditional sense, and also supports and prioritizes other core values and feelings that are integral parts of the human experience, including maintaining positive, constructive relationships; engaging actively with both work and life outside work; having a sense of purpose; and feeling appreciated in general as well as for making a contribution though exemplified competence in a role. 

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Of course, when health is involved - especially mental health issues revolving around values and feelings - there can be a great deal of personalization required in order to enable each employee to customize an approach that best suits their needs. Because of the degree of individual tailoring required to optimize the effectiveness of wellness initiatives for as many employees as possible, companies would be well served to provide a wide variety of different offerings in type and commitment-level to allow employees a comfortable entry point from wherever they may be starting their wellness journey.

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Beyond strategizing and developing the holistic wellness program that is ideal for their companies, HR professionals can really drive home the commitment behind the wellness initiative investment through their own lived and advocated support on behalf of employee wellness prioritization. There may be no more effective means for increasing wellness program adoption and utilization than for management and human resources leadership to lead by example, role modeling personal well-being and appropriately balanced work and life interests for employees to emulate. 

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Ultimately, the data makes clear that just about every company that launches and invests in these kinds of wellness initiatives can expect to see a positive return, whether measured in savings on healthcare and recruitment/retention or through gains in increased productivity and reduced absences. 

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You can read more about the ROI for companies on well-being programs here.

The US added 209 thousand jobs last month, which is a positive number despite reflecting a bit of a slow down from the last few months, which averaged about 275 new jobs each. 

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The unemployment rate also dipped back down by a tenth of a point to 3.6% after having made a three-tenths of a point jump up the month prior from the more than 50-year low of 3.4% unemployment that we’ve hit twice already in 2023 in both January and April. 

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As the unemployment rate has been hovering at or above these historic lows for the entire calendar year now, the labor force participation rate has remained constant at 62.6% for the 4th consecutive month, which underscores the stability that the job market has maintained despite the most significant interest rate hikes in 40 years

At the same time, however, while the number of long-term unemployed dropped by more than 80 thousand last month to about 1.1 million, that figure isn’t far off the 1.06 million long-term unemployed registered in February of this year, which further highlights the stability we’ve experienced so far this year.

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Also, the number of people doing part-time work temporarily because full-time work was not available to them increased by 444 thousand people to about 4.1 million this month, but again that figure is essentially on par with the 4.1 million registered in March, so fairly consistent here as well.

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As for the job additions, the largest number of additions were in the government sector, with state governments adding about 27 thousand jobs, while local governments added about 32 thousand.

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The healthcare industry wasn’t far behind, adding about 41 thousand jobs last month, followed by the social assistance and construction industries, which each added about 24 thousand jobs. The professional and business services and leisure and hospitality industries both added about 21 thousand jobs, as well. 

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Despite the net total of more than 200 thousand new jobs added last month across the US as a whole, there were a couple industries that actually saw their ranks shrink - the retail and the transportation and warehousing industries - which lost about 11 thousand jobs and about 7 thousand jobs, respectively.

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Average hourly earnings went up by 12 cents to $33.58, capping a 4.4% increase in total over the last 12 months. For non-supervisory employees in the private sector, wages rose by 11 cents to $28.83, and the average workweek rose by 6 minutes to 34.4 hours. 

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Mployer Advisor’s Take

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The job market is cooler than it was last year, even a little cooler than it was earlier this year, but it is still a very hot job market by historical standards. 

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The intended purpose behind the 10 rate hikes the Fed has issued over the last year and a half has been to equalize supply and demand in the labor market, which has favored labor since the rebound following the initial pandemic slump as a result of huge numbers of retirements and health-related issues that significantly depleted the labor supply. 

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Even against the headwinds that those increased borrowing costs are creating, however, the economy and job market continue barreling ahead, though the resulting drag may be beginning to finally appear. 

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It remains to be seen, of course, whether that drag will ultimately increase and slow hiring to a point where labor supply and demand are more in balance, or whether this month’s data is an underperforming outlier that won’t be indicative of how the trend evolves in the coming months.

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But if historical data is of much use in making forecasts about the movement we’re likely to see in the near term, whether positive or negative, that movement is likely to be relatively small given the consistency and lack of major change that have become the norm of late.

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Eager for more exclusive content? Check out the Mployer Advisor blog here.

Artificial intelligences of one sort or another have been quietly increasing their workloads behind the scenes in a variety of industries for years, but 2023 will likely go down in history as the year that AI finally made the jump from a cutting edge technology to a revolutionary one. 

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While there still seems to be a long way to go before a generalized artificial intelligence that’s capable of seamlessly mirroring human functionality is developed, AI with more specialized uses coupled with processing powers/speeds far beyond human capabilities have already hit the market and are in the process of restructuring operations at companies all over the world.

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The insurance brokerage business is no exception, of course, with AI well-positioned to reshape the industry through the automation of many time-consuming tasks, for one, with significant improvements in efficiency already being reaped by the companies that have been early adopters in the AI space. 

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While much of concern around AI often involves lost jobs and the devaluation of human labor, which are certainly valid fears and can potentially pose significant risks to current business, social, and governmental frameworks (if those systems do not evolve alongside the development of AI in a complementary way), there are of course advantages to be gained for the workers who utilize these emerging technologies beyond the benefits to company bottom lines. For example, insurance brokers who have incorporated AI into their data entry and processing routines have been able to spend more time focusing on establishing and improving relationships with clients. 

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When considering AI and its potential impacts on the workplace, it’s also important to recognize what AI can not do well, which includes strategic thinking and negotiation skills -especially the kinds based on years of real world experience - and the ability to establish relationships that are based on trust and mutual benefit. 

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What AI does do well is provide insurance brokers with data-analysis-based insights, roadmaps for streamlined workflows, and automation for the most mundane necessities of the job, giving brokers more time to do the things that they do best and the things that make them successful in their roles.

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Some specific ways that insurance brokers have been putting artificial intelligence to work to the benefit of their business are via improved customer service platforms and through increased risk management proficiency, which can both lead to a significant competitive advantage, especially over less technologically-forward competitors. 

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In terms of customer service, one of the chief advantages AI is able to provide insurance brokerage offices is the ability to respond faster and more accurately than ever before, which leads to increased customer satisfaction, retention rates, and organic business development. Even more, AI has the power to analyze customer patterns, interactions, and behavior to help brokers know what is most important to them and to better identify customer preferences and needs. 

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On the risk management front, data analysis again gives AI a significant edge when it comes to better assessing and responding to risks. Through processing huge amounts of information and incorporating that data into risk modeling, AI is able to work in a predictive capacity, helping brokers and their clients to identify and minimize threats before they materialize in many cases, including enhanced fraud detection. 

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Despite the clear advantages that AI can provide insurance brokerage businesses, there are still a substantial number of insurance brokers that aren’t currently utilizing this technology on the job. That said, the number of insurance brokers taking advantage of the opportunities AI provides has grown rapidly in just the last few years, with more than 50% of brokerages expanding plans to use AI over the course of the past few years.

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According to a recent survey from PriceWaterhouseCoopers, 86% of respondents consider AI to be ‘mainstream’ technology at this point, which is great in terms of customer comfort and familiarity interacting with this kind of technology especially for customer service support, but it also means the window to obtain a competitive advantage through general AI is shrinking, so there’s no better time than now to start implementing AI into your business processes if you want to gain an edge. Waiting until later just means you'll likely be behind and trying to catch up at that point.

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You can read more about AI in the insurance brokerage space here.