By Emily Kestel, Fearless editor
Call it what you want – a “labor shortage” or a “reassessment of work in America” – but companies are finding that in order to attract and retain current employees throughout the Great Resignation, they’re going to have to expand their benefits offerings.
Many employers are planning to increase paid family and medical leave offerings, health care benefits, and child care support, according to the latest Principal Financial Well-Being Index.
The index is a quarterly, nationwide survey of business owners and top decision-makers at companies with two to 10,000 employees. The most recent index was conducted in June and surveyed 501 business leaders of for-profit companies that offer health insurance and/or retirement benefits.
What’s at stake
So far this year, more than 34 million Americans have quit their jobs. Labor experts say there’s no single factor driving the workforce behavior, but many point to burnout, low wages, the continuing child care crisis and lack of support as culprits.
One recent survey found that a quarter of U.S. workers are considering a job change or retirement in the next 12 to 18 months, citing motives like increased pay, feeling undervalued in their current role, career advancement, more workplace benefits and hybrid work arrangements.
The latest Palmer Group annual salary guide showed that 94% of respondents indicated that they plan to increase employee pay in 2022. But as Palmer Group President Dave Leto explained, while salaries are important, more companies are looking toward new and creative ways to attract and retain talent.
“I think companies are really trying to figure out where they need to be to stay competitive, and to make their employees feel valued through these tough times,” Leto said. “There’s less people out there. Demand has never been stronger in my 20-plus years in the industry. If you lose an employee, it’s harder to get back what you had, so companies are really focusing on how do I keep my folks.”
What the Well-Being Index findings show
“I’ve watched these Well-Being Index results come in for years, and I would say this one is pretty interesting,” Amy Friedrich, president of U.S. Insurance Solutions at Principal Financial Group, said.
The survey found that the vast majority – 84% – of businesses feel comfortable with their cash flow.
“That’s good news because then they can consider investing in their people …,” Friedrich said. “The piece I’m less excited about is when you begin to deconstruct that … if you’re a male business owner, 41% of you are responding [that you’re comfortable with the cash flow], and if you were a female business owner, that goes down to 27%.”
Friedrich said that disparity may be due to different standards of comfort level.
“I think women have seen more in the last two years of things that feel very impactful for their families’ financial situation. They’ve seen more things that are troubling and worrisome for them, and so their ability to express a sentiment that’s ‘very comfortable’ is different than the men,” she said.
In this particular survey, Principal asked about benefits that companies have in place, and then asked why. Since its launch in 2012, the first time the survey included a question about caregiving benefits was in June 2020 as a result of the pandemic, according to a Principal spokesperson.
They found that one-fifth of businesses increased child care support and caregiving benefits, and concluded that female-led businesses are more likely to have added caregiving benefits for reasons such as improving employee experience or out of a sense of responsibility. Male-led businesses are more likely to have added the same benefits for reasons to attract new employees.
Caregiving benefits include child care, elder care and employee assistance programs, Friedrich explained. Those could look like allowances, subsidies or providing access to resources.
While it’s great that in the end, both men and women are offering caregiving benefits, the reasons why are interesting, Friedrich said.
“[For women], I’m seeing more attribution back to ethical and personal responsibility reasons: ‘I did it in response to what I saw,’ or ‘I did it basically because I think it’s going to create a better employee experience.’ … Male responses tend to be focused a little bit more on ‘I did it to attract or retain,’” she said.
In the latest Business Record Leaders Survey, 15% of respondents agreed that businesses and organizations have a responsibility to pay for their employees’ child care costs. Fifty-five percent disagreed and 29% said they weren’t sure.
- “Child care assistance is a great benefit for businesses who can offer it, and will likely lure people away from other businesses. It is a great recruiting tool, but not necessarily a responsibility.” – Jessica Dunker, President and CEO, Iowa Restaurant Association
- “Businesses and organizations have a responsibility to pay their employees fairly. Those employees who choose to have children should be financially able to cover child care costs.” – Michelle Book, CEO, Food Bank of Iowa
- “It is both economically prudent, and ethically responsible, to ensure the evolving needs that people carry with them into the workplace are addressed. Not only is the child care crisis affecting workplace productivity with an increase in unplanned absenteeism, the data today is very clear the caregiving issue disproportionately impacts women – creating a cumulative and long lasting impact related to the gender wage gap, promotability, special projects and travel opportunities, and a gender wealth accumulation gap into retirement. A commitment to gender equality must equal a commitment to addressing barriers that limit equal opportunities.” – Beth Shelton, CEO, Girl Scouts of Greater Iowa
- “Businesses are not responsible for the personal decisions made by their employees. Paying for child care creates an unfair compensation situation when some employees don’t have child care expenses.” – Daniel McCraine, President, McCraine Associates, Inc.
- “Not directly. Employers need to offer meaningful wages and opportunities that make the equation clear that working covers the tradeoff of sending kids to child care. Then employers need to be flexible with schedules whenever possible to respond to the demands of raising children.” – Tony Dickinson, Finance Company President, NCMIC
Caregiving benefits, especially child care, are something that Cassie Sampson, owner of East Village Spa, wants to offer her employees. But she can’t right now for several reasons.
“I would love to be able to add benefits because child care is one of the biggest challenges,” she said. “While I would like to add assistance, a big part of our challenge is availability of child care for the hours my employees want to work. … I would love to offer it if there was a way for me to subsidize child care or even subsidize sitters for evenings and weekend hours.”
Another reason why East Village Spa isn’t able to offer more benefits is that a lot of the money goes directly toward compensation, Sampson said.
“We pay really well for our industry. Our full time starts at 30 hours a week. We have very few employees that work 40 hours a week and they’re earning a living of somebody that works 40 hours a week.”
For now, flexibility in work schedules and a comprehensive health care plan are core tenets of the benefit offerings to the employees at East Village Spa.
The health care plan offered at the spa covers mental health and therapy services and gender affirming care in addition to the medical and dental plan, Sampson said.
Flexible scheduling and opportunities for shorter days or weeks are something that employees feel is more important and more valued now, she added. That helps mitigate experiences of burnout and stress – something hospitality and service workers are more prone to.
“Scheduling has been the biggest way we’ve been accommodating to employees,” Sampson said. “We’ll change schedules as needed because child care changes in an instant.”
As businesses across the state and country continue the process of reopening, leaders in the private and public sectors have made one thing clear: The economy won’t fully recover unless women can fully participate.
Friedrich said that throughout the pandemic, women have been dealing with competing priorities: Either they leave the workforce in order to stay home and provide care to their kids or elderly loved ones, or they stay in the workforce to continue working at a job they love.
“Women are in as unusual a position as I’ve seen in terms of losing some of the gains they’ve made in the last few decades. Some of that is definitely feeling like it’s a choice … and some of it is that they don’t have the infrastructure or opportunity to make that work.”
Dawn Oliver Wiand, executive director of the Iowa Women’s Foundation, said earlier this year that in order to address the workforce shortage, we have to figure out how to get more women back to work. “We can do that with family-friendly policies, quality, affordable child care, and work flexibility. It’s going to be essential if we want our businesses and our state to be able to recover and continue to grow.”
Editor’s note: This article has been updated to correct an error. The first time Principal asked a question about caregiving benefits was in June 2020 as a response to the COVID-19 pandemic, not June 2021.