The U.S. is living through another shift in the labor market that seems to happen about once in a generation -- like the dramatic increase in working women in the '70s and the rapid growth of the tech sector during the dot-com boom. At present, there's an interplay between a tight labor market and a generational shift in labor market participation.
The unemployment rate, which has been hovering at or below 4% for well over a year, has put a tremendous amount of stress on employers and hiring managers, many of whom have watched as top employees take their skills elsewhere. Employees know they're in demand, and feel more confident about finding new opportunities for a better career fit, flexible work arrangements, shorter commutes and other sought-after benefits. Meanwhile, many baby boomers have already left the workforce and the rest are likely to fully or partially retire within 10 years. And as younger millennials launch their careers, their numbers intensify the cultural shift in expectations for work and employer relationships.
Under these conditions, resisting the urge to chase quick wins can pay off for employers -- if their long game is focused on culture. Compensation and benefit packages are easily matched or exceeded by competitors. When organizations center their talent attraction and retention efforts on cultivating a better work environment and experience, they're investing in a more sustainable and profitable approach.
So how do you build a better workplace? First and foremost, there's a need to center on the full spectrum of organizational well-being by strategically investing in employees' health, talent, financial security and career growth. And developing benefit and human resource (HR) programs at the right cost structure to support a multigenerational workforce.
This was confirmed by Gallagher's recent study of over 4,000 U.S. employers. Our Best-in-Class Benchmarking Analysis identified the statistically significant patterns, best practices and philosophies common among organizations that most effectively manage their health care costs and people.
Best practices that emerged from the analysis include:
• Deliberately planning compensation and benefit strategies to align with organizational objectives: Through more regular use of strategic, long-term total compensation planning, employee preference surveys and competitive benchmarking, best-in-class organizations maintain a strong workforce proactively centered on business growth.
• Supporting career growth to drive engagement: Elevating engagement is critical for business success. To strengthen and maintain engagement, top performers use several tactics that support employees' career growth and boost their satisfaction, most often managerial processes for communicating clear performance goals, giving constructive feedback and addressing development needs. And these employers also convey to employees how their work performance has a positive impact on the organization's strategy, mission, vision and values.
• Investing in comprehensive well-being programs: Best-in-class employers share two core beliefs about holistic well-being: it's a top organizational priority, and it helps boost employees' health, work experience and productivity. They understand how their investments link to improved attraction and retention, and consider becoming or remaining an employer of choice one of the top reasons for this commitment.
• Having a comprehensive communication strategy: Without an integrated employee communication strategy to activate success, core HR and other organizational strategies often fall short of their potential. Effective communications are the connection point for employees to better access, understanding and use of their benefits, programs and support tools.
■ Bill Ziebell is CEO of the HR & Benefits Consulting division of Gallagher.