Kansas City, Kan.— It's no surprise that with a looming nursing shortage, obesity at epidemic levels and baby boomers entering their golden years that there isn't any foreseeable end in sight to the rising cost of healthcare. In fact, the 2012 Compensation Data Services survey results reported the average annual cost of insurance per employee on a services employer sponsored PPO plan is $7,414.
Kansas City, Kan.— In 2012, nearly three-quarters of services industry employers experienced increases to their medical insurance premiums, according to the 2012 Compensation Data Services survey results. The average increase reported by these organizations was 9 percent, down from 11.2 percent reported in 2011 and 10.8 percent in 2010. Despite the drop in the average premium increase, services organizations still contribute 8.2 percent of their total payroll costs toward providing medical insurance to their employees. Employers everywhere are looking for ways to curtail rising healthcare costs and as a result, many are turning to wellness programs.
Kansas City, Kan.— As economic conditions continue to slowly improve and companies are once again beginning to hire new employees to rebuild their workforce, employers across the country are looking for ways to attract and retain employees without resorting to hefty pay increases or expensive benefit plans. As a result, some employers have found that adopting a results-only work environment (ROWE) may be the key to creating an attractive work environment for employees.
Kansas City, Kan.— According to the Kaiser Family Foundation, Americans filled more than 3.7 billion prescriptions in 2010. Because the rate at which individuals developing chronic health conditions continues to increase, the expected decline in drug costs comes as little comfort to services industry employers who are largely footing the bill, as an overwhelming majority still offer prescription coverage to employees as a part of their medical plan. These increasing costs translate to higher premiums for employers and employees, as well as increasing co-pays.
Kansas City, Kan.— The Bureau of Labor Statistics recently reported the unemployment rate dropped to just over 8 percent as of April 2012. The unemployment rate continues to dwindle at a slow yet steady rate of decline and pay increase budgets are mirroring this trend by increasing at a tepid rate. The 2012 Compensation Data Services survey results reported pay increase budgets at 2.7 percent, reflecting a slight uptick from 2.4 percent reported in 2011 and 2.2 percent reported in 2010. Pay increase budgets are projected to remain relatively stable in 2013, dipping slightly to 2.6 percent.
The recent volatility in the stock markets has once again shifted employees’ focus to retirement savings plans. While saving for the future is important, employees are questioning which options are the most beneficial. The 2011 Compensation Data Services survey results indicate that more than 72 percent of employees are enrolled in a defined contribution plan, similar to 2010 where that number was 71.4. Less than 1 percent of services employers surveyed reported offering a defined benefit plan only, 70.3 percent offer a defined contribution plan only and more than 27 percent offer both.
With the costs of medical insurance regularly increasing, services organizations look to other means in order to control costs. According to the 2011 Compensation Data Services survey results, the most common of those options is coordination of benefits at almost 80 percent. That number is up slightly from 78.5 percent in 2010. However, the largest increase is the number of reporting employers offering disease management at 57.2 percent in 2011, compared to 54 percent in 2010.
Technology and the economy have changed the recruiting landscape for the services industry. Based on the 2011 Compensation Data Services survey results, more organizations are using cash options as a recruitment tactic in the midst of a struggling economy. From 2010 to 2011, organizations offering a bonus based on length of employment increased from 10.8 percent to 13.5 percent.