8 Tips for Modernizing Hiring in 2024
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
As talent acquisition continues to evolve, staying ahead of the curve is crucial for organizations aiming to attract and retain top-tier talent. Last year highlighted labor shortages, looming retirements and a demand for evolving skills. As 2024 begins, the traditional hiring approaches are being reshaped by technology, remote work dynamics and shifting employee expectations.
This article explores strategies for employers to modernize their hiring practices in 2024.
Navigating the Future of Hiring
Modernizing hiring practices enhances an organization’s ability to attract, recruit and retain top talent in a competitive environment. As job seeker’s expectations shift and many leverage technology to find their next job, employers can consider these eight tips for modernizing their hiring process this year:
- Evaluate diversity, equity, inclusion and belonging (DEIB). DEIB programs are increasingly shifting to support the acceptance of individuals and focus on fostering a sense of belonging in the workplace. A diverse and inclusive hiring strategy—and overall employer brand—can help attract candidates. To be impactful, DEIB has to be a part of an organization’s foundation, including hiring practices—not just initiatives or programs.
- Emphasize skills over educational degrees. Skills-based hiring isn’t just an aspirational idea; some employers are already taking note and prioritizing finding the right fit for open positions based on skills rather than education or experience. Organizations can take time to review which positions have a legitimate need for a four-year degree or certification and which ones need the appropriate skills. This hiring practice can help expand the talent pool, improve workplace diversity and decrease hiring time.
- Embrace artificial intelligence (AI). Employers can leverage the power of AI to streamline their hiring process. AI-driven tools can analyze resumes, assess candidate fit and even conduct initial interviews. By automating routine tasks, HR professionals can focus on strategic aspects of recruitment, fostering a more efficient and insightful hiring process. AI can also help personalize candidate engagement by sending tailored messages and recommended or relevant job openings. While AI has its advantages, it’s also important to be aware of the technology’s risks and dangers (e.g., bias and discrimination).
- Leverage data-driven decision-making. Employers can harness the power of people analytics to inform their hiring decisions. Analyze recruitment data to identify trends, optimize sourcing strategies and enhance the candidate experience. By leveraging data-driven insights, hiring teams can make informed decisions that better contribute to the overall success of their hiring efforts.
- Incorporate gamification into skills assessment processes. Gamified assessments provide a more engaging and interactive experience for candidates, allowing hiring teams to assess candidate skills in a dynamic and real-world context. This can enhance the evaluation process and showcase the organization as forward-thinking and innovative.
- Enhance the candidate experience with technology. Technology can help streamline communication, provide timely feedback and offer transparency throughout the hiring process. A positive candidate experience not only attracts top talent but also enhances the employer brand, creating a ripple effect in the talent market.
- Leverage the right online portals. Virtual recruiting can help employers find the applicants they’re looking for. Furthermore, online platforms—such as LinkedIn, Indeed, Handshake and more—can make it easy for applicants to apply directly.
- Offer incentives with employee referral programs. Employers can empower their current employees to become brand ambassadors. Millennial and Generation Z candidates generally trust and value word-of-mouth referrals, whether for employment or shopping, so employers could amp up referral efforts to attract this demographic. Employee referral program incentives aren’t new, but they can be modernized to appeal to millennial and Generation Z candidates. As such, employers may consider offering monetary bonuses, paid time off, learning and development opportunities (e.g., covering the cost of attending a conference or training), or charity donations that may motivate younger workers.
While maybe not applicable to every open role, these strategies can give employers new tools to revamp their hiring processes. It comes down to building a competitive advantage to stand out to job candidates.
Summary
As the digital age progresses, staying ahead of the latest HR trends and technologies is imperative for modernizing the hiring process. By embracing AI and other technologies, prioritizing DEIB and leveraging data-driven insights, employers can attract top talent in 2024 and build a future-ready workforce.
Contact us today for more workplace guidance.
- Published in Blog
U.S. Justice Dept. Offers Guidance for Delayed Reporting Under SEC Cyber Rules
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
With the Dec. 18 effective date of the U.S. Securities and Exchange Commission’s (SEC) cyber incident reporting rules looming, federal officials have offered guidance on when it may approve delays in the interest of national security.
The SEC cyber rules, adopted this past July, give publicly traded companies four days to disclose the occurrence of a “material” cyber event via regulatory filing. The U.S. Department of Justice and the FBI gave examples of scenarios that may warrant delay.
“The primary inquiry for the Department is whether the public disclosure of a cybersecurity incident threatens public safety or national security, not whether the incident itself poses a substantial risk to public safety and national security,” stated the Justice Department. “While cybersecurity incidents themselves frequently threaten public safety and national security, the disclosure to the public that those incidents have occurred poses threats less often.”
These “limited circumstances” would apply to cases in which a company “reasonably” suspects the event occurred because of a tactic with no known mitigation—for example, an as-yet-unpatched software vulnerability.
Another example given included impacts to events impacting systems containing sensitive government information.
“This category includes systems operated or maintained for the government as well as systems not specifically operated or maintained for the government that contains information the government would view as sensitive, such as that regarding national defense or research and development performed pursuant to government contracts,” said the Department. It also highlighted events involving public companies performing remediation efforts for critical infrastructure or critical systems.
The FBI “strongly” encouraged companies to quickly contact federal officials as soon as they determine an event could threaten national security or public safety.
“This early outreach allows the FBI to familiarize itself with the facts and circumstances of an incident before the company makes a materiality determination,” said the agency. “If the victim of a cyber intrusion engages with the FBI or another U.S. government agency, this engagement doesn’t trigger a determination of materiality. However, it could assist with the FBI’s review if the company determines that a cyber incident is material and seeks a disclosure delay.”
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2024 General Liability Insurance – Market Outlook
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Rising claim frequency and severity have generated hardening conditions across the general liability insurance segment in recent years, prompting ongoing rate increases, stringent underwriting standards and limited capacity. Fortunately, insurance carriers experienced slightly better underwriting results in 2022-23, paving the way for rate moderation. Nonetheless, several concerning trends across the segment—including rising litigation concerns, increasing medical expenses, and heightened risks related to per- and polyfluoroalkyl substances (PFAS)—still have the potential to threaten claim costs and negatively impact overall market performance. As such, policyholders can anticipate another year of modest premium increases in 2024. Additionally, insureds who operate in sectors with elevated liability risks may be vulnerable to larger rate hikes and face difficulties obtaining higher coverage limits.
Developments and Trends to Watch
- Litigation concerns—As social inflation drives up the frequency and severity of insurance claims, businesses face a growing number of lawsuits following liability incidents (actual or alleged) and, in turn, greater penalties from such legal action. One of the main factors influencing social inflation issues in the liability market is the rise in nuclear verdicts (jury awards exceeding $10 million). According to independent public relations firm Marathon Strategies, the five years leading up to the COVID-19 pandemic saw the total sum of nuclear verdicts increase by 178%. Although these awards decreased in 2020 due to pandemic-related court closures, they skyrocketed in the following years; the average nuclear verdict nearly doubled from $21.5 million in 2020 to $41.1 million in 2022. Altogether, litigation shifts and social inflation issues have largely contributed to elevated general liability insurance claim costs, increasing the risk of coverage gaps and out-of-pocket expenses.
- Increased medical expenses—Coverage for medical costs stemming from third-party injuries is a critical component of general liability insurance. Consequently, surging medical expenses have compounded claim costs in the segment throughout the past few decades, with no end in sight. According to the U.S. Bureau of Labor Statistics (BLS), the total value of medical care has jumped by 115.1% since 2000. However, it’s worth noting that inflation among overall goods and services began exceeding medical inflation in 2023, evidenced by monthly consumer and producer price index data from the BLS. This is a rare occurrence, as medical care and health spending generally outpace growth across the rest of the economy. Regardless, surging medical expenses will likely continue playing a role in elevated general liability insurance claim costs going forward.
- PFAS exposures—PFAS consist of a large grouping of chemicals that have been widely manufactured and utilized within different products and packaging across the United States since the 1940s. Over the past few years, PFAS have been the subject of increased regulatory scrutiny stemming from emerging developments regarding the health and safety of these substances. Although some types of PFAS have faced regulatory action in the past, the federal government recently implemented multiple efforts to limit overall PFAS usage and exposure in the coming years and beyond. Apart from federal legislation, 15 states currently have PFAS-related restrictions in place, while New York and New Jersey have already listed these chemicals as hazardous substances in their regulatory regimes. This legislation has contributed to a rise in litigation against businesses that are found responsible for causing PFAS exposure and related ailments via their products and packaging. As regulatory pressures and litigation concerns related to these chemicals press on, businesses that leverage PFAS may experience elevated liability exposures. Further, businesses facing PFAS-related incidents could be more susceptible to coverage exclusions and substantial out-of-pocket losses.
Tips for Insurance Buyers
- Educate yourself on key market changes affecting your rates and how to respond using loss control measures.
- Ensure your establishment has measures in place to reduce the likelihood of customer or visitor injuries.
- Create workplace policies and procedures aimed at minimizing PFAS exposures. Consult legal counsel to ensure compliance with applicable PFAS legislation.
- Examine your general liability coverage with trusted insurance professionals to ensure your policy limits match your insurance needs.
- Published in Blog
What Is an Out-of-Pocket Maximum?
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
An “out-of-pocket maximum” is a common health insurance term that you may not fully understand. Your out-of-pocket maximum can provide financial protection in years when you need a lot of treatment by capping the total amount you spend on medical expenses. Understanding your out-of-pocket maximum can significantly impact your financial planning and ability to manage medical expenses. This article provides an overview of out-of-pocket maximums.
Overview of Out-of-Pocket Maximums
Your out-of-pocket maximum is the maximum amount of money you must pay for covered health care services during a specific period, typically a year. Once you’ve reached your out-of-pocket maximum, the insurance plan will typically cover 100% of your covered, in-network health care costs for the rest of the year. At the end of your policy year, your out-of-pocket maximum will typically reset.
Understanding how your out-of-pocket maximum works in practice can help you be aware of how it will impact your finances. For example, imagine that your health insurance plan has an out-of-pocket maximum of $6,000 per year, a $1,000 deductible and a 20% coinsurance. In this scenario, you will pay your $1,000 deductible upfront when you use your plan and an additional 20% of all covered medical expenses afterward. Your insurance company will pay the remaining 80% of covered medical expenses as you continue to incur medical costs for the year. Your medical spending will accumulate until you reach your out-of-pocket maximum of $6,000. Once you reach this limit, your insurance company will typically pay for 100% of your covered health care costs for the rest of the year.
Expenses That Count Toward Your Out-of-Pocket Maximum
The exact details regarding expenses that count toward your out-of-pocket maximum may vary with your health care plan, so it’s important to read the fine print. Your out-of-pocket maximum will typically include various expenses incurred during the policy year, such as deductibles, copayments and coinsurance. However, some plans don’t count all of your copayments, deductibles, coinsurance or other expenses toward this limit. Additionally, your monthly premiums and out-of-network expenses won’t usually count toward your out-of-pocket maximum.
Selecting an Out-of-Pocket Maximum
You can typically choose from various health care plans with different out-of-pocket limits. You should keep in mind that plans with lower out-of-pocket maximums usually have higher premiums. Conversely, health care plans with higher out-of-pocket maximums generally have lower premiums. However, some employers only offer one option. If this is the case, it’s important that you note what your out-of-pocket maximum is. You may be eligible for lower out-of-pocket maximums if you earn under certain income thresholds or meet other requirements.
Conclusion
Your out-of-pocket maximum is essential for managing health care costs and providing peace of mind in times of medical need. It allows you to anticipate and allocate funds for your health care expenses and can help you avoid catastrophic health care bills that could otherwise lead to financial hardship.
Contact your employer if you have further questions regarding your health insurance.
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Report Reveals Employers Plan to Offer Compelling Benefits Options in 2024
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Recent findings from Mercer’s Health and Benefits Strategies for 2024 Survey Report revealed that employers are seeking compelling benefits options to improve affordability, increase flexibility and fill perceived gaps in 2024. According to Mercer, 1 in 4 of more than 700 surveyed employers had made enhancements to their benefits programs in the past two years. Additionally, over two-thirds said they will be incorporating benefits improvements into their plans for the upcoming plan year to support attraction and retention and better meet employee needs.
Survey Results
Employers anticipate a significant increase in health care costs in 2024, with a projected increase of 7% over 2023. This is expected to challenge many organizations as they struggle to balance benefits options with cost-controlling measures. However, Mercer’s research reveals that the majority of employers are planning to enhance benefits to remain competitive in the labor market.
Chief among these enhanced benefit options are benefits that support women’s health, including preconception planning and menopause. According to Mercer, 46% of employers plan to offer benefits or resources to support women’s reproductive health, up from 37% last year. Additionally, the percentage of employers planning to offer menopause support has more than tripled since last year’s survey.
In 2024, employers are planning to add value to their benefits programs by increasing employee flexibility. Mercer found that 27% of employers offer unlimited paid time off to at least some employees, up from 22% of large employers in 2021. Paid-time-off policies are also becoming more inclusive, with growth in paid parental leave for all kinds of families. Other popular options employers are adopting to support employee flexibility and work-life balance include hybrid work options (80%), paid time off to volunteer (49%), remote work options (47%), a four-day workweek or consolidated schedule (22%), unpaid sabbaticals (17%), paid sabbaticals (8%), and time off to pay for an ill or newly adopted pet (3%).
Affordability is top of mind for employers as many employees struggle with inflationary pressures. As such, most surveyed employers are adopting strategies to slow health cost growth without shifting costs to employees. Common strategies for this include implementing programs to help employees manage specific health conditions, taking action to address the cost of specialty prescription drugs, focusing on virtual care, and steering employees toward quality care with a navigation or advocacy service.
Employer Takeaways
Offering competitive benefits can improve employee attraction, retention, wellness and morale. However, employers must evaluate their organization’s unique needs and decide whether to eliminate, share or absorb the increasing cost of benefits for the coming year.
Contact us today for more information.
- Published in Blog
NLRB Delays Joint Employer Rule Effective Date to February
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
On Nov. 16, 2023, the National Labor Relations Board (NLRB) announced it would push the effective date of the new joint-employer rule to Feb. 26, 2024. The final rule was published in the Federal Register on Oct. 27, 2023, and was initially set to become effective on Dec. 26, 2023. However, the agency has delayed the effective date by two months to facilitate the resolution of legal challenges regarding the new rule. Notice of the extension will be published in the Federal Register.
The New Joint-employer Standard
The 2023 joint-employer standard establishes new criteria for determining joint-employer status as applied to labor issues related to the National Labor Relations Act. It will rescind the existing 2020 joint-employer standard and replace it with a more inclusive law, making it easier for employers to be classified as joint employers. Notable changes to the joint-employer standard include the following:
- Clarification of the definition of “essential terms and conditions of employment”
- Identification of the types of control that are necessary to establish joint-employer status and the types that are irrelevant to the joint-employer inquiry
- Description of the bargaining obligations of joint employers
Legal Challenges
On Nov. 9, 2023, a coalition of businesses sued the NLRB in federal district court, alleging the new joint-employer rule is unlawful, overly broad and contradictory to the common-law definition that limits joint employment to relationships of actual and substantial control of working conditions. The lawsuit further alleges that the NLRB is acting arbitrarily and capriciously in violation of the Administrative Procedure Act. The group of businesses suing the NLRB includes the U.S. Chamber of Commerce, the National Retail Federation, the International Franchise Association, the American Hotel and Lodging Association, Associated Builders and Contractors, Associated General Contractors of America, and the National Association of Convenience Stores. Additionally, Senators Bill Cassidy and Joe Manchin announced they would introduce a Congressional Review Act resolution to overturn the rule.
Conclusion
The new joint-employer standard will only be applied to cases filed after the rule becomes effective on Feb. 26, 2024. Employers can prepare for the new rule by familiarizing themselves with the new standard and determining whether a more inclusive joint-employer standard will reclassify them as joint employers by the amended effective date.
We’ll keep you apprised of any notable updates.
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Common Social Engineering Tactics to Watch For
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Social engineering refers to a cyberattack method in which a cybercriminal preys on key human behaviors (e.g., trust of authority, fear of conflict and promise of rewards) to obtain unwarranted access to targets’ technology, systems, funds or data. These attacks can be deployed through various tactics, such as digital impersonation, deceitful messages or malicious software (known as malware). Social engineering attacks have become a significant threat to businesses of all sizes and sectors; after all, anyone can be targeted in these incidents—including entry-level workers, managers and CEOs.
With this in mind, it’s crucial for businesses to be aware of frequently utilized social engineering methods and adopt effective cybersecurity measures to help mitigate these incidents. This article outlines common social engineering tactics to watch for and offers associated prevention and response tips.
Common Social Engineering Techniques
In a social engineering attack, a cybercriminal implements a number of manipulative tactics to lure their target into performing actions that they normally wouldn’t. Some common social engineering methods include the following:
- Phishing—This technique involves cybercriminals leveraging fraudulent emails to trick recipients into providing sensitive information, clicking malicious links or opening harmful attachments. In order to make their emails appear genuine, cybercriminals will often impersonate trusted sources (e.g., a co-worker or well-known organization) and feign a sense of urgency to rush targets into acting. In addition to traditional phishing, cybercriminals may also attempt to manipulate targets over text messages or phone calls (known as smishing and vishing, respectively).
- Spear phishing—A spear-phishing scheme typically focuses on specific individuals or companies and uses personalized information to convince targets to share their data. In these instances, cybercriminals will research targets’ online behaviors, such as where they shop or what they share on social media, to collect personal details that make their schemes seem more legitimate.
- Business email compromise (BEC)—Such a technique refers to cybercriminals posing as business leaders or partners (e.g., executives, senior-level employees, vendors or suppliers), often for financial gain. Cybercriminals generally deploy BEC scams via email by creating fake accounts for business leaders or partners and using deceiving messages to trick targets into transferring money, divulging financial data or changing banking details.
- Baiting and quid pro quo—Through this strategy, cybercriminals make false promises to persuade targets to share data or download malware. These false promises may appear in the form of fraudulent pop-up advertisements or deceitful online promotions. For example, a cybercriminal may use a false advertisement for a free movie download to trick their target into installing a virus on their device. Similar to baiting, quid pro quo incidents involve cybercriminals promising to provide something valuable to their targets (e.g., an e-commerce coupon code or discounted security software) but only in exchange for the targets’ sensitive information (e.g., contact details, bank account numbers or login credentials).
- Pretexting—This technique consists of cybercriminals impersonating a co-worker, community leader or authority figure (e.g., a police officer, government employee, banker or tax official) and asking targets to provide sensitive information to confirm their identities or help complete critical tasks and assignments. Some of the most common types of data stolen amid pretexting incidents include employees’ contact details and Social Security numbers, company bank records and workplace security information.
- Tailgating—Through this tactic, cybercriminals physically sneak into workplaces by following closely behind employees or other credentialed individuals (e.g., custodians or building maintenance workers) without their knowledge. That is, after these authorized individuals leverage their key fobs or identification badges to pass through locked doors or security checkpoints, the cybercriminals will also slide inside before the locks can reengage. From there, the cybercriminals may leverage their on-site access to steal essential company records, infect important technology with viruses or malware and compromise security systems to allow continued workplace infiltration.
- Scareware—This method entails cybercriminals utilizing various scare tactics to frighten and manipulate targets into paying ransoms, often through seemingly legitimate prompts (e.g., fraudulent virus infection alerts urging targets to purchase security software for their devices or deceptive messages claiming to be from law enforcement that accuse targets of committing crimes and demand payment for any associated fines). Scareware may either initially contain malware or eventually coerce targets into downloading malware.
Tips to Mitigate Social Engineering Attacks
Businesses can consider these steps to help prevent and respond to social engineering attacks:
- Provide training. Businesses should educate employees on social engineering and how it could affect them. Additionally, employees should be required to participate in routine cybersecurity training on social engineering attack detection and prevention. This training should instruct employees to do the following:
- Maintain a healthy sense of skepticism across communication channels by watching for social engineering tactics in emails, texts and calls (e.g., lack of personalization, generic phrasing and urgent requests).
- Refrain from interacting with emails, texts or calls from unknown or suspicious senders.
- Avoid clicking links or downloading applications provided within emails or texts.
- Never share sensitive information online, via text or over the phone.
- Utilize trusted contact methods (e.g., calling a company’s official phone number) to verify the validity of any suspicious requests.
- Report any suspicious emails, texts or calls to the appropriate parties, such as a supervisor or the IT department.
- Implement access controls. By allowing employees access to only the information they need to complete their job duties, businesses can reduce the risk of cybercriminals compromising excess data or securing unsolicited funds amid social engineering incidents. To further protect their information, businesses should consider leveraging encryption services and establishing secure locations for backing up critical data.
- Utilize proper security software. Businesses should make sure all workplace technology is equipped with adequate security software. In some cases, this software can halt cybercriminals in their tracks, stopping fraudulent messages from reaching recipients’ devices and rendering harmful links or malicious applications ineffective. In particular, workplace technology should possess antivirus programs, spam detection systems, email filters, firewalls, message-blocking tools and multifactor authentication capabilities. This security software should be updated as needed through patch management systems to ensure its effectiveness.
- Ensure safe financial transactions. Having secure financial procedures can help limit the risk of any money being lost during social engineering attacks. As such, businesses should instruct employees who handle financial operations to carefully analyze fund transfer requests and similar payment demands to ensure their validity. When possible, these requests should be discussed in person before moving forward, especially if they involve alternative payment procedures or changes in banking details. Businesses may also want to consider utilizing several verification methods and implementing the “two-person rule” to confirm payment requests, in which two authorized individuals must review and approve transactions before they can go through.
- Adopt a cyber incident response plan. In the event that a social engineering attack is suspected or detected, it’s essential for businesses to have dedicated cyber incident response plans in place that outline steps to ensure timely remediation and keep damages to a minimum. These response plans should address a variety of possible attack scenarios and be communicated to all applicable parties. Both the Cybersecurity & Infrastructure Security Agency (CISA) and the National Institute of Standards and Technology (NIST) have resources available to help businesses create such plans.
- Conduct tabletop exercises and penetration testing. It’s not enough for businesses to simply create cyber incident response plans. Rather, they should routinely assess these plans for ongoing security gaps and make changes as needed to ensure maximum protection amid social engineering attacks. Common assessment techniques include the following:
- Penetration testing—Such testing consists of an IT professional mimicking the actions of a cybercriminal to determine whether an organization’s workplace technology possesses any vulnerabilities and is able to withstand attack efforts. This testing usually targets a specific type of workplace technology and may leverage various attack vectors.
- Tabletop exercises—A tabletop exercise is an activity that allows an organization to simulate a realistic cyberattack scenario (e.g., a phishing simulation) for the purpose of testing its incident response plan’s efficiency. In other words, this exercise serves as a cyberattack drill, giving participants the opportunity to practice responding to an attack.
- Consult trusted experts and professionals. Businesses don’t have to navigate and address their social engineering exposures alone. Instead, they can seek assistance and supplement their existing resources with guidance from a wide range of trusted external parties, including insurance professionals, legal counsel, cybersecurity firms, law enforcement and government agencies (e.g., CISA and NIST).
- Purchase sufficient coverage. It’s critical for businesses to purchase adequate insurance to secure ample financial protection against potential losses that may arise from social engineering attacks. Businesses should consult trusted insurance professionals to discuss their specific coverage needs.
Conclusion
Social engineering is a common and widespread cyberthreat that has the potential to wreak havoc on businesses across industry lines. Fortunately, organizations that ensure a solid understanding of key social engineering methods and leverage proper prevention and response measures can help minimize these incidents and their related losses.
Contact us today for more risk management guidance and insurance solutions.
- Published in Blog
4 Key Trends Driving Employer Health Care Costs in 2024
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Amid ongoing inflation pressures, employees and employers alike can expect their health care costs to increase in 2024. Global professional services firm Aon reported that health care costs for employers will grow by 8.5% in 2024 (to more than $15,000 per employee), nearly double 2023’s figure. In line with those findings, the Business Group on Health’s 2024 Large Employer Health Care Strategy Survey predicts a 6% increase in health care costs in 2024.
All signs point to health care costs continuing to rise in 2024. This article outlines the primary drivers of health care costs and ways that employers plan to manage them.
Mental Health Challenges
Employees’ mental health concerns and needs, such as depression, anxiety and substance use disorder, undoubtedly rose during the COVID-19 pandemic and continue to linger amid its aftermath.
Consider the following findings from the Business Group on Health’s survey:
- Three-quarters of employers (77%) reported an increase in mental health concerns among employees in the aftermath of the pandemic, compared to 44% in 2023.
- Nearly one-fifth of employers (16%) anticipate an increase in mental health concerns in the future.
Employees and employers alike will continue to notice a prolonged impact of mental health challenges. In response, employers are expected to continue to expand access to mental health support and services, and many plan to provide more options for support and reduce cost barriers to care. Organizations may also explore manager and employee training to recognize mental health issues, anti-stigma campaigns and flexible working arrangements so employees can discreetly seek mental health care during regular working hours.
Pharmacy Costs
In 2024, pharmacy costs will continue to impact employers significantly. In addition to high-cost drugs, relationships with pharmacy benefits managers (PBMs) are also a key concern for employers.
The Business Group on Health’s survey revealed the following about prescription drugs and pharmacy costs:
- Employers experienced an increase in the median percentage of health care dollars spent on pharmacy, from 21% in 2021 to 24% in 2022.
- Most (92%) employers were concerned or very concerned about high-cost drugs in the pipeline, and 91% were concerned or very concerned about the pharmacy cost trend overall.
- Nearly three-quarters (73%) of employers say finding more transparency in PBM pricing and contracting is a priority, and 58% say they want to see additional reporting and better provider quality measurement standings.
To address rising drug costs, employers may implement pharmacy management strategies. These could include prioritizing transparent PBM practices (e.g., requesting detailed reports, auditing PBM services, requiring compensation and pricing disclosures and negotiating contract terms) and plan design changes to address costly medications and treatments (e.g., prior authorization, step therapy and sites of care management).
Cancer Treatment
Preventive screenings were a critical health care component disrupted during the pandemic, according to the Business Group on Health. As a result, employers are anticipating more late-stage cancers among workers.
Consider the following survey results from the Business Group on Health:
- Fifty percent of employers report cancer is the number one driver of health care costs, and 86% say it’s among their top three drivers.
- Half of employers (53%) will offer a cancer-focused center of excellence approach in 2024, with an additional 23% considering this strategy by 2026.
In response to rising cancer care, employees may encourage advanced screening measures and maintain full coverage of recommended prevention and screening services. Employers are also monitoring oncology clinical advancements (e.g., biomarker testing and immunotherapies) and helping guide employees to high-quality care to improve health outcomes.
Health Care Delivery
Health care innovations, specifically on-site or near-site clinics and virtual care, gained popularity during the pandemic, and demand is starting to level out. However, such types of care continue to be critical for employees as they prioritize primary or preventive health care.
The survey by Business Group on Health discovered the following views about health care delivery:
- Fewer employers thought virtual care would significantly impact health care delivery in 2023 (64%), compared with 2021 findings (85%). Regardless, 2023’s figure is still relatively high and above pre-pandemic survey results.
- Employers’ number two priority for 2024 is implementing more virtual health opportunities. In addition to expanding, they’ll evaluate partnerships and consider vendors that can integrate with others.
- Roughly half of employers (53%) offered on-site clinics in 2023, and the same figure is expected to do so in 2024, which likely signals a plateau in the offering. Some employers have migrated to a hybrid or remote work environment, reducing the need for health services at the workplace.
It’s no surprise that the necessity of virtual health care peaked during the pandemic. Moving forward, more employers are looking to expand health care offerings to better support primary care and mental health. It comes down to prioritizing employee health outcomes.
Summary
Heightened health care costs are likely to continue impacting employers for the foreseeable future. Looking ahead to 2024, many employers are focusing on impacts related to mental health, medications, cancer and health care delivery. To combat rising costs, employers are focusing on improving employee health outcomes, reducing unnecessary services and prioritizing prevention and primary care.
Additionally, it may be advantageous for employers to focus on benefits education and employee communication. The goal is to help them understand their benefits and the best ways to utilize and maximize them. Many employees are looking for ways to stretch their hard-earned dollars further, and employers can step in to provide that much-needed guidance. In turn, employer efforts focused on preventive and proactive health care can help curb health care costs.
Contact us for more employer-sponsored health care resources.
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Winter Attraction and Retention Tips
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
While some industries are busy due to holiday shopping and seasonal employment, recruiting often slows during the winter months—especially after the winter holidays. However, winter is also when many job candidates are setting goals and making plans for the coming year, which may include searching for new jobs and opportunities. Additionally, less recruiting activity means employers seeking to attract and hire employees during the winter may experience a competitive advantage over similar organizations.
Simultaneously, many employers struggle to keep employees engaged during the winter months. Employers may notice decreased workplace productivity and morale associated with the cold, dark weather and stress of the holidays and winter months. Left unaddressed, a winter slump can negatively impact employee satisfaction and retention, leading to increased turnover rates and other employment challenges.
Savvy employers can use winter employment challenges as opportunities to attract talented job candidates and re-energize the workforce. This article provides guidance for winter attraction and retention.
Winter Attraction Tips
Many individuals have more free time around the holidays. This provides an opportunity for employers to boost their recruiting efforts at a time when potential candidates have more free time and lenient schedules. Employers can consider the following strategies to improve winter attraction:
- Ramp up social media efforts
- Launch an employee referral program
- Share organizational and employee successes on social media
- Schedule interviews while candidates have free time around the holidays
- Build a talent pipeline to take advantage of the reduced hiring competition
- Recruit college or university students who graduated during the fall semester
- Use employment websites to improve branding and candidate outreach.
- Create a mobile-friendly application process
- Be quick and transparent with all candidate communications.
Winter Retention Tips
During the winter, employees often get less physical activity, spend less time outdoors and see their friends more infrequently. Additionally, many individuals experience a post-holiday slump, which refers to a period of mental fatigue or depression due to the emotional, financial and physical stress of the holiday season. This can negatively impact employees’ mental health and workplace performance. Employers can consider the following practices to boost employee engagement and retention during the winter months:
- Recognize and reward employees for good work and accomplishments
- Encourage goal-setting at the team, department and individual level
- Train employees to ensure they’re well-equipped to handle their workplace responsibilities
- Host active work breaks, such as 10-minute stretching or exercise options around the office
- Offer employees flexibility on days of severe winter weather
- Promote idea sharing and collaboration.
- Check-in with employees on a personal and professional level.
- Design a comfortable workspace (e.g., soft lighting and lounge chairs).
- Celebrate and encourage employees’ personal successes (e.g., birthdays and weddings).
- Encourage employees to take work breaks together.
- Offer holiday bonuses and other incentives (e.g., gift cards or prepaid cards).
- Encourage employees to take paid time off.
Conclusion
Winter can create employment challenges for employers looking to attract and retain talented individuals. Employers that adopt a proactive approach to attraction and retention during the winter months can combat employment challenges that might otherwise contribute to low morale, decreased productivity and high turnover rates.
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- Published in Blog