Surviving the Labor Shortage: 6 Rules for Employers

Written by Joanna Morrow

Joanna Morrow, Principal and Founder of Employer Benefits & Advice, is an employer consultant and advocate who has worked in the employee benefits industry for over two decades. She works diligently to help employers overcome obstacles in their business by sharing her expertise in Human Resources, Benefits & Compensation, Process Mapping, Risk Management and ERISA/DOL/IRS compliance. She is a licensed life and health insurance professional in the State of Arizona and is an active member of the National Association of Health Underwriters (NAHU).

Surviving the Labor Shortage: 6 Rules for Employers

As of today, there are 146 days left in 2018. January 1 renewals are typically issued 90 days in advance, which leaves employers 6 weeks between now and then to improve their benefit strategy for 2019.

As the economy grows stronger and employers find themselves competing even harder for qualified talent, companies can start to feel that they’re at the mercy of the labor market. I like to remind employers that compensation and benefits offer an opportunity to manipulate a tight labor market in their favor provided they take a controlled and strategic approach.

Using a comprehensive benefit strategy, here are 6 rules employers should follow to influence employee behaviors to their advantage and succeed in a tight labor market.

1. Design What Employees See

For your company to stand-out as the employer of choice for potential job candidates you need to first know what your competitors are doing in the area of compensation and benefits. If you haven’t engaged in a formal benchmarking exercise, this is the year to do it!

People looking for jobs spend all day examining the salaries, benefits and working conditions of your competition. Don’t give them the upper hand. Benchmarking analytics allow employers an opportunity to be more precise in build a competitive benefit package within the confines of a budget.

Also, review your company website. Then review the websites of your competition. Does your website showcase the benefits you offer? Could the messaging be improved?

2. Craft What Employees Hear

Education helps give context to your messaging and can bolster appreciation for the benefits you offer. This is often an area where employers can always improve. Even “bad” news can be messaged as good news with a little time and planning.

Here are some examples I have made during open enrollment meetings in order to give context to messaging or make changes more palatable to employees:

  1. Educative Statement: “Last year only 2% of employees at XYZ Company met their $3,000 deductible, and 83% of you didn’t exceed $500 of your deductible.”
  2. Next Message: “This year we wanted to find a way to put more money in your pocket so we have increased the deductible to $5,000 and with the money saved, XYZ Company is contributing an additional $50.00 per month to your Health Savings Account. That’s an additional $600 tax free dollars per year in your pocket to spend or save toward qualified medical expenses.”

Even if you offer only the basics, there is a real knack to marketing benefits to employees to make a positive impact and a lasting impression.

3. Create What Employees Feel

If you’ve spent time carefully crafting your messaging around benefits then I guarantee your employees are already more appreciative of your benefit package, valuing even more the opportunity to work for you.

Anytime you communicate information it creates an experience. In creating that experience it’s important to recognize that different demographics respond to different formats and frequencies of information.

Online benefit enrollment systems are increasingly becoming the preferred format for gathering and managing benefit enrollments. The online process offers a considerably more pleasant experience for all involved over the traditional paper process. Click the video below for a sneak peek at how slick online enrollment can be!

Employers are issuing ongoing communication throughout the year via mobile apps, text messaging, webinars, and even through gaming, to remind millennials of their benefits while older employees may still prefer emails and good old fashioned paper-copy.

4. Control What Employees Spend

When it comes to what employees spend on healthcare, employers have more influence than they tend to realize, but again, education is key. You need health plan utilization data to identify the opportunities, then craft your plan design and/or incentive strategy accordingly. Here are some of the most basic examples:

  • If data shows that employees are opting for brand-name drugs over generics, make generics free.
  • If urgent care or ER utilization is high, be sure you’re promoting and explaining in detail the tele-doc service included with your medical plan. Even if it saves 3-5 employees from visiting an Urgent Care or an ER department for a non-emergency you will have reaped the reward.
  • Limit the hospital network offered to a select number of facilities and ensure employees understand exactly where to go in the case of an emergency.
  • Require pre-authorization on certain high-cost specialty medications where a less expensive alternative may very well offer the same therapeutic benefits.

Plan designs and education offer a multitude of opportunities for employers to influence how employees spend on healthcare which ultimately impacts your premium costs. Employers with self-funded medical plans have even more freedoms in this regard, one more reason even small employers are gravitating toward self-funded medical plans.

5. Dictate How Employees Treat You

If you’re working on all the areas above, employee morale will start to reflect it. However there’s always that one, rogue employee who sets out to make your life difficult. That’s why when it comes to matters of ERISA and benefit compliance, it’s important to send the message loud and clear that you know the rules, and you’re following them. I say this because increasingly, more and more employees are becoming aware of their rights. Remember, it’s called the Department of Labor, not the department of employers!

When your compliance and workplace policies are tight, you can significantly minimize challenging behavior from employees by eliminating the likelihood of one of them finding a legitimate fault with your workplace practices.

6. Bask in the Image Projected by Employees

I recall an open enrollment meeting several years ago, early in my career. My client operated a number of convenience stores across the State. During an open enrollment meeting, as I assisted one of the cashiers with the completion of his enrollment form he admitted that he was the first person in his family to ever have a job with benefits.

That statement has stuck with me. He was a minimum wage employee and he was beaming with pride. I realized in that moment that he felt valued, and more importantly privileged to be among the employees who were offered benefits. Those are the employees who are dedicated to giving back to you. They’re the ones who are making sure the coffee pot is full, keeping the floor mopped on the midnight shift and emoting positive affirmations about your company.


This renewal season, remember that a good benefit advisor should do far more than just place and manage insurance products. At all times benefit advisors should be helping you put your best foot forward in the labor market by developing strategies for you in all 6 areas discussed above. Done right, benefits and incentives are not only a tool to compete for talent, but also an effective way for companies to trade up to the better workforce they deserve.

If you would like to benchmark your benefit package, or arrange for a full demo of our online benefits administration and enrollment tool, contact us today at 602-903-4047, or email me at