Employers weigh retention, costs in developing benefits strategies

Employers are focusing on employee retention and well-being, while keeping an eye on costs, as they develop their workplace benefits strategies.

Marsh McLennan Agency revealed the findings of its sixth annual National Benefits Strategy Survey, which examined employers’ priorities for providing benefits to their workers.

A continued emphasis on employee retention and engagement stood out as the top issue among employers in this year’s survey, said Nick Pearce, Marsh McLennan Agency’s vice president and employee benefits insights and analytics practice leader.

The vast majority of employers surveyed – 94% - said controlling medical costs was important to them in 2026, up from 91% who said the same last year. Other benefit-related issues that employers said were important in 2026 were employee recruitment (85%), managing pharmacy costs (77%) and cost effectiveness of retirement benefits (64%).

“This year, employers are facing pressure to control these costs while trying to maintain their comprehensive benefit package to attract the right employees,” Pearce said.

Employers are taking several measures to manage benefit costs, the survey showed.

• 39% are changing medical carriers.
• 35% are introducing targeted programs to control costs.
• 29% are shifting more costs to workers through increased medical plan contributions.
• 26% are shifting more costs to workers through plan design changes.
• 12% are requiring higher out-of-pocket costs for certain low-value services or sites of care.

Employers are considering plan design changes over the next 12 months to combat future cost increases, the survey showed, with more than half of employers saying they are considering increasing deductibles, coinsurance or maximum out-of-pocket costs. Other plan design changes employers are considering include increasing copays, or implementing or promoting a narrow network plan.

Employee retention is highest priority

Half of the employers surveyed said employee retention is the most important human resource initiative their organization will focus on over the next two years, said Amy Letke, Marsh McLennan Agency's national HR consulting leader.

“Retention isn’t about keeping head count. It’s about keeping the right people in the right roles genuinely engaged and committed to your organization’s future,” she said.

The survey showed retention strategies have remained relatively consistent over the past three years. There is strong emphasis on professional development, career advancement and flexible work arrangements.

“The bottom line is that the most effective retention strategies are relational and developmental. Employees want to grow, they want flexibility, and they want to feel genuinely valued well beyond that paycheck,” she said.

Employees need disease management support

Slightly more than one-third of employers surveyed (36%) said their organization offers a well-being plan for its employees, said Betsy Nota-Kirby, Marsh McLennan Agency's senior vice president, national health management consulting. Among those that offer a well-being plan, the key components of that plan include company-sponsored health challenges, seminars and classes, health coaching, risk assessment, on-site fitness facilities or gym membership benefits, company-sponsored health screenings, healthy food options, weight management programs, and disease-specific or condition-specific solutions.

Disease-specific or condition-specific support is an area in which employers and employees are missing out, she said.

“Sixty percent of the U.S. workforce has at least one chronic condition that can be positively impacted by some sort of lifestyle change – medication, eating healthy, exercise – yet we don’t have tactics in place for our workforce to make those improvements. And if we don’t have that benefit strategy in place, we won’t be able to realize the cost containment savings and reduce the risk of that population long term.”

Nota-Kirby recommended that workplace health incentives “should center on employees having a relationship with a primary care practitioner so they will get the screenings they need.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].