Comp & Benefits
Finance is ‘leaning in’ to manage healthcare costs, WTW exec says
WTW Senior Managing Director Tim Stawicki states that, facing an 11.1% projected increase in medical benefit costs for 2027, CFOs are actively engaging in cost management. He recommends HR and finance collaborate to control spending through optimizing vendors, anti-fraud measures, and alternative plan designs while meeting legal obligations such as minimum value plans with 60% actuarial value. This article also discusses strategies including plan adjustment timelines, spousal surcharges, and waiting periods.
Employers predict moderate pay increases for fourth consecutive year
A compensation planning survey released by professional services firm Marsh on Monday shows that U.S. employers expect a 3.2% merit increase in base salary and a 3.5% increase in total compensation (including merit, promotions, and cost-of-living adjustments) for 2027, roughly in line with actual increases over the past three years. If the forecast holds, it would mark the fourth consecutive year of modest pay raises. The survey also found that economic uncertainty dominates compensation decisions, with nearly 60% of employers saying the economy will have at least a moderate impact; meanwhile, 64% of surveyed companies have provided or plan to provide off-cycle pay adjustments, while AI's use in compensation management remains in its early stages.
HR Dive Trendline on Inside the rapidly changing world of employee benefits
A recent survey released by Mercer shows that nearly half of large U.S. companies with 500 or more employees plan to adjust their healthcare benefits next year to shift more costs to employees. In addition to raising deductibles and copayments, some companies are exploring non-traditional options such as high-performance networks or variable copay plans. Meanwhile, about 6% of large companies have already eliminated coverage for weight-loss GLP-1 drugs in 2026, with another 5% considering or planning to follow suit. The survey also found that despite rising employee costs, 'standard' benefits such as in-vitro fertilization, caregiving support, and one-on-one financial counseling will remain.
The wavering economy ticks up as a factor in executive benefits decisions
NFP's annual survey of 273 executive benefits decision-makers shows that despite heightened economic uncertainty, most companies maintain their current executive benefits plans. Mentions of economic factors in decision-making rose 50% year-over-year, but only 18% ranked them as the primary factor. Talent retention and succession planning continue to dominate decisions, while cybersecurity and AI risks have emerged as new concerns.
As costs mount, employees say they want financial, not wellness benefits
A Gartner survey of over 10,000 employees in May reveals that employees increasingly seek financial protection against unexpected expenses, especially medical costs, while placing less importance on paid leave and work-life balance. Despite ongoing employer investment, most health benefits are not recognized by employees.
Williams-Sonoma to spread tariff refunds to vendors, employees
Kitchenware and home goods retailer Williams-Sonoma announced in its second-quarter earnings report that it will share part of the approximately $200 million in invalidated tariff refunds it received with suppliers and employees. The company plans to use $47.5 million to compensate suppliers for discounts provided during the response to IEEPA tariffs and set aside $10 million for one-time contributions to certain employees' 401(k) accounts. CEO Laura Alber stated that this move recognizes the team's outstanding performance in responding to tariffs.
US firms plan to increase employee base salary budgets by an average 3.3% in 2027
The latest Korn Ferry survey shows that U.S. companies plan to increase base salary budgets by an average of 3.3% in 2027, with a median increase of 3%. Despite economic uncertainty, most companies still plan to give raises to the majority of their employees. The survey also covers topics such as incentive spending, the impact of artificial intelligence, and talent development.
Week in review: Healthcare costs may rise nearly 10% next year
Most watched this week: Medical costs may rise nearly 10% by 2027; Number of the week: $103,265 (new proposed H-1B fee); Quote of the week: University of Florida Professor Brian Swider on the limitations of first impressions.
Employers offer loan repayment, ‘re-recruiting’ to attract skilled labor
The rapid expansion of data centers in the United States has intensified the shortage of skilled workers. Contractors such as Turner Construction, Clayco, and DPR Construction shared new recruitment and retention strategies at industry events, including student loan repayment, incentives for mobile projects, and the concept of 'rehiring,' while emphasizing the importance of building local workforce pipelines.
DOL, other agencies address questions about wellness program surcharges
The U.S. Department of Labor and several other federal agencies issued joint guidance on Wednesday, responding to questions in class action litigation over tobacco surcharges in employer-sponsored group health plans. The guidance clarifies that plans or issuers are not required to retroactively provide health incentives if employees complete reasonable alternative standards, and it also addresses disclosure obligations. This guidance provides greater clarity for human resources departments in building compliant plans.