More than half of U.S. employers (51 percent) reported a turnover rate of at least 15 percent in 2022, up three points from 48 percent in 2021, according to Gallagher’s 2023 U.S. Organizational Wellbeing Report.

Employee retention has become the main priority for both operations (51 percent) and human resources (66 percent) this year, found the report, which examines how employers are adjusting compensation and benefits to improve retention rates.

“An organization’s ability to retain employees ultimately impacts its bottom line because hiring and training a new employee usually costs much more than retaining someone who is already on the payroll,” said William F. Ziebell, CEO of Gallagher’s Benefits & HR Consulting Division. “The workforce makeup and employee needs are evolving at a rapid rate. As a result, employers have to consider more comprehensive benefits and compensation offerings that can enhance the overall employee experience.”

The study, conducted by the global insurance brokerage, risk management and consulting services firm, draws data and insights from more than 4,000 organizations across the U.S., analyzing current and emerging trends.

More than three in four employers (78 percent) enhanced existing employees’ base salaries, and another 40 percent enhanced variable compensation, the study found.

Of those surveyed, 39 percent of employers invested in expanded medical benefits, and 38 percent upgraded their well-being initiatives — both up six points from 2022.

“Despite the overwhelming focus on improving retention efforts, most employers anticipate growth in both revenue and headcount by 2024,” the report stated.

Nearly two-thirds of employers (63 percent) project a revenue increase, and 57 percent predict adding additional employees.

Though several employers reported medical benefits expansion in 2023, more than half (53 percent) increased cost sharing due to an expected moderate (68 percent) or significant (10 percent) rise in healthcare costs.

Telemedicine continues to be a focus for employers, the report found, as well as healthcare decision support and cost-transparency tools to offset increasing premiums.

The study revealed that telemedicine saw significant growth among cost-management options, up five points to 63 percent when compared to 2022.

An increase was also seen in the number of employers that supply their employees with cost-transparency tools (30 percent, up six points) and provide healthcare decision support (29 percent, up two points), the report noted.

“While most diversity, equity and inclusion initiatives (DEI) are managed by human resources,” the report stated, “leaders sometimes share the responsibility since they set the tone and vision for policies and practices in the organization.”

Of those surveyed, 41 percent of employers include DEI oversight as a leadership accountability measure.

Employers surveyed said employee communications more often include content about DEI (54 percent) than talent analytics and engagement (37 percent).

Key elements of talent management and total rewards also incorporate DEI, they reported, including succession planning (30 percent), benefits (29 percent), compensation (28 percent) and performance management (22 percent).

“Now more than ever, it’s important for organizations to ensure their benefits and overall vision are well matched with the interests of employees,” said Ziebell. “While diverse benefits may come with more complexity, providing a people-first framework helps to address differing employee needs and interests.”