What’s the #1 people risk for small and medium-sized enterprises (SMEs)?
People are everything to SMEs, so it’s no wonder that rising health and benefit costs top their list of worries. Employee benefit premiums and related costs ranked first in our People Risk 2024 survey of the most likely people risks to affect their business in the next two years with the most severe impact.
Several factors are behind benefits costs’ steady climb. Inflation is putting pressure on medical costs, with global medical claim costs outside the US projected to rise to 11.7% in 2024, continuing a trend of double-digit increases every year since 2021. (1) Insurers have also become more selective on who and what they will insure, and people are using private health insurance more often and for more severe claims.
Investing in people is a top priority, so maintaining competitive pay and benefits when costs go up is a major concern. 30% of SMEs noted this concern in our latest People Risk survey, with 37% saying they worry about the impact of rising costs on HR and resource expenses to manage benefits programs.(2)
Although it’s harder to plan when future insurance premiums and other costs are uncertain, we believe there are four actions SMEs can take to help control costs without sacrificing competitive benefits.
