The Great Resignation and the New Benefits Arms Race

The Great Resignation has sparked something we're calling the benefits arms race. Employers are competing on benefits like we haven't seen in years. Here's what's happening.

The Escalation Pattern

It started with individual employers enhancing benefits to address retention. Then competitors responded. Now we're seeing rapid escalation in several categories:

Parental leave: What was competitive two years ago now looks stingy. Leading employers have pushed for more weeks paid leave, forcing others to respond.

Flexibility: Remote work, hybrid options, flexible hours. Employers who once insisted on office presence are reversing course.

Family-forming benefits: Fertility coverage, adoption assistance, surrogacy support. Benefits that were rare are becoming expected in competitive industries.

The Data Shows It

Our benchmarks are shifting faster than usual:

• Employer contribution amounts are ticking up
• Plan design generosity is stable or improving (unusual in a high-cost environment)
• Ancillary benefits are expanding
• Mental health benefits are strengthening across the board

These aren't minor adjustments. They represent a meaningful shift in employer investment.

Industry Variation

The arms race is most intense in:

• Technology: Always competitive on benefits, now more so
• Healthcare: Competing for clinical staff in a shortage
• Financial services: Responding to talent mobility
• Professional services: Matching client expectations

Other industries feel less pressure but aren't immune.

Strategic Implications

For employers: Understand where you stand before you fall behind. Benchmarking isn't optional when competitors are actively enhancing their offerings.

For consultants: This is a moment to add value. Help clients understand the competitive landscape and make strategic decisions about where to invest.

The arms race may cool eventually, but the benefits baseline has permanently shifted upward.