Healthcare organizations are turning to referral and retention bonuses as competition for talent ramps up during a period dubbed The Great Resignation. Meanwhile, analysts project that merit increases for 2022 will reach double-digits. This case study describes how Gallagher helped this healthcare client take a holistic approach to total rewards philosophy and offerings for a sustainable approach.

Author: Jason Rabalais

CHALLENGE: Unsustainable Compensation

COVID-19 pushed a very tight labor market into hyper drive. Organizations, particularly in healthcare, are pulling out all the stops to attract and retain top talent. More organizations are turning to referral and retention bonuses. Meanwhile, analysts project that merit increases for 2022 will reach double-digits, with critical care premiums topping 100 percent of base pay for some specialties.

Recognizing that attracting and retaining talent is fundamental to success, Gallagher's Human Resources and Compensation Consulting team recommended a holistic review of the client's total rewards philosophy and offerings.

Client Summary

  • Large healthcare system (3,000 employees)
  • Talent retention is important to meet current patient care demands
  • Talent attraction and retention are critical to support growth strategy of doubling in size in five years
  • Market forces are pressuring the organization to pay referral and retention bonuses unsustainably
  • Leaders sought consultation with Gallagher to assess the competitiveness of their compensation practices

SOLUTION: Assessment and Analysis

The client's leadership team embraced the idea of a total rewards approach to better understand their ability to attract and retain talent in the near term, and to meet their long-term growth objectives. A multi-disciplinary Gallagher consulting team completed a comprehensive analysis of the client's organization and total rewards competitiveness.  Analysis consisted of:

  • Deploying an HR analytics deep dive to examine workforce composition, talent movement and overall retention rates, as well as rates specific to key roles and tenure bands, diversity, leadership spans of control and organizational design.
  • Reviewing total rewards benchmarking and recommendations against national benchmarks, as well as a defined peer group in the client's market.
  • Benchmarking included 10 core components of total rewards in the areas of compensation, health and welfare benefits, voluntary, retirement, paid leave and tuition assistance. The consulting team leveraged Gallagher's proprietary benchmark data, as well as external surveys to complete assessment.
  • Developing a proposed total rewards strategy designed to support the organization’s growth needs.

RESULT: Cost Avoidance and Confident Positioning for Growth

The Gallagher team's analysis and benchmark data assisted the client's leadership team in determining the appropriate allocation of limited financial and human resources. Gallagher's analysis revealed:

  • A competitive compensation market position: 57% against local peers and 67% against a national benchmark. In addition, the employer's medical plan placed in the top quartile nationally.
  • The HR analytics deep dive revealed attrition of key provider roles occurred mainly within the first six months on the job, signaling issues with talent selection and onboarding. Leadership efforts to improve the effectiveness of these functions are critical given the organization's aggressive growth targets.

Using the strong total rewards position and areas for opportunity, Gallagher's Human Resources and Compensation Consulting team partnered with the organization's HR team to recommend and support the following onboarding redesign:

  • An employee experience survey strategy, administration and talent insights reporting
  • Surveys to include 30- and 90-day measures to monitor the onboarding/orientation experience
  • "Stay" interview surveys to assess employee engagement and intent to stay
  • Exit survey to capture and plot trends for drivers of attrition

Talent insights reporting will arm HR leaders with data to identify progress to growth targets, and pinpoint areas in need of attention to mitigate talent risks in real time.

Through Gallagher's holistic analysis, organization leaders avoided reacting to market conditions of unsustainable compensation increases. After working with the Gallagher team, leaders are better positioned to attract, onboard and reduce attrition to retain the talent necessary to meet current patient care demand. Further, leaders now can confidently move ahead to pursue their goal to double the organization size and capture more market share in the next five years.


Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.

This material was created to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation.

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