Navigating a Recession: Why Short-Term Solutions Don’t Always Pay Off
In these times of economic uncertainty, some indicators predict that an economic recession will happen soon. Employers who are measured on short-term profitability goals often turn to cost-cutting measures to maintain the bottom line, including employee layoffs, restrictions on hiring, and cutting benefits. These actions may protect profits in the short term, but they can end up becoming more costly down the road.
Unexpected Long-Term Costs
Layoffs are a way to save costs in the near term, but the cost of recruiting, rehiring, and training lost talent is substantial. Research by SHRM estimates the cost of replacement can be as high as 50 to 60% of the lost employee’s salary, with overall costs ranging from 90 to 200%.
Similarly, cutting or not offering certain employee benefits may result in unexpected costs. An employer that doesn’t offer family-building benefits or that has unmanaged benefits can be hit with substantial costs due to premature births, multiple births, neonatal intensive care unit (NICU) stays, and the medical costs associated with long-term complications. Managed family building benefits, including fertility benefits, help employees get the best outcomes while reducing multiple births dramatically. Singleton births are much less risky for both mother and baby and are much less likely to result in premature birth or long-term complications. According to the March of Dimes, in 2020 multiple births were 7 times as likely to be premature compared to singleton births. A study from 2013 found that the medical cost of twins from pregnancy through one month after delivery was nearly five times as much as that of a singleton, while triplets or more multiples cost nearly 19 times as much.
Long-Term Savings from Family-Building Benefits
Managed family-building benefits, particularly fertility benefits, actually result in long-term savings. If an employer currently has an unmanaged benefit, WIN’s managed fertility benefit will help lower costs through clinical oversight, resulting in a 400% return on investment. Nurse Care Managers guide your employees through their fertility journey and help them choose the most appropriate and effective doctors, medications, and treatments, helping them towards a healthy, singleton birth. WIN’s Medical Advisory Board of practicing reproductive endocrinologists contributes to these protocols and to clinical oversight and credentialing criteria for network physicians. WIN’s protocols have been proven to increase success rates, while reducing multiple births.
As an example, employees with an unmanaged benefit may choose IVF with multiple embryos transferred, hoping to get twins in one IVF cycle and reduce their cost of subsequent IVF cycles. Without clinical oversight, they wouldn’t know that a multiple pregnancy is costly and risky. More than 20% of twins require a NICU stay, which can cost an average of $50,000. Multiples are also twice as likely as singletons to have birth defects, such as spina bifida, cerebral palsy, and congenital heart defects, all of which require extensive care. WIN’s Nurse Care Managers will guide employees in choosing the most effective protocols and treatment, helping them make the decisions most likely to result in a single, healthy baby, all while providing valuable emotional support along the way.
Instead of resorting to layoffs and cutting benefits during economic uncertainty, forward-thinking employers can pursue innovative solutions such as WIN’s managed family-building benefits to come out stronger on the other side. Click here to learn more about how our cost saving solutions can help.