Will Aetna be nabbing all the good employees with pay increase?
Starting in April, Aetna will increase the incomes of its lowest-paid employees by as much as 33 percent, to a minimum of $16 an hour, the insurer announced Monday.
The move is an attempt to recruit top prospects, reduce turnover and, according to CEO Mark Bertolini, reflects the insurance industry's continuing shift to a business-to-consumer market, reported the Wall Street Journal.
"We're preparing our company for a future where we're going to have a much more consumer-oriented business," Bertolini said, by creating "a better and more informed workforce."
This increased pay will result in an average 11 percent raise for the almost 6,000 impacted employees, including customer service, claims administration, plan sponsor eligibility and billing employees. None of those positions currently make minimum wage in their areas.
"As we evolve from a traditional service company to an organization that emphasizes the consumer experience, we know that having the best talent will be critical in meeting ever-higher customer expectations," spokesman Walt Cherniak told Lancaster Online. "We're continuously evaluating our benefits and compensation strategy to make sure it reflects our vision, and that it enables us to attract and retain the best talent."
In addition to lowering its $120 million in employee turnover costs each year and improving the quality of job prospects, Aetna's pay increase could impact other insurers' ability to recruit and retain their employees.
In fact, Harvard University economist Lawrence Katz said the move could help Aetna keep its high-quality employees. "There's a very strong relationship between wages and turnover," he told the WSJ. Plus, there's evidence that higher-paid workers feel better about their jobs, which "seems to translate into better performance," he added.