Professional in Human Resources (PHR) Practice Exam

Employer-sponsored healthcare coverage is primarily viewed as a recruitment and retention tool because organizations recognize that offering health benefits is a significant factor in attracting potential employees and keeping current staff engaged. In today’s job market, candidates often evaluate the benefits package as much as they do salary offers. Health insurance is one of the most valued benefits, as it directly impacts an employee's or their family's well-being and financial stability.

Employers that provide comprehensive healthcare coverage can distinguish themselves from competitors, contributing to a positive company culture and employee satisfaction. When employees feel their health needs are supported, they are more likely to stay with the organization, reducing turnover and the associated costs of hiring and training new employees.

While employer-sponsored healthcare can also be viewed as a social and ethical responsibility, its primary function in a competitive labor market is as a tool for recruitment and retention. Other options like highly regulated administrative burden or a benefit mandated by the Department of Labor do not capture the proactive approach that most organizations take in using healthcare benefits strategically to enhance their workforce.