Employee Benefits Evolve: What Employees Value Most

The amount of money employers spend on employee benefits continues to rise, but COVID-19-fueled shifts are taking place in the benefits employees and employers value most … and in the attention employees are paying to what’s included.  In general, it’s back to the basics — the “old school” or “staple” benefits that provide financial support and care — according to thehartford.com and a 2021 Future of Benefits Study. After all, how important is a nap room or a concierge service that picks up your dry cleaning now that 50 percent of the workforce is working remotely?
 

The point of the perks

At its core, a robust benefits package helps support workers and keep them healthy and productive. Secondarily, it shows workers an organization is interested in their overall health — helping attract and retain talent. Up until recently, organizations were getting extreme with the perks for this second reason — to appeal to and lure workers (particularly younger workers) who saw insurance, retirement programs and paid leave as “a given.”

The pandemic caused employees to revisit those “givens.” “Am I covered?” “Can I take leave to cover childcare?” “I wish I were saving more so I felt financially secure.”

Those “staple” benefits workers have previously come to expect — maybe even, taken for granted — include various kinds of insurance, retirement benefits, paid leave, flexible working, learning & development and profit sharing. The “extras” encompass things like fitness incentives, childcare, student loan repayment, pet insurance, onsite gyms, and yes, nap rooms and snacks.

Of course, the costs have been gradually increasing as well. Today, a the U.S. Bureau of Labor Statistics September 2021 report, puts the workplace benefits price tag at 31% of an employee’s total compensation or $12.06 per hour for civilian workers and 29.4% or $10.76 per hour for private industry. SHRM.org reports the increase in health care spending alone from 2019 to 2021 at $197 per employee, with the projected cost of $15,500 per employee, with large employers covering about 70 percent of those costs and employees bearing the other 30 percent.

Check out some of our newest HR topics and enroll today in a live, virtual seminar!

FMLA Compliance Update

Applying HR Law: Enhanced 2-Day Training

Addressing Sensitive Issues With Employees

How to Write Effective Policies and Procedures  

A shift in benefits offerings and employee interest

The pandemic has changed how we work and live. It’s changed our focus.

More workers are at home, more have issues with childcare or care for elderly parents and need job flexibility. There’s more absenteeism and declining mental health, according to hbr.org. The pandemic also spotlighted the vulnerability of our finances and savings. Employee benefits are shifting because of all these new concerns.
 

Some of the biggest adaptations and focus on employee benefits:

1. Because many workers have faced situations that threaten their own health and finances, they’ve opted into plans that protect their incomes — basic benefits such as life and disability insurance, and hospital indemnity and critical illness insurance. Other programs such as retirement savings plans (which had fallen dramatically in importance from 2001 to 2013) and student loan repayment are also recapturing workers’ attention as their financial vulnerability was thrust into the spotlight.
2. Worker mental health is also strained by the pandemic. Workers are reporting more depression and anxiety, more virtual fatigue and job burnout, and it’s taking a toll on concentration and productivity. Employers are finding ways to support these needs with programs in mental health, work/life balance, and financial success.
3. Job flexibility has taken on new meaning as schools and day cares closed, leaving parents to juggle childcare, online school or tutoring for their children. A benefit that used to be a “nice to have” has moved up in importance.
4. In support of workers’ needs for medical leave or caregiving, 75% of employers have made changes to their paid leave and PTO programs since the pandemic, according to thehartford.com. Some have expanded the amount of leave beyond state and national requirements. Some have adjusted acceptable reasons or increased the number of days workers can roll over.

What are your employees’ benefit expectations? Certainly, the pandemic has made many workers more aware of their benefits packages. It’s also caused certain components to rise in importance … and others to fall by the wayside. Keep your finger on the pulse of employee expectations.

By supporting employees’ evolving needs and paying attention to what’s capturing their attention, you can continue to keep them healthy, productive and loyal. Then, never assume employees are aware of what’s available to them. Promote your offerings.
 

Related article: Is Your Employee Benefits Package Working as an Incentive?