In the ever-evolving landscape of employee benefits, staying attuned to emerging trends is paramount for employers seeking to attract and retain top talent. As the workforce evolves, so do the expectations around workplace benefits. Statistics show that 40% of companies say their workers have left for positions that offer better benefits. As a result, 62% of businesses have changed their compensation packages in the past year. Companies are now getting creative with the benefits they offer to meet employee needs.
From innovative wellness initiatives to flexible work arrangements, the employee benefits space is experiencing dynamic changes that directly impact organizational success. This article delves into the top employee benefits trends employers need to be aware of, providing insights into how these trends can enhance employee engagement, satisfaction, and overall business outcomes.
The Evolution of Employee Benefits
In the late 1800s, employee compensation and benefits were unheard of, while the 20th century saw milestone developments in employee benefits like profit-sharing and health and retirement programs. The 21st century has brought new transformations, with employers re-evaluating their perks and the term “benefit” being redefined.
In 2022, businesses found it more challenging to attract and retain top talent, so elevating employee benefits packages has become even more necessary with workers looking for flexibility, financial support, and more. As a result, today’s worker perks are a vital part of employee compensation. They are becoming more diversified and competitive, with companies adding more desirable and flexible benefits to hire the best candidates.
Today, organizations and businesses understand that success relies on people, making employee voices crucial in ensuring their satisfaction. Monitoring the dynamic landscape of the employee benefits industry can help shape your compensation packages and give workers what they want the most – a better work-life balance, flexibility, and financial support.
The Role of the Pandemic in Shaping Employee Benefits
The COVID-19 pandemic forever changed the way companies do business. It spurred an increase in mental health issues, persistent inflation, and the rise in the cost of living has significantly changed how workers viewed health and wellness benefits. Fear of illness drove employees to focus more on protecting themselves and their loved ones.
The widespread increase in anxiety, depression, and stress have increased mental health concerns for employees and employers, so the need for services to address these issues has become a high priority. Before the pandemic, health benefits were further down the list of things that drive employee attraction and retention. These are now one of the top three benefits potential candidates seek out.
A Society of Human Resource Management survey of HR professionals revealed that the pandemic prompted significant changes like expanding employee health and wellness benefits related to hybrid and remote work environments. COVID-19 also brought more attention to family leave and caregiving duties.
Current Employee Benefits Trends
Keeping the needs and desires of employees in mind, here are the primary employee benefits trends employers should focus on right now.
Comprehensive Health and Wellness Programs
Health and wellness programs focus on your employees’ physical and mental health by offering ways to make your team healthier: gym memberships, better snack options, and more. Some areas they cover include:
- Dental insurance
- Health insurance
- Mental health support to manage depression, stress, anxiety, and more
- Prescription drug insurance
- Wellness programs
- Employee assistance programs
Reducing healthcare costs and focusing on the whole body and well-being are top priorities for workers. This includes improving mental health benefits, as it’s connected to physical well-being.
A healthy workforce is vital for a positive work culture, productivity, and creativity. When employees are socially, financially, and emotionally fit, they’re likely to be more engaged and productive at work.
By making healthcare more affordable for employees, companies are showing that they care about their workers. You can offer employee health benefits accounts like FSAs, HRAs, or HSAs that help workers save for healthcare expenses.
Financial Wellness Support
As financial instability can cause anxiety, especially during extreme world events like a pandemic, helping employees prioritize financial goal planning and improving financial wellness are becoming more important. Achieving financial wellness can be challenging for many people because of a lack of financial knowledge, debt, and the ever-rising cost of housing. In fact, personal finances are the number one stressor for employees.
- Save for emergency funds, retirement, and debt repayment.
- Create financial budgets.
- Manage estate planning and insurance.
- Invest their wealth.
Financial wellness programs can be a good investment for employers because of the significant potential for improved productivity and engagement as well as retention of employees.
Flexibility at work, such as remote work, flexible work hours, and unlimited vacation policies, is one of the top employee benefits trends to consider when re-evaluating your benefits package.
A better work-life balance is a high priority for both employers and employees, so it’s not surprising that flexibility is a coveted perk. Adaptable work hours are one of the top benefits to offer and apply to various lifestyles because they provide a better work-life balance, while remote options also help.
Lack of flexibility, childcare issues, and not having good benefits like paid time off and health insurance are primary reasons people quit their jobs. Keeping a pulse on this trend can help boost retention and attract ideal prospects.
There is no one-size-fits-all employee benefits package, so personalized benefits can be a great way to provide workers with choices to customize their benefits to their needs. One strategy is to offer voluntary benefits that are employer paid, or employees pay for themselves at a discounted price.
These can include ancillary benefits like financial counseling, healthy lifestyle programs, ID theft protection, and supplemental insurance packages like pet, cancer, disability, and life insurance.
Choosing the right amount and type of personalization is key. Too many options can be overwhelming, while too few don’t offer enough choices for different employee demographics. The user experience is critical in helping employees choose the benefits they’ll use and eliminate any barriers to accessing and using them.
Greater Emphasis on Diversity and Inclusion
Today’s diverse workforce draws employees to businesses with an inclusive environment and culture. Diversity, equity, and inclusion (DEI) is one of the most important employee benefits trends to consider when evaluating your employee compensation package. One perk to consider is floating holidays. Not everyone celebrates the Christmas holiday, but it is a traditional one offered for employees. Giving workers the option to choose their holidays allows them to use them when they want to. You can combine this with ample paid time off to attract a more diverse workforce from different cultural and religious backgrounds.
Paid parental leave is another great perk, as the United States is the only developed country in the world that doesn’t have a federal paid program for parental leave. Many employees cite this as an important benefit for them.
Your business can implement steps to show your commitment to DEI in the workplace, like vetting recruitment and hiring strategies. It’s also important to acknowledge the support of all cultures, religious backgrounds, marginal communities, and sexual orientations.
The Impact of These Trends on Employers
Employee benefits are a vital part of any compensation package, and the options available can mean the difference between top talent choosing your job offer over another. A competitive benefits package can improve employee loyalty, retention, engagement, and productivity.
Employee turnover is costly and a concern for companies of all sizes. An Employee Benefits News study reported that turnover can cost employers 33% of a worker’s salary. Competition to attract and retain the best workers remains high—your benefits package can help you stand out.
Focusing on benefits that address employee struggles can help them be more engaged and focused at work and contribute to a positive work culture that attracts top talent.
How Employers Can Adapt Their Benefits Programs
There are several ways you can adapt your benefits to meet the changing needs of employees. The simplest and most cost-effective way to add mental health and wellness resources is to choose a solution that focuses on preventative wellness. Research shows that these programs provide a 6-to-1 return on investment.
You can also implement programs that incentivize employees to track their health through friendly interoffice competition. These programs can help you save money on health insurance now and in the future. For example, you could provide financial rewards or give employees paid time off if they complete their annual physical.
Supporting the transition to a new worker compensation package can be very helpful for adapting your employee benefits program. Clear and transparent communication with workers is especially critical in a remote environment and can aid the transition to the new program.
Tools and Resources for Adapting Employee Benefit Programs
There are several benefits software options and tools that can assist in adapting your employee benefits program:
- Benefits administration platforms: These platforms allow employees to compare different benefits plans and make informed decisions.
- Benefits enrollment software: This software focuses on enhancing the worker experience during the enrollment process.
- Time tracking, payroll, and employee benefits solutions: These tools streamline administrative tasks related to employee benefits.
- Online benefits administration services: These services provide guidance, tools, and support for both employees and employers.
When revamping your employment benefits program, it is crucial to ensure accessibility for remote workers. Consider providing interactive tools and benefits available through digital programs or podcast-like experiences. Partnering with Baldwin Risk Partners can offer comprehensive employment benefits, insurance, and more.
Future Predictions for Employee Benefits
As the needs of employers and employees constantly shift, staying aware of new trends is vital to creating employment benefits packages that keep both parties happy. Inflation and rising healthcare costs will no doubt continue to affect the needs of workers. As stress affects mental and physical health, catering to those needs should always be a priority. Perks that focus on elder care, fertility, and pet insurance will likely become popular additions to compensation packages.
Invest in Your Employees to Boost Retention and Attract New Talent
It is crucial to keep the needs of your employees in mind when adapting your benefits package. As these needs are dynamic and based on the world around them, it’s important to constantly re-evaluate your programs and perks based on employee benefits trends. Get regular feedback from employees to see which benefits they like most and least and ask them for suggestions. Allowing them a voice in the process helps them feel seen and heard.
The more diverse and creative your employee benefits package is, the better chances you have of attracting and retaining the right talent for your business. Contact us to learn more about how you can improve your benefits offerings.