Employee priorities have changed as a result of the pandemic, pushing companies to reexamine their employee benefits offerings for 2022. Key concerns include their physical wellbeing, peace of mind and financial health—huge issues that are challenging employers to consider employee benefits they might have ignored in the past.
Here are six trends experts say will drive employee benefits decision making this year and next.
1. Healthcare costs expected to increase 6.5%
According to a study by PriceWaterhouseCooper, health costs in 2022 will increase 6.5%–slightly less than the 7% increase in 2021. Among the reasons for the increases are greater utilization by consumers who deferred care during the pandemic, along with investments in technology by healthcare providers. Another emerging trend: consumers are becoming more active in their own healthcare journeys, which is expected to help curb spending long-term. Businesses that help employees with their health and wellness will be positioned to reap the benefits of fewer medical claims from a more informed, healthier workforce.
2. Employers offering more voluntary benefits
When it comes to benefits administration, employers are constantly looking for efficiencies, treading carefully between cutting costs while still remaining competitive. That’s where voluntary benefits can help. Employee pay-all benefits are expected to play a greater role after the pandemic according to the Society For Human Resources Management (SHRM). “To meet employee expectations and attract and retain talent, employers are offering voluntary benefits, to enable employees to create a package that works for their needs,” SHRM writes.
3. A more holistic approach
The Voluntary Benefits Benchmarking Overview survey conducted by insurance software firm Zywave shows that employers are beginning to expand the range of their offerings to include cancer insurance (32%) critical illness insurance (33%), and financial counseling (12%), demonstrating a willingness to invest in employee benefits that can combat the lingering effects of COVID-19. In fact, employers who currently do not offer such holistic benefits say they are likely to add them in the future. Membership discounts (25%), pet insurance (19%), financial counseling (15%), critical illness (13%) and student loan repayment assistance (11%) are all perks that employers say they are exploring.
4. Big companies up the ante
Large businesses with deep pockets are investing more in employee well-being. In early 2021, Fidelity Investments, together with the nonprofit Business Group on Health surveyed more than 150 large and midsize U.S. national and multinational companies. The results show the vast majority of these businesses offering programs in mental health, work/life balance, caregiving and financial success. For example, 64 percent of these businesses enhanced child care support and 83 percent have or will provide programs to support emergency savings, debt management and budgeting.
Big companies also continue to invest in corporate well-being programs, offering a per-employee incentive of $600 on average.
5. Retirement and other financial assistance
One of the pandemic’s hard lessons is the importance of financial security. Today, many workers are rethinking spending vs. saving, and are prioritizing financial goals. According to Schwab Retirement Plan Service’s annual survey, almost one in two workers plans to save more overall, and more than a third plan to increase 401 (k) contributions, invest more, and pay off debt.
The important news for employers is that 75% of workers say they are more likely to stay at their job if their employer offers financial wellbeing benefits (Source: Purchasing Power survey). Think: voluntary accident insurance to supplement health plans, student loan repayment programs, corporate discount programs, low-interest loans, medical deductible financing and financial counseling.
6. Shifting paid leave policies
The Biden administration’s American Families Plan (AFP) includes a national, comprehensive parental, medical, and family leave program. Whether a national program becomes law or not, the tides are changing due in large part to the pandemic, with 75% of likely voters saying they support paid family and medical leave.
Many employers have already loosened their leave policies. For example, one in 10 companies surveyed offer Juneteenth as a paid company holiday. (Source: Mercer Survey on Absence and Disability Management). Another major finding has to do unlimited PTO. The number of companies offering it has doubled in just three years, to one in five in 2021, up from one in 10 in 2018.
With the changing employment landscape, new employee mindsets and priorities, and so many choices available, deciding on the right employee benefits for your business can be mind-boggling. The on-staff brokers at NEMR Total HR expertly review a company’s staff composition and provide guidance on the options with the lowest costs and best employee benefits.