This year, we are seeing some changes in the kinds of benefits that employers are offering their employees and the benefits that are being scaled back. A lot of this is coming as a result of the COVID-19 pandemic, of course, but there are larger forces at work as well. The recent SHRM Benefits Survey provided some key insights into what these trends are, as well as the reasons for them, that are worth considering, no matter what side of the table you are on.
Flexible Work Arrangements
When COVID-19 began triggering states of emergency across the US in March 2020, tens of millions of people were asked to work from home indefinitely. While the COVID-19 situation is not as severe this year as it was back then, “hybrid work is here to stay,” says Jennifer Schoenig, VP at Guardian Life. She adds: “We’ve become accustomed to new behaviors and lifestyles. Work and life have intermingled more than they did before. Now it’s the norm for most of us.”
Flexible, hybrid work arrangements are considered the top benefit employers can provide outside of salary and standard benefits. In 2020, 78% of respondents in the SHRM survey indicated their organization increased employee options for telework. Remote work, at least during some days of the week, continues to be an option for many employees. Gene Lanzoni, SVP at Guardian Life, says that “nearly two-thirds of employers are planning to have at least a portion of their workforce be remote in 2022”.
Not everyone wants to be at home 100% of the time, as some people miss being with their colleagues and those who live alone may want to get out of the house for a while.
Mental Health Benefits
As a result of the pandemic, organizations expanded their mental health benefits, recognizing the acute need to support their employees under increased stress, both work- and non-work-related. In 2020, 25% of employees said their organization increased this benefit.
Of course, mental health issues have been a widespread problem for years, but the pandemic put a bigger spotlight on them and got more people discussing them, which has helped to reduce stigma. So we will likely continue to see organizations focus on protecting the emotional well-being of their employees.
While mental health coverage rose by just 1% in 2020 compared to 2019, coverage for other services that may significantly impact mental well-being and quality of life increased. These include a meditation/mindfulness/contemplative program and a stress management program. Having said that, some wellness benefits have been cut back; these include a general wellness program, health insurance premium discount for participation in wellness programs, and rewards or bonuses for completing certain health and wellness programs.
Also, while employers are increasingly offering mental health resources, there’s still the problem of them being underutilized. You can improve employee utilization of these resources by enhancing awareness of them, making them easily accessible, and ensuring these benefits are diverse enough to cater to individual needs.
A More Holistic Employee Leave Strategy
The pandemic caused 75% of employers to change their unpaid leave policies, and this trend is likely to continue through 2022. Senior leaders are now more aware of the importance of leave management, as COVID-19 meant an increasing number of employees had to take leave to care for a family member or recover from their own illness. The pandemic showed that many employers didn’t have policies or processes in place that really allowed employees to take paid time off to care for a loved one.
We’ve seen a huge growth in the number of enterprises offering paid family care benefits. But there are still gaps that need to be addressed. The biggest one is the lack of education that employees have regarding their organization’s leave benefits. Employees want to know precisely what benefits are available to them, where they can go to find out more about them, and how to claim these leave benefits when they need them.
For 2022, the top two leaves are paid leave and mental health. With an increased awareness of how emotional distress can be just as debilitating and in need of care as physical illness, more employers are recognizing that some employees will need time off to look after their mental well-being. After all, chronic stress, burnout, anxiety, and depression can all make normal levels of productivity difficult to achieve.
Fewer Organizations Offering 401(k)s
We have seen a trend of several employee benefits being reduced by organizations, the main one being 401(k) plans. In 2020, 7% of employees said their organization cut back on this benefit.
Scaling back benefits is typically done as a cost-cutting measure, although in the case of 401(k) plans it is possible this was also done to favor plans that allow better access to savings in an emergency, such as a health savings account (HSA). Moreover, we have seen a 4 point rise in employers offering Roth 401(k)s, which allow tax-free withdrawals, which may indicate that these investments are more appealing to employees than a 401(k) in the context of an uncertain economic climate.
It should be emphasized, however, that reducing benefits is relatively rare, and the reductions are usually not significant.
medZERO, while not an employee benefits package itself, can be used as a means to enhance access to all the supplemental benefits we have outlined. As we have seen, accessibility is one of the key obstacles that both employees face when it comes to making the most out of their benefits. In addition, medZERO works with any benefit plan, any provider, and any HSA.
