No matter how you slice it, businesses across all industries are facing a convergence of challenging dynamics.
Employee benefits and talent management are increasingly complex because of changes in employee expectations, an increased emphasis on well-being, and the differing needs of a multigenerational workforce.
Inflation and rising healthcare costs create additional pressures for both employers and employees.
Employee benefits still matter—a great deal. That’s why it’s essential to move beyond the one-size-fits-all benefits package, which falls short in addressing the most critical gaps between what employers are offering and what employees want. Investing in the right benefits can drive better outcomes—for your employees and your business.
Here are the top five key trends to watch and the impact they can have on employee benefits.
TREND #1
Strengthen Retention and Build Loyalty
Attracting and holding onto the right talent is harder than ever before. Employees are rethinking their relationship with work and its place in their lives. In addition, employee satisfaction and loyalty rates have rapidly declined, and millions of employees are actively testing the job market. These changing employee expectations and attitudes toward work are reshaping the dynamic between employee and employer—truly jeopardizing retention and tossing loyalty out the window.
Impact on Benefits
Enhancing employee benefits with the right solutions can help employers attract and retain talent. In addition, innovative benefits provide lasting value that can help build relationships and boost loyalty.
The right benefits help employers:
- Enhance compensation tax-efficiently*
- Provide targeted benefit enhancements for specific segments of employee population
- Make employees feel rewarded with more value than a one-time bonus* (which is soon forgotten about)
Two out of three employers plan to enhance benefit offerings in 2023 to attract and retain talent. (Mercer, 2023)
*This is not local, state, or federal tax advice as each person and each company are unique. It is recommended that you seek the independent counsel of a professional tax advisor.
TREND #2
Addressing Affordability
Rising healthcare costs have increased employees’ out-of-pocket costs, contributing to financial strain. Paired with high inflation, this has employees feeling the pinch. Many employers are focusing on improving healthcare affordability—for their own budgets as well as for employees—but doing so requires striking a delicate balance.
Impact on Benefits
As healthcare costs have risen, employers have shifted more costs to employees in higher premiums and higher deductibles. Many employees struggle to pay even for routine medical expenses, leading to delays in care. This cost-shifting has created unintended consequences that can end up costing employers more in the end.
The right benefits can help employers:
- Supplement primary plans with valuable complementary insured coverage, helping to close coverage voids and reduce financial strain.
- Improve affordability for everyday medical, prescription, dental, and vision expenses— even some expenses not covered by the primary plan.
- Address common problems with health savings accounts (HSAs), including timing issues or insufficient funds.
45% of employees would not be able to immediately afford a surprise medical bill of $500. (KFF, 2020)
TREND #3
Flexibility and Customization
One size doesn’t fit all when it comes to today’s workforce— which now includes five generations of workers. The reality is employees have different benefit requirements at different stages in their
lives, and it is difficult and cost-prohibitive to meet them all with a single primary care plan. Employers no longer manage a single heterogeneous workforce, and their benefit plans need to adjust to this new reality.
Impact on Benefits
It is essential for employers to better understand what really matters to different segments of their employee population.
The right supplemental health insurance plans give employers the flexibility to tailor benefits to meet specific needs—as well as the individual expectations of their workforce. This in turn can help employees feel more valued and understood.
Adding supplemental health benefits can help employers:
- Balance coverage and cost
- Provide age-and-stage health benefits relevant to different generational needs
- Enhance satisfaction with benefits: a leading driver of job switching considerations
Holistically healthy employees are 74% more likely to be satisfied with their job. (MetLife, 2022)
TREND #4
Supporting Mental Health & Well-Being
Supporting employee well-being continues to be a high priority. Employers are expected to recognize and meet the needs of the whole employee and to adjust benefits
and wellness programs accordingly. This is a fundamental shift from the traditionally more transactional approach.
Impact on Benefits
Supporting holistic employee well-being is a win-win, as it’s both the right thing to do and good for business. Happier, healthier employees are more productive and more likely to stay.
Whole employee benefits provide:
- Support for employees experiencing workplace stress (even healthy employees)
- Enhanced access to care with coverage and support for behavioral health, counseling, coaching, and more— including virtual care and telemedicine
- More valuable insured coverage to support preventive care as well as routine and everyday medical needs
- Ongoing reminder of employer appreciation
80% of employees report that workplace stress affects relationships with friends, family, and coworkers. (MHA, 2022)
TREND #5
Family-Friendly & Reproductive Benefits
Family health and reproductive benefits have become a priority for employees. Many employers are focusing on ways to support reproductive healthcare or are even looking to expand family-friendly benefits.
Impact on Benefits
Enhancing or expanding family-friendly benefits demonstrates employers’ emotional and financial support for employees’ families or for the desire to create a family.
The right benefit solutions can help employers:
- Provide access to fertility treatment coverage
- Address affordability and reduce financial strain
- Strengthen loyalty
In 2023, one out of three large employers will offer benefits including access to fertility treatment coverage, adoption, and surrogacy benefits. (Mercer, 2023)
Finding the Right Benefits Balance
We’re still in a period of flux, with new norms and emerging trends continuing to shape the workplace in 2023. Moving beyond the one-size-fits-all approach to benefits can help employers stay on top of changing employee expectations and benefit needs. Contact your Leavitt Group insurance advisor to learn more about options available for your employee benefits plan.
