In the competition to recruit and engage talent, the edge goes to employers who pay attention to what their people need.
The U.S. Department of Labor reported that 48 million employees quit last year, and this trend continues. With inflation eating ever more deeply into the pockets of American workers — the financial pressures they face are among the top reasons
They're not just looking for higher wages (though of course, many are); they're looking to be treated as valued individuals with a stake in the enterprise. Employers who understand the importance of caring for employees as people first — and acknowledging their varied needs — can better differentiate themselves amidst the escalating competition for talent.
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In recent years, well-being programs have expanded well beyond health-focused wellness to include financial well-being. Employers seek to support employees with not just retirement savings but addressing day-to-day concerns and distractions, with solutions focused on improving budgeting, reducing student loan debt, increasing emergency savings and more. As organizations emerge from the pandemic, many are looking to add benefits that can support emerging employee needs or fill gaps in current offerings that support financial well-being, improve physical health, and address anxiety and stress. Progressive employers also are responding to employees' expectations of greater flexibility and choice. These trends are more than a "nice to have" shift. According to Buck's Global Well-being and Voluntary Benefits Survey 2022, a full 79% of American employees indicate they want more resources from their employers to help meet their financial and emotional health needs.
1. Life out of balance: Support for mental health
The struggle with stress is real. According to the
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Mental well-being support begins with, but extends well beyond, Employee Assistance Programs. This includes access to in-person counseling as well as online therapy and apps that can support self-care and resilience, and education about symptoms ranging from stress and turnout, to mental illness. While education is important, easy navigation of the mental health care system is just as vital. Make sure employees know where to find the "front door" to the right level of care. And ensure managers have training and insight needed to enable a supportive environment.
2. Life "out of office": Support for flexibility
Employees who have more control over their work schedule are less likely to feel overwhelmed and stressed out. This goal may require revamping the company's PTO policy to recognize the need for occasional "mental health days" and providing more flexibility in working hours — including, as some forward-thinking organizations have done, offering a four-day work week.
Based on a December 2021 survey by i4cp, nearly 60% of total employers surveyed began offering hybrid and/or remote work options at the onset of the pandemic. Currently 6% don't offer hybrid and/or remote work options, 9% have done so for more than ten years, and the remaining employers offered one or both options prior to the pandemic but for less than 10 years.
When asked to look ahead 12 months, 30% of employers will retain the current workplace arrangements:
- 33% of employees on site
- 34% of employees working a hybrid model
- 46% of employees working remotely
More than 44% of employers said they will shift more or significantly more employees to hybrid and/or remote work options, and approximately 18% of employees will be bringing employees back on site. Only 3.6% of employers will bring all employees back on site.
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The most important driver of the decision to offer continued and/or permanent hybrid and/or remote work options comes down to the positive impact on employee-related outcomes, like engagement, retention, well-being, and productivity, The bottom line: More than 90% of employers offer hybrid and/or remote work options and will continue to do so — because it's good for employees and for business!
3. Life out of pocket: Support for financial well-being
Employees also need more financial support from their organization: only 43% in Buck's survey rated themselves as "financially healthy" as against 66% of employers who think their workers are financially okay. More than a third of employees are unsure of how well they're managing their money. And 54% say they live paycheck-to-paycheck.
Traditional benefit packages often favor people with financial assets and have done little to help lower-paid employees reduce debt and boost savings. In some instances, even company-offered health benefits are beyond the financial reach of employees, with high deductibles that can deter some from seeking care. For younger employees, student loans or other debts can make it hard to save for retirement.
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Companies need to look at their own employee population data to uncover needs and consider adding benefits and programs that improve financial well-being based on employee life stage and other demographics. Programs need to be flexible to address individual needs — rather than relying on broad generalizations; for example, workers under the age of 40 place higher priority on day-to-day savings and family building benefits, while older employees are more likely to focus on investment de-risking and long-term planning such as long-term care readiness.
Progressive employers are taking steps to reduce costs or can help pay for unexpected costs like medical bills — putting money in employee pockets and providing better alternatives to address financial stress than employees could secure on their own. Voluntary benefits like emergency savings, personal loans, credit improvement, college savings, supplemental medical and long-term care have been some of the fastest growing benefits over the past two years.
While adoption of tax-advantaged savings plans like Health Savings Accounts (HSAs) continues to rise, Lifestyle Spending Accounts (LSAs) are also gaining in popularity. Offering an LSA allows employers to help employees with costs of common everyday life expenses. Employers are allowed full discretion regarding what expenses will be eligible to reimburse from LSA funds, because there is no set definition of how or for what the funds must be used. Generally, an employer will choose to offer a set annual LSA amount to cover non-medical wellness benefits.
Financial benefits of greatest interest to employees include financial wellness assessments, budgeting and money management tools, help to reduce debt and improve their credit scores, and retirement saving/readiness programs. Employees could use support for unexpected medical expenses, legal assistance, home ownership support, and utility bill savings.
These solutions can be provided through voluntary benefits and, in most instances, can address key financial well-being needs with minimal impact to employer budgets. It's no surprise that employees ranked these toward the top of the list in terms of benefits they would like their employer to offer.
3. Life out of character: Support for diversity, equity and inclusion (DE&I)
A real or perceived lack of Diversity, Equity and Inclusion (DE&I) is fueling the rise in job hopping. When a higher percentage of workers say their cultures, backgrounds, and unique identities are not respected, or their company is not committed to DE&I, or their company does not provide diverse offerings for a diverse workforce, they are more likely to want to leave the organization.
As cited earlier, 54% of employees report living paycheck-to-paycheck. But the percentage is significantly higher for Black (66%), Hispanic or Latino (56%), and other/native Americans (60%) employees. These findings indicate the importance of financial wellbeing programs that can help families budget and save.
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Working women, especially those with families to care for, face added barriers. Aside from the issue of compensation and flexible time-off policies, women especially need programs that help them manage elder and childcare support. Training and development programs are needed, to offer women a greater stake in the success of the business.
4. Life out of touch: Providing year-round communication
As voluntary benefits play a larger role in enhancing the employee value proposition, tangibly demonstrating a company's commitment to supporting the diverse needs of their workforce, it's important that businesses develop a robust communication strategy. Employees need a better understanding and ability to take advantage of available resources.
Buck's survey found that 45% of employees wish they had a better understanding of their benefits; this percentage increases with age, likely as understanding and/or needs increase. Although employees acknowledge that, ideally, they would have their benefits questions answered by HR or the benefits service center, their most commonly used source is friends and family — showing the importance of ease of access to trusted, accurate information from the company vs. external social sources.
On the bright side, the practice of integrating voluntary benefits with core benefits enrollment and communications has more than doubled in the past two years. Employers understand that ongoing, year-round communications, integrated with core benefits for emphasis, can have the most impact on voluntary benefit engagement and take-up.
Voluntary benefits are increasingly integrated within well-being strategies as more than a "one and done" message at new hire or annual enrollment. Employers have stepped up more frequent communications and new technology communication tools. These include personalized, highly relevant communications reflecting understanding of needs-based strategies, and ongoing/off-cycle communications, reflecting that need for year-round communications.
Regardless of the channel, communication must be relevant to be impactful. Effective communication requires analyzing the wealth of data on how employees access and use various wellness, benefits, and rewards programs.
Human-centered design, the process of building out the full user (in this case, employee) experience based on the people you're designing for and ending with interactions that are tailor-made to suit their needs, helps to achieve an audience-of-one focus that can increase employee engagement. Personalized models assure individual data, including past interactions, is used to create a meaningful employee experience with the right messaging and tone, delivered via the right channel.
A new imperative
Aside from pay, one of the strongest attractions to an employer is a robust benefits package and support for well-being. The voluntary benefits component of the company's overall compensation and benefits package used to be seen as "nice to have." No longer. As a way to support employee well-being that is cost effective for both the company and the worker, these benefits are a key solution to the struggles of workers and the competition to attract and retain talent.
As the high demand for talent continues to outpace the ready supply of workers, the imperative for employers is clear: Show — and prove — to candidates and existing employees the value of working for the organization. This is a "culture war" of a different sort, where what the employer has to offer often signals what the workplace culture is like — a prime opportunity to differentiate on the employer value proposition, attract top talent and retain those already on board.
