Pandemic-prompted shifts in employee benefits might stick

Employees increasingly are looking for more family planning options, mental health solutions, additional paid holidays, enhanced retirement benefits and workplace diversity as the economy comes out of the pandemic.

The increasing attention paid to employee benefits reflects their rising value to employees, according to a survey from Prudential conducted last fall. Three quarters of people surveyed at that time agreed with the statement, ”Due to the pandemic, I feel that access to benefits through an employer is now more important than ever before.”

The value that’s increasingly placed on employee benefits is also revealed in the findings of Sequoia Consulting Group’s more recent 2021 Employee Experience Benchmarking Report. Among the findings noted are these results:

1. Between the stressors of the global pandemic and a changing workforce, companies are investing more in mental health and family friendly benefits.

• There was a 50 percent growth in the number of companies strategically focused on employee emotional health in the past year.
• Forty-four percent of companies offer fertility benefits, and another 9 percent plan to offer fertility coverage in the next 12 months.
• Sixty-four percent of companies offer advanced fertility benefits, and surrogacy and adoption benefits are emerging in popularity, with 9 percent offering one or both benefits.
• One-third of companies have “forced vacations,” and 20 percent have annual company shutdowns.

2. The inequitable effects of the pandemic and spotlight on racial justice brought a renewed focus on DEI. 

• Seven in 10 companies have rolled out new DEI programming over the last year to create a more inclusive culture.
• Ninety-six percent plan to expand their talent outreach strategies to build a more equitable workplace.
• Forty percent have employee resource groups, which is a 9 percent increase from last year.

3. Supplemental benefits no longer are considered just nice perks, and retirement benefits are becoming more competitive.

• Fifty-six percent of companies use automatic enrollment for 401(k) plans, trending up significantly from five years ago (33 percent)
• Nearly half offer 401(k) matching to employees, with another 13 percent planning to add or increase their match in the next 12 months
• More than a third of companies have 401(k) plans that include environmental, social and governance funds, of which 31 percent added the funds in the past year

“Each data point is interesting on its own, but a holistic examination of the trends tells a story that companies are being more mindful of how employee experience and flexibility can be successfully integrated into their policies and culture,” said Michele Floriani, chief marketing officer for Sequoia. “Clients are telling us, as they come out of the most challenging year in a generation, that changes initially brought on by temporary necessity now make for good permanent solutions.”

READ MORE:

• What will ‘normal’ look like in 2021?
• 12 reasons why clients leave and what you can do
• How COVID-19 accelerated a digital revolution in insurance