2023 employee benefits predictions: A Q&A with Barrett Scruggs

A new year always brings new thoughts on what will be the latest and most used employee benefits. With a looming recession, financial wellness is a top thought, along with affordable health care. However, wellbeing and DEI benefits will become quite popular, according to Barrett Scruggs, VP of Workplace Financial Wellbeing at SoFi at Work.

Scruggs believes DEI benefits, financial wellness, and wellbeing benefits will be the most popular and the most need benefits for employees.

Which benefits are most important for employees right now?

Recently, we’ve seen an increase in personalized wellbeing benefits due to the current employee-centered job market. Employers are finding that employee’s value their financial wellbeing benefits as a top priority. A recent Sofi at Work study found that 84% of employees say that financial wellbeing benefits have a large impact on their overall wellbeing, job satisfaction and engagement. In fact, 2 out of 3 workers (68%) would sacrifice at least one other key benefit to keep their financial benefits.

Other wellbeing benefits that have proven to be valuable to employees are mental health and flexible work benefits. Although wellness programs existed before the pandemic, the global health crisis has made many employees prioritize their health even more. According to a survey conducted by the APA, 81% of individuals say they will be looking for workplaces that support mental health when they seek future job opportunities.

Which benefits will be the hardest to keep with a possible recession?

High-cost benefits will be the first to be evaluated and hardest to keep unless they can illustrate clear impact on retention or team morale. Health insurance is typically the most expensive part of any benefits plan. We saw more companies paying 100% of insurance for their employees in 2022. While companies won’t do away with insurance coverage, we may see them pull back on this offering in the new year. Other benefits that are seen as costly without a clear impact will also be difficult to maintain, this includes things like free food, company trips and subscriptions to apps.

I recommend HR leaders and companies look at ways to scale back current offerings as opposed to cutting them completely. There is often a way to shift benefits or reduce frequency so that team members don’t feel like something they valued is gone completely.

What benefits do you think will be the most important to keep in 2023 in order to retain employees? 

Diverse, equitable and inclusive benefits will be key themes in retaining talent this coming year. With recent cutbacks, we’ve seen many companies’ DE&I initiatives fall short on their promises, especially in the tech sector. This has had a direct impact on recruiting and retaining top talent. ADP’s annual People at Work Study for 2022 showed that 76% of employees would consider seeking new employment if they discovered an unfair gender pay gap or lack of a DE&I plan at their company.

To retain employees, companies should not make budget cuts towards their DE&I plans and benefits. In 2023, employers should increasingly focus on creating more equitable and inclusive benefits that hit on the needs of all talent – not just their core talent pool. Offering personalized, flexible wellbeing programs like education assistance and tuition reimbursement tailored to meet employees’ needs will result in increased employee satisfaction, engagement and retention.

Additionally, broadening benefits like emergency savings and retirement funds will be essential in retaining a diverse group of employees, since employees from all backgrounds and stages of life can take advantage of them.

Do you think employees and employers are on the same page when it comes to benefits that are wanted the most? What are your suggestions for staying on the same page?

As the job market has increasingly become more employee-centered, companies’ have aligned with their employees on what benefits are most important. According to the Sofi At Work study,  84% of employees believe their employers should be responsible for their financial wellbeing – and many leaders agree. Seventy-three percent of leaders feel companies should be required to offer financial wellbeing benefits.

To maintain alignment with their employees in terms of benefit priorities, it’s essential for companies to offer customized packages to meet all employees’ needs. The challenge for organizations is in offering meaningful choices without overwhelming their employees. Focus groups and surveys can help employers better understand their employees and what range of benefit options will allow for personalization without overload.

What is your overall 2023 prediction for employee benefits?

Headlines and fear surrounding the recession has led companies and HR teams to reflect more deeply on their hiring policies, employee benefits and retention rates. However, despite economic concern, the job market is staying strong and we’re still in an employee-driven market.

While recession fears may cause some companies to cut benefits, it’s important for employers to keep their benefit packages strong if they still want to attract and retain top talent. In 2023, we will see benefit themes that support three main initiatives: reducing attrition, attracting critical talent and building an inclusive and diverse workforce.

Companies will provide more inclusive benefits that don’t just hit on the needs of their core talent. We’ll see emergency savings, retirement planning and student loan benefits expand in new ways. 2023 will be a year for re-evaluation — but HR leaders and teams should let employee wants and data lead the way — not fear.