How benefits can meet employees’ evolving needs in 2024

Companies and employees have been through a chaotic few years: the shift to remote and hybrid work, economic volatility (particularly surging inflation), and AI’s rapid acceleration have permanently changed the workplace. Neither HR teams nor employees can’t assume things will stay the same.  With many employees heading back into the office, inflation steadily decreasing, and the difficulty of predicting the adoption of AI, flexibility will remain critical in 2024.

From providing benefits that meet employees’ individual needs to learning and development (L&D) resources that will help employees prepare for a changing global economy, HR teams are responsible for anticipating the major trends that will affect their workforces. While there are some encouraging economic indicators (such as stabilizing inflation), the risk of recession remains high, and many employees suffer from rising indebtedness, the reimposition of student loan payments, and high interest rates. Employees also face widespread disruption driven by AI and economic competition from abroad.

HR teams must proactively address these obstacles to maximize the value of their human capital. When HR teams focus on their diverse workforces’ unique concerns and priorities, they will help employees navigate perilous economic terrain while improving morale and productivity. This will be a key competitive differentiator in 2024 and beyond.

Helping employees adapt to new economic realities

One of the most significant challenges HR teams will face in 2024 is the existence of skills gaps that prevent employees from fully leveraging new technology and doing their best work. Over two-thirds of C-suite executives say their organizations confront skills gaps, while the World Economic Forum estimates that 60% of workers will require training before 2027. While this may seem daunting for HR teams, it also presents an opportunity to build more resilient and productive workforces.

Almost three-quarters of employees say they’re ready to learn new skills or completely retrain. Employees recognize that professional development is the key to promotions and other growth opportunities within a company. This emphasis on L&D won’t just benefit employees, either; according to a 2022 LinkedIn report, companies that excel at internal mobility keep employees around for roughly twice as long as those that struggle with it. This gives companies a competitive advantage when there are more job openings than employees available to fill them.

The demand for L&D programs is part of a larger trend toward flexibility in the workplace. While equipping employees for an evolving economy is indispensable for improving performance and retention, HR teams also have to focus on providing flexible benefits and other direct forms of support to increase their workforces’ overall wellbeing. Just as employees are willing to be flexible with their skills and responsibilities, HR teams must ensure their benefits are as personalized and adaptive as possible.

Why flexible benefits are essential for today’s workforce

A central theme of the upheaval many workplaces have experienced over the past several years is the demand for greater autonomy and flexibility from employees. The COVID-19 pandemic showed employees that they can adapt to radical changes in how and where they work, which has led to a permanent shift in expectations and demands. A recent McKinsey survey found that 87% of employees say they would be more productive if they could work their “desired number of days at home,” while 10% will likely leave their jobs if forced to return to the office full-time.

The focus on flexibility isn’t limited to remote and hybrid work: 83% of millennial and Gen X employees want on-demand pay, flexible spending accounts are gaining popularity, and workers are increasingly interested in other flexible benefits such as convertible PTO. Additionally, employees realize that existing benefits aren’t meeting their specific needs. A 2023 Pew survey found that less than half of American employees take all their available PTO, while our own research found that employees feel pressure to continue working even while on vacation.

These are all reminders to HR teams that they need to rethink how they approach employee benefits in 2024. Employees have demonstrated that they are open to learning new skills, switching roles, and adapting to changing economic circumstances, so companies should also offer flexibility. This means HR teams should invite employee feedback and provide benefits that will meet the diverse needs of their workforce.

What HR teams should expect in 2024

Several trends will likely have a significant impact on employee benefits in 2024. While the labor market remains tight, it has been slackening for several months – a correction that will probably continue for the foreseeable future. The IMF recently cut its 2024 growth forecast, which could pressure companies to pull back on hiring and salary increases. Companies will attempt to reduce expenses by offering more voluntary benefits (the costs of which are shouldered by employees) and reevaluating their current benefits packages.

Although office attendance remains 30% lower than before COVID-19, and many companies have embraced remote/hybrid work, 68% of companies are considering or implementing strategies to get employees back into the office. For many HR teams, this has created huge problems – 71% of companies that require on-site work struggle to retain employees, compared to 46% of companies that offer employees a choice. As companies increasingly ask employees to return to the office, they must provide other flexible benefits to offset this demand – from more adjustable hours to convertible PTO.

Read more: FSAs: A smart way for employees to save for their wellbeing

The workplace constantly changes, and employees have clarified that they no longer accept the status quo. As HR teams attempt to navigate yet another series of workplace transformations, it’s their responsibility to help employees prepare for whatever 2024 will bring. This means equipping employees to succeed in an increasingly skills-based global economy and meeting their unique needs with flexible and holistic benefits.

Rob Whalen, co-founder and CEO of PTO Exchange