The pandemic, hot job market, a DEI focus and more are driving a surge in employers planning to adjust their strategies.
An overwhelming number of employers are planning a revision of their benefits strategy, new research, a change fueled by a hot job market, rising benefits, diversity efforts and the ongoing pandemic.
Consulting firm Willis Towers Watson found in its new annual performance trends survey that more than two-thirds of employers (69%) plan to differentiate and adjust their benefit programs over the next two years, up from 23% today. Almost three out of four respondents (73%) name an increased focus on DEI as a driver of their performance strategy, followed by tense labor markets (53%) and rising performance costs (50%). The survey results are based on responses from a total of 3,642 employers worldwide, including 359 US employers with five million employees.
“Events over the past year have accelerated many changes already underway,” said Jennifer DeMeo, retired senior director, Willis Towers Watson. “The pandemic and economic uncertainty have highlighted the importance of emotional well-being and financial resilience and the connection to worker engagement, as well as the benefits of flexible offerings, virtual care and online tools and resources. Employers plan to revise and adapt their offerings to better tailor them to company and employee needs and have indicated that there is no going back. “
The desire to change social benefit strategies also comes from the fact that employers admit that many of their offers are inadequate. The Willis Towers Watson study found that only half (51%) of employers believe their benefit programs are tailored to the individual needs of their workforce, and even fewer (39%) offer significant flexibility and choice of benefits . While eight in ten employers (81%) say they currently offer competitive benefits overall, only a quarter of respondents (26%) rate their wellbeing performance as market-leading or better than other companies. Less than half (47%) consider their core benefits (health and retirement) to be better than those of other employers.
Of the changes, more than two-thirds of respondents (69%) state that integrating employee well-being into the service package will be the most important strategic performance goal over the next two years. Most employers (86%) name employee emotional wellbeing as their top priority over the next two years, followed by physical wellbeing (68%) and financial wellbeing (67%).
Mental health was perhaps the biggest focus in performance strategy over the past year, with employers focusing on additions and improvements to programs and resources to help workers struggling with stress, anxiety, and other issues in the face of the COVID-19 pandemic to have.
“The importance of the general wellbeing of employees is being recognized much more, with mental health and emotional wellbeing high on the list of priorities,” said Julie Stone, managing director of Health & Benefits, Willis Towers Watson.
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In addition, Stone said, with the rise of hybrid models, employers are rethinking their performance priorities and considering approaches that pick employees up where they are – like lifestyle accounts to support healthy meals at home (as opposed to an on-site canteen), home fitness equipment, and more more.
Willis Towers Watson’s results are in line with Gallagher’s latest findings that HR and talent managers can expect a sharp increase in voluntary exits as the economy improves, both current and future employees. In particular, the Gallagher research found that 71% of the nearly 4,000 employers surveyed see medical and pharmaceutical services as key benefits in combating what Gallagher called the “talent tsunami”. And 41% of employers surveyed said they added more or different voluntary benefits this year to meet hiring and retention goals.
Related: Can social benefits help fight the “talent tsunami”?
“This is one of the most complex job markets in history,” says William Ziebell, CEO of the Benefits and HR Consulting department at Gallagher. “Our economy is growing, but companies are struggling to fill positions and putting employees in the driver’s seat. Decision-makers who base their comprehensive benefits and HR offers on data and analyzes and who effectively communicate their benefits and remuneration strategies will position their company successfully today and in the future. “
Stein agrees. “Employers recognize that the range of benefits and the way employees engage can be a competitive advantage from a talent acquisition and retention perspective,” she says.
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Kathryn Mayer is the performance editor of HRE and chair of the Health & Benefits Leadership Conference. She has covered accomplishments for nearly a decade, and her stories have won multiple awards including a Jesse H. Neal Award and honors from the American Society of Business Publication Editors and the National Federation of Press Women. She holds bachelor’s and master’s degrees from the University of Denver. She can be reached at [email protected]