Insight One
Overall, companies are adding or improving benefits to attract and retain employees, and wellness benefits top the list.
The biggest reason for adding or improving benefits is to attract and retain employees, with employee demand also figuring highly in benefits leaders’ decision making.
About two-thirds of organizations are improving bonuses and base salaries, but about half are improving healthcare coverage, 401(k) matching, professional development, sick leave, and paid time off, and about one-third are improving various benefits such as Health Savings Accounts and Emergency Savings Accounts.
Reasons for new benefits
The biggest reason for adding or improving benefits is to attract and retain employees, with employee demand also figuring highly in benefits leaders’ decision making.
Attract and retain employees
Employee demand
Parity with industry competitors and peers
Budget
Broker recommendation
of organizations that have been in business less than 10 years are adding or improving benefits.
The most common benefits companies are adding in the next year are wellness benefits, bonuses, and Emergency Savings Accounts.
About one-in-four organizations plan to add one more of the following benefits in the next year:
- Wellness benefits
- Bonuses
- Emergency Savings Accounts
About one-in-five organizations plan to add:
- Pet insurance
- Professional development
- Paid time off
- Lifestyle Spending Accounts
of organizations have improved benefits to attract and retain employees in the past 12 months
What benefits have improved?
Retirement matching, healthcare, and PTO are the most popular benefits, but wellness benefits and flexible work arrangements are also very popular.
Larger organizations with 250+ employees are more likely to offer a variety of benefits, such as Lifestyle Spending Accounts (LSAs), pet insurance, or medical travel reimbursements (MTAs). In addition, companies with a progressive benefits approach, as well as companies that have been in business for over 10 years, are more likely to offer various benefits.
Offer 401(k) matching, paid time off, and/or healthcare coverage
Offer wellness benefits
Offer remote or flexible work
Removing benefits is less common, and is often driven by cost.
Although 1-in-5 benefits leaders report that they are removing benefits, companies that have been in business for less than 10 years were more likely to report they are adding new benefits, they are also more likely than longer tenured organizations to report they are removing benefits. This indicates younger organizations are working to figure out the best combination of benefits for their employee base.
Reasons to remove benefits
Budget or cost
Low employee utilization
Leadership request
of benefits decision makers report their organization has removed benefits in the last year.
Analysis and action items
Despite a fluctuating economy and workforce, offering desirable benefits remains as, or more, important than ever. As companies and their people continue to feel the pressure from inflation and rising costs, the right benefits can help ease employees’ financial stress by making daily expenses more affordable.
While bonuses, base salaries, 401(k) matching, and healthcare are benefits staples, and are expected form most employees, employers are also offering more specialized, yet flexible, benefits to help meet specific employee needs. These benefits, such as Health Savings Accounts, Lifestyle Spending Accounts, and Emergency Savings Accounts, enable employees to afford everyday expenses and build a safety net for the future.
Action items for HR leaders
- Conduct a benefits audit: What are employees using most or least?
- Check what you offer against the market: Are there benefits you don’t yet offer that employees expect and would add to your teams’ quality of life, such as Emergency Savings accounts or wellness-oriented Lifestyle Spending Accounts?
- Consider adding or improving your wellness offering with a Lifestyle Spending Account, which enables employees to choose how they want to spend their wellness dollars, leading to higher account utilization and happier employees.
Action items for brokers and consultants
- Assist your clients with conducting a benefits audit to discover what employees are using most and least.
- Discuss with your clients what other companies of their size and scope are offering and analyze how their benefits package stacks up and understand how it is, or is not, meeting their goals for employee recruiting and retention.
- Discuss adding or improving Lifestyle Spending Accounts with your clients and demonstrate how these employer funded, post-tax accounts can help flexibly meet employee wellness needs and boost benefits utilization and employee retention.