Employee benefits have gained attention over the past few years, and rightly so. Today’s workforce understands the importance of basic healthcare, and the advantages of working for an employer that offers other types of benefits that support their lives outside work. As we enter another new year amid high turnover and continued talent shortages, offering the right types of benefits can make a world of difference in retaining top talent and attracting the right candidates.
The 2023 Employee Experience Trends report by Qualtrix, based on a survey of nearly 30,000 full and part-time workers across 27 countries and 28 industries, listed pay and benefits as one of the top drivers of Intent to Stay. However, only just over half (57%) of employees surveyed are satisfied with their pay and benefits, down from 67% in 2022. This mismatch provides a ripe opportunity for employers to revamp employee benefits programs and add more attractive perks that can increase employee engagement and retention.
We’ve identified five key trends in employee benefits for 2023. They are:
- Personalization. Employees want the power to choose how to support their well-being. Letting employees choose benefits that best fit their age, family situation, and habits with vendorless, lifestyle spending accounts or reimbursable employee perks is an effective, empowering way to provide support for all employees.
- Lifecycles. Employee benefits should address the needs of your team members at different stages of their lives. This means offering benefits that appeal to people regardless of whether they have children, aging parents, pets, or no dependents at all, as well as benefits that support specific life circumstances.
- Consolidating benefit tools. Fewer benefit tools make it easier for employees to use their benefits while cutting costs for administration. Using effective, efficient tools can help improve employee utilization and boost your ROI.
- Unique benefits. Offering benefits employees can’t get just anywhere is a competitive advantage. By tailoring your benefits offerings to employee needs and company values, you can foster a more inclusive culture and strengthen your employer brand.
- Rewards & Recognition. These types of perks are often undervalued, or even totally overlooked, by employers in discussions around benefits offerings.
Read on to learn more about each of these trends, how to choose the right benefits for your organization, and how to design a benefits program that truly helps employees support their well-being.
What benefits do employees value most in 2023?
In an uncertain economic environment, many HR teams are tasked with the need to trim budgets, while the pressure to deliver the most desirable benefits and perks mounts. Fortunately, many of today’s most sought-after employee benefits and perks are low or no cost. People in today’s workforce value work-life balance in the form of flexible and remote work, unlimited PTO, parental leave, and other benefits that help them better manage their life and responsibilities outside work while reducing stress. After health-related benefits, according to SHRM’s 2022 Employee Benefits Survey, the most important employee benefits are leave benefits, retirement savings and planning, family care benefits, and flexible work arrangements.
Personalization of Employee Benefits
Historically, benefits offerings have been general and (ideally) universal. Think about group health insurance policies that provide equal coverage for every employee and access to the same pool of services, whether they are relevant or not. Those types of benefits are still essential but now they provide a foundation on which personalized benefits offerings can be layered. Lifestyle spending accounts are one of the most flexible, personalized options available today.
Supporting Employees throughout Stages of Life
Everyone wants access to employee benefits that are relevant to their life’s needs and challenges—and those needs and challenges change over time. To keep employees engaged with their benefits as they age (which can boost retention), it’s crucial to offer a variety of employee benefits that address different needs for different stages of life. Many employers offer some type of family benefits such as parental leave and even adoption and fertility services—but these benefits don’t appeal to older employees or those who choose not to become parents. So it’s important to think about the type of services and support they might need. Increasingly, employers are offering elder care and/or bereavement services, which might be utilized more by older employees but could certainly benefit people of all ages.
Consolidating Benefit Tools
People ops teams can easily cut costs by evaluating their tech stack for utilization and ROI. Explore what employees want in your benefits and fringe benefits program by reviewing the market research and by asking your employees. By offering more of the benefits and perks they seek, utilization will increase, thus boosting your ROI.
With global healthcare benefit costs expected to jump 10% in 2023 according to WTW, organizations need to find new, creative ways to get more out of their benefits platforms, and consolidating tools (with the right offerings) is a straightforward path to that goal.
Offering Unique Benefits
Employee benefits are an area where creativity can be a competitive advantage. In a survey of 2,000 workers, Fractl found that 88% of job seekers give "some consideration" or "heavy consideration" to better health, dental, and vision insurance benefits when choosing between a high-paying job and a lower-paying job with better benefits. And according to research by BenefitsPro, in-office perks like free coffee are declining in popularity, while more flexible options are gaining ground, such as identity theft insurance (34%), estate planning services (17%) and paid leave to vote (38%) as well as other family-friendly offerings.
This suggests that job seekers and current employees alike are paying a lot of attention to your benefits offerings. Unique benefits are tailored to employee needs and company values, such as gas stipends or health and wellness stipends.
Employee Rewards & Recognition
An effective rewards and recognition program can improve your organizational culture, enhance the employee experience, and boost retention. Adopting a platform to manage that program across your entire organization helps create consistency and fairness while allowing for even more employee engagement with peer-to-peer recognition.
Rewards and recognition have come a long way since the days of paper certificates and engraved desk clocks. Today, the best ways to reward and recognize employees—for length of service, for accomplishments, for embodying your culture—are spot bonuses, travel perks, and extra time off in the form of floating holidays or extended sabbaticals.
Conclusion
Today’s employees want greater flexibility and choice. To keep employees engaged and attract top talent, employers must offer employee benefits that address the whole well-being of their people. Offering flexible, personalized perks such as lifestyle spending accounts, and adopting a platform that helps you administer your benefits programs with ease, can increase utilization across your program and boost the return on your investment.
What’s next? Employee stipends are a high-impact addition to your employee benefits program. Learn how to build a perks program that your employees will love.