January 24, 2021
Throughout the past year, many of the challenges that began during the pandemic continued to influence both our personal and professional lives. The health and safety of workers remained paramount and affected the decisions companies made in regard to vaccination policies and returning to the office. Many companies opted to continue working remotely, responding to the needs of their employees. The “Great Resignation” and the shortages in labor and supplies, as recently discussed, also generated upheaval in our daily lives.
In looking ahead to 2022, here are the top four trends that will have the greatest impact on benefits administration:
Increase in costs
Over the past year, the effects of inflation have touched every aspect of our lives – from travel to groceries to gas prices. In 2022, costs are projected to continue to increase, especially when it comes to health care. According to a study by PricewaterhouseCoopers, health costs in 2022 will increase 6.5%, affecting employers and employees alike.
To protect bottom lines and ensure sustainability, many companies will have to pass on at least a portion of the increase in health-care costs to employees. Employees will not only experience higher costs when electing medical insurance but will also incur higher out-of-pocket costs for services. One trend we may see as a result of increases in health-care expenses, is more employees electing a high-deductible health plan and participating in a health savings account.
Personalized benefits package
When it comes to employee benefits, companies are learning that one size does not fit all. “In general, employees are looking for greater security, but what that means varies by employee based on age, gender, salary and other factors,” says Jennifer DeMeo, a senior director with consultancy Willis Towers Watson in Washington, D.C.
Employees are looking at benefits that address their specific needs and do not want to pay for coverage that does not apply to them. For instance, younger employees are more likely to value employer-sponsored pet insurance. When companies offer a variety of benefits to choose from, employees get the plans they want, and, in turn, employee satisfaction and retention increase. In addition, employers save money by eliminating wasteful spending on unwanted or “irrelevant” benefits.
Continued spotlight on employee well-being
Well-being has been on the rise over the past several years, and in particular, throughout the pandemic. The rise in stress, mental health issues, and burnout has necessitated a greater emphasis on well-being. While physical well-being has traditionally been the focus, many companies are shifting their attention to mental and financial well-being.
Studies have shown that millions of people worldwide are reporting high levels of stress in mental and financial health. In fact, finances are the number one source of stress for 73% of Americans, according to a 2021 CreditWise survey. Even greater are the percentage of employees (75%) who say they have struggled with anxiety caused by COVID-19 and other world events while working from home.
Companies are responding to these needs by offering enhanced child-care support and programs that address emergency savings, debt management, and budgeting. While these enhanced benefits help employees, they also reduce employer overhead, as stress has been shown to cost employers 13-18% of an employee’s annual salary.
By offering financial well-being tools and training, such as retirement savings plans, emergency savings funds, safety net insurance, and financial coaching, employers empower their workers to make lasting, positive changes. In a recent study, the Society for Human Resource Management (SHRM) found that these programs improve the overall well-being of employees, increase employee retention, and attract new hires.
One of the main drivers behind the Great Resignation is the need for work flexibility. Employees have been vocal about their desire to continue working remotely and to have a more flexible schedule in order to accommodate family needs. Work flexibility has become just as important to workers as pay, and people are willing to leave their jobs in order to work for a company that offers it. In fact, 59% of people were more inclined to choose a job that allowed them to work from home.
A recent study by Mercer found that work productivity over the past 18 months has been the same or higher even in a remote setting. Employees also enjoy savings in both time and money. By working remotely, the average employee saves 40 minutes of commute time and around $500 a month.
Overall, the companies that will thrive and retain their talent in 2022 will be the ones that adopt creative solutions and offer employees a holistic work culture that provides for their needs in the workplace and at home.
How BenefitElect Helps
BenefitElect’s nimble technology is uniquely positioned to address the latest trends in employee benefits. Companies that use BenefitElect to manage benefits administration experience lower costs, greater flexibility, and higher levels of employee engagement and retention, as shown in our case studies.