08/16/2022 | PCI HR Consulting Practice
The COVID-19 pandemic seems to have changed not just how employees work but how they think about work. This includes what benefits they believe employers should provide. For example, many employees prioritized health and leave benefits over retirement benefits during the pandemic. In 2022, employee preferences for benefits seem to be returning to what they were before the pandemic, with employees once again prioritizing retirement benefits and financial wellness. However, all forms of benefits are more important for employees now than ever before. This provides an opportunity for savvy employers to utilize benefits to attract and retain employees in a tight labor market.
Some employers are doing this by redefining employee benefits. Traditional benefits aim to protect employees and provide a safety net in case the worst happens. Offering these benefits led to employees easily forgetting about their employer-provided benefits until they were needed. As a result, many employees did not fully appreciate the benefits provided by their employer, despite their high costs.
Now, many employers are restructuring their benefits to provide the most value to employees. Restructuring benefits means prioritizing and personalizing benefits to meet employee wants and needs, allowing employers to leverage their offerings to improve employee health, boost morale, and increase attraction and retention without increasing costs. Prioritizing benefits that provide valuable care serves employers as well as employees; asking employees which benefits they need and want empowers employers to know how best to restructure benefits. Ultimately, employers will want to personalize their benefits offerings according to their employee’s unique desires and needs. Not only will this help employees be more knowledgeable about their employer-provided benefits, but it will also likely increase their utilization and appreciation for those benefits.
Personalizing benefits can play an important role in employers’ retention strategies, especially as budgets tighten. For example, financial security and professional development have increased in importance for employees in 2022. In addition to a culture of professional growth and development, building a comprehensive financial wellness program that prioritizes employee financial security can go a long way toward gaining employee trust and loyalty.
Benefits are typically employers’ most expensive budget item after wages. By redefining benefits to adjust to employee preferences, employers can help keep employees healthy and happy as well as maximize their offerings to stand out in a tight labor market. Employers can consider how best to restructure their benefits to address their current labor concerns.