The future of employee benefits
Gethin Nadin, Award-winning psychologist, Bestselling HR author & Director, Employee Wellbeing at BenefexDownload the editorial
The pandemic has changed the world of work changed beyond recognition.
To those of us paying close attention, much of that change describes the acceleration rather than the emergence of existing trends, but it does all add up to a fundamental shift in the relationships between employees, employers, and the societies in which they exist.
The rise of the gig economy, contingency workers, remote working, and agile talent pools over the last few years have changed our sense of career and workplace. Rigid job descriptions have given way to job crafting as employees take the opportunity to customise their roles and interactions at work. The traditional sense of a physical place of work has been inevitably overtaken by flexible, hybrid ways of working. And yet, as the conceptual cornerstones of work weaken, the importance of employers to our personal lives, and to a wider society, has become stronger than ever.
Very soon, employees will have more control and more choice than ever before, in who they work for and the projects they take on. With this widening choice will come a more discerning and demanding employee; one who is much more explicit in their expectations. The power balance has already shifted in that direction. Experts are growing increasingly concerned about a burgeoning skills shortage and reward and benefits teams will come under increasing pressure to offer deals to rival competitive offers in what is a seller’s market for employees with the right skills.
A brand’s employees, not just its consumers, will drive a move to greater sustainability
Many people see an obvious misalignment between their personal values and those of the organisation they work for; and it’s driving a potential exodus; with 40-50% of employees saying they plan to leave their employer at the end of the pandemic.
More than ever, employees are conscious of the work they do and who they do it for. Those managing reward and benefits need to respond by demonstrating that their corporate values are in synch with those of their employees; and reflected in the benefits provision.
Employees will expect to see a commitment to sustainability and the environment. Companies who are B Corp certified or commit to being carbon neutral will take a commercial advantage from it in terms of attraction and retention. And we’ll see greater interest in employee benefits that relate to, what we at Benefex call, ‘Community Wellbeing’.
Company car schemes will need to be entirely electric and pension investments will be expected to meet a higher ethical standard. Employees will be much more interested in taking products and services from within their country and locally to them.
Employers will harness colleague networks to close physical distances
Community wellbeing also plays an important part on our mental health. The pandemic taught us all a great deal about resilience and the importance of ensuring we can handle stress and anxiety. Resilience isn’t just a personal characteristic we’re born with; the evidence shows that positive relationships in our home and work lives help us build resilience, and vice versa. As we move to more dispersed workforces, the community wellbeing of the collective as well as the individual will become increasingly important. Employers will need to bring people together and enable networks of colleagues that can form bonds and share social capital. Benefit schemes will need to focus on rewards that build community, combat loneliness, promote altruism and foster collaboration.
'Belonging’ and inclusion will be baked into successful employer brands
The vast majority of people want to work for an organisation that prioritises and celebrates their diverse communities. The pandemic highlighted the many challenges marginalised groups face and brought to the surface the inequalities that still exist in our society. Employees want to see a fairer society and they believe their employer should be leading the charge. How we design experiences at work – including our benefit schemes – will be driven by inclusion and a desire to represent every single employee. How our policies describe the modern family and acknowledge the specific challenges of different groups of employees needs to be part of the selection process for new benefits.
Purpose will drive organisational performance
Most employees say that a sense of belonging, and inclusion is driving organisational performance. It’s important for employees to have purpose at work, but it’s also important for them to feel like they are part of something greater; and, by and large, they don’t.
Employees increasingly need work that matters. For a long time, employees have wanted more than just pay from their roles. But there is a disconnect between employees and employers; while many leaders prioritise the commercial value of purpose within an organisation, employees are looking for more meaning and how their work contributes to society. With 70% of employees saying their overall purpose in life is tied to their work, this is a future no business can’t afford to ignore.
People will become even more important to our businesses
The pandemic showed us the unique characteristics of resilience, emotional intelligence and flexibility that people bring to successful businesses. We are quick to adapt to new ways of working, we generate ideas, we provide great customer experiences and our ability to empathise and sympathise in 2020 was invaluable, and beyond anything a machine can achieve. Growing concerns over the future of the human in our workplaces may be unfounded; Covid-19 gave us a case study in how AI and automation could augment our human capabilities, rather than supplant them.
Rising global consumption (expected to read $23 trillion by 2030) will inevitably impact the world. New jobs, new exports, higher health standards and education spending will add more humans to the workforce – despite the rise of AI and automation. Over time, labour markets tend to adjust to changes in demands for workers, and this may bring further slow wage growth, so finding the right people for the job will be challenging – especially in those highly skilled roles or those management roles with much needed skills like empathy and understanding.
According to a recent survey by Qualtrics, almost half of employees say they will be job hunting over the next 12 months and this will see employees’ total renumeration packages become more important to them as employers return to being much more competitive. As well as purpose and belonging, employees will expect evidence of how you can support them and their lives before they accept a role with you.
Wellbeing will be built into the fabric of everything we do
In 2021, growing corporate transparency and new stakeholder influence has seen investors, customers, and regulators calling on employers to commit to better employee wellbeing. According to a recent survey of 600 US investors, 94% want to see evidence that a company is investing in employee wellbeing. For employers, offering a mental health platform and employee assistance programme is no longer enough. Wellbeing must permeate every single part of the employee experience.
We’ve already seen a trend towards companies trialling a four-day working week; we expect any benefit that lets an employee spend more time away from work and with the people they love will become increasingly popular. Beyond efforts to promote greater work-life balance, wellbeing will start to influence every part of the HR function: from how managers are recruited and trained, to organisational structures, HR policies and benefit schemes. Wellbeing is already the primary driver for new benefit investment; and soon we’ll see entire benefit schemes designed specifically around wellbeing. How you support and care for your employees will become the reason why a benefits scheme is offered in the first place and a core part of the EVP. This flips the flow chart: ‘wellbeing benefits’ will no-longer be standalone initiatives; instead, well-designed benefits schemes will stem from a wider workplace wellbeing strategy.
Employee benefits will become truly personalised
As consumers, we expect our communications to be tailored to us, our needs, and the stage of life we are at. We have no patience for spam and this expectation has made its way into the workplace. We want to be offered benefits that support us and speak to our individual needs. We expect tailored communications, smart suggestions, and personalised benefits experiences. While many benefit providers have talked about personalisation for some time, very few offer a uniquely personalised service for every employee. Being treated like an individual human rather than part of a homogenised workplace ‘blob’ is critical to a great employee experience.
This doesn’t just mean offering flexible choices to employees; it means pulling people into the systems at a time that is right and meaningful for them. And all this starts with data. For example, data about a change in lifestyle - like starting a family - to trigger a personalisation of tools, content, and benefit choices, rather than just encouraging employees to browse pages of benefits text. A growing proportion of people shop on social media; we no longer browse Netflix or Amazon in the way we used to; employees aren’t going to just turn up to your ‘shop’ and buy benefits. They need to be pulled into these systems with recommendations, personalised messages, and tailored communications that understand their preferences. We will begin to communicate benefits in a consultative way; we know what their lives are like and what their interests are, so why aren’t we showing them how their benefits could help them?
Our reliance on great tech will continue
During the pandemic we saw an abundance of technological advances. In 2013, Zoom had 400,000 users, because of the pandemic it now has more than 300 million daily meeting participants. In 2020 we downloaded more apps, conducted more contactless transactions, and spent more time online than ever before.
The dominance of technology at work will require more technological solutions to old benefit problems. Employees will expect providers to offer 24/7 access to virtual and digital assistants for things like healthcare and mental health support. Online learning, virtual offices and telehealth will continue their upwards trajectory and the employee benefits platform will become a natural home for the wider employee experience.
The desire to develop new career skills will grow
Employees will also have a growing desire for developing new skills and advancing or changing their careers far more often than they do at the moment. Most employees say the pandemic has made them reassess their career goals and they now feel like they have more control in deciding where and who they work for. Given the opportunity, more than half say they would retrain into a different career completely and more than two thirds say they want to learn new skills for more promising career options.
Benefit schemes that offer the ability to obtain new skills and experiences will grow in an interesting overlap of the total reward and learning and development functions as the acquisition of new skills and additional training is seen as a benefit of employment. Employees will want opportunities to learn how to manage their finances, learn a new language or a completely new skill. During the pandemic there was a surge in new learners signing up for courses on the Open University and the widescale adoption of online learning has now encouraged more employers to accept online qualifications making this a much more affordable and achieve route to upskilling and one that employees will ask for much more often.
Covid-19 has led to a renaissance in employee benefits
We saw resurgence in the very idea of employee benefits during the pandemic. Overnight, millions turned to their benefits packages for support and, as a result, the demand for insurance and wellbeing products (those with tangible value, as opposed to gimmicky appeal) skyrocketed. The pandemic reminded us of the finite and fragile nature of life, and demand for life insurance and income protection grew accordingly. More than half of employees now say their benefits package should be designed to help them with their health and wellbeing.
This new appreciation of the value and purpose of the benefits package has brought additional investment from organisations keen to protect their employees and build loyalty. Large global organisations like PwC and Walmart announced huge changes to their benefits packages last year. Walmart offered 740,000 employees a brand-new smart phone so they could access their employee benefits. PwC increased healthcare cover for trans employees by giving them $75k. In 2021, 68% of employers say they added at least one new benefit to their package in response to the pandemic and many are now looking for ways to enhance their packages to attract and retain more talented people.
The pandemic saw some industries struggle so much to attract and keep the right people that they were offering bonuses, increased pension contributions and enhanced holiday allowances. As most employees say their benefits package is critical to their workplace satisfaction, employers will be conscious of the growing return on investment available; not just in the benefits they offer, but in the user-friendly technology experience that underpins their value. This year four out of five global employers are re-evaluating their approach to benefits - the revival of employee benefits is here to stay.
Whatever the future holds, your people will be at the centre of it
Predictions are notoriously difficult to make, but one thing I’m sure of is this; a new social contract between employee and employer is emerging and giving rise to a renewed demand for an Employee Value Propositions (EVPs) built around sustainability, connectivity, inclusion, enablement, wellbeing, and personalisation. Those organisations that realise this soon will gain the competitive edge.
Horizon scanning - the future of employee benefits
An editorial on the future of employee benefits by Gethin Nadin