How Fringe Benefits Are Evolving After COVID-19
How Fringe Benefits Are Evolving After COVID-19
Fringe benefits plans are vital in building an appealing company culture that attracts the right workforce. Employees who feel comfortable and influential in their work environment are more motivated to achieve. Moreover, the ability of organizations to respond to changing expectations and adapt significantly impacts success in employee retention and recruitment efforts while preventing high turnover costs.
Currently, workers are in high demand as companies increase operations or resume pre-pandemic operation levels. Many employers are raising wages to compete for workers and to offset rising inflation. From December 2020 to December 2021, compensation costs increased by an average of 4.0% across all industry sectors.
Employers looking to retain their existing workforce also face challenges as experts predict pent-up demand for turnover. During the pandemic, quit rates reached a nine-year low. However, the Bureau of Labor Statistics reported that the turnover rate for 2021 was 57%, compared to 45.1% in pre-pandemic 2019. Coined the “Great Resignation,” nearly 39 million Americans left their jobs during 2021.
As employers compete for talent, potential candidates report that better compensation and benefits account for 35% of why employees consider new positions. Employers may need to look beyond traditional group health benefits and compensation to retain or attract talent. Fringe benefits are a connecting piece that enhances your benefits plan and helps attract your desired workforce.
Looking Past Current Fringe Benefits
Historically, fringe benefits covered a wide range of perks for employees, including wellness programs, subsidized childcare, flexible working hours and paid family leave policies. Widespread benefits in recent years included paid time off for volunteering, free food in the office, pet insurance, intern housing, in-office daycare, dress for your day policies and student loan reimbursements.
While many of these benefits are still relevant for today’s workers, in-office perks may not be effective in attracting a remote workforce. Employers must refresh fringe benefits to match employees’ new priorities.
Fringe Benefits to Consider
Flexibility as a Requirement
Unquestionably, COVID-19 altered flexibility expectations for employees. In a survey of 9,326 workers, 83% reported to prefer a hybrid work model where they can work remotely a minimum of 25% of the time, and 90% of employers said that remote work did not hurt productivity. Employers can adapt to this new expectation by building a robust work flexibility policy that aligns with company priorities and values. Accordingly, 83% of companies plan to add more flexibility to work policies already in place.
Mental Health Continues to Rise in Importance
According to a Conference Board survey, more than 75% of employees report facing burnout, up from 43% in 2020. Employers are taking this opportunity to invest deeply in mental health benefits. Accounting firm PwC offers a $250 vacation bonus for employees who take 40 consecutive hours of vacation. This benefit is available quarterly, and employees can earn up to $1,000 each year in vacation bonuses. Additionally, performance goals now include wellness objectives.
Other employers are expanding mental health benefits in new ways. This could include increasing no-cost counseling sessions that extend mental health benefits to family members, household members and domestic partners. Companies are adding additional time off by providing more paid time off around major holidays or designating one day where all employees are given a day off as a mental health day.
Looking Beyond the Office
With the office taking less of a focal point, employers are offering benefits that aid employees at home. These benefits include basic stipends for a remote work setup and monthly Wi-Fi reimbursement.
Other employers are offering lifestyle spending accounts (LSAs) that can be used on expenses that typically include monthly gym memberships, meal services, nutrition counseling, athletic wear, nutrition counseling, food supplements or life coaching. The goal of an LSA is to offer flexible benefit funds that employees spend on health and wellness services or products. Some companies take a more liberal approach to the LSA and define lifestyle as anything that promotes an employees wellness and can include sports equipment, cookbooks or activities that challenge them.
An LSA provides companies with extensive opportunities to create benefits that employees will value and actually use. LSAs can replace low-performing benefits and instead give employees expanded choice in caring for their wellbeing.
Benefits That Support DEI
Increasingly, both current and potential employees are inquiring about companies’ diversity, equity and inclusion (DEI) initiatives, actions and results. One way to actively deliver on promises is by adding more DEI-related benefits and policies that address any existing disparities.
These DEI-related benefits and company policy options are wide-reaching and work to address systemic issues that exist in the company or in greater society. These changes can include expanded parental leave, paid sick time off for all employees, adoption benefits, gender-neutral restrooms, gender identity options, free in-person or virtual mental health, tuition assistance and dependent and eldercare programs.
Benefits and company policies are another way companies can demonstrate their commitment to creating a diverse, inclusive and equitable work environment.
Inclusive Fertility Benefits
Fertility benefits are one area where companies are re-evaluating their benefits to make them more inclusive and appeal to a wider audience. The goal is developing attractive benefits to support individuals who want their family to grow, and providing fertility resources for those who need it.
Companies are expanding fertility benefits to now cover all ages, genders and types of parenting. These broadened benefits can include fertility testing, LGBTQ+ fertility support, educational resources, nutritionists, urologists, adoption support, telehealth and mental health resources. By creating a comprehensive benefit plan, fertility benefits can support the physical, logistical and emotional aspects of family building.
Fertility benefits also extend beyond having children. Every year, 20% of the female workforce is going through menopause, and these benefits can provide a roadmap and support for this segment of your employees.
Covering Pandemic Pets
It is estimated that 11.38 million U.S. households welcomed a new pet into their household during COVID-19. New and existing pets served as important companion animals for many employees throughout the pandemic, and employees may now relate differently to their pets after spending extended time at home. Pet insurance is rising in popularity as pet owners choose to insure their pets to help cover routine care or an unexpected veterinary bill. Companies have been extending new group and voluntary pet insurance offerings at unprecedented rates due to growing demand.
Continued Focus on Caretakers
The struggles of caretakers, both for parents and children, were exacerbated during the pandemic. Fringe benefits in the caretaker space may strongly resonate with employees and can be another tool to help prevent burnout.
Creating a Program
Before revamping your fringe benefits program, evaluate your employees’ wants and needs to see how you can align them with your company’s objectives and values. There are endless ways to create a fringe benefits plan, and your specific offerings should be tailored to your company and employees.
Building a comprehensive benefits package, including attractive fringe benefits, positions your company to recruit and retain your optimal workforce. If you are looking for new ways to build a strong workforce in a post-pandemic landscape, your team at Brown & Brown is ready to assist you in creating a benefits plan that not only supports your employees but also your company’s budget, goals and values.