How to Rethink Your Benefits and Perks for 2021 [and Beyond]
The Society for Human Resource Management (SHRM) makes several predictions about how the COVID-19 pandemic is changing the workplace in the long term, and while more remote work tops the list, number two is more organizational investment in employee health and well-being.
There’s no denying that employee health and safety matter right now, but overall employee well-being will likely be central to your organizational success well beyond the pandemic—and that means adjusting your benefits and perks to provide the kind of support employees are seeking. In this post, we’ll discuss why your benefits strategy needs to evolve and what you should prioritize.
Benefits and Perks Have Always Mattered and They Matter Even More Now
Benefits don’t go unnoticed by your employees. Even before the pandemic, nearly four in five employees would have taken new or additional benefits over a pay raise. Employees see benefits as a significant contribution to their financial stability, which means that benefits become all the more crucial with the financial insecurity brought about by the pandemic.
And that’s exactly what employees are saying. In a survey by Prudential Financial, 75 percent of respondents agreed that because of the pandemic, employer-provided benefits are more important than ever before. In fact, employees are willing to walk away from their current job if it doesn’t offer them the benefits they need—about half of employees surveyed said they would be willing to take a chance on a new job right now if it offered better benefits. And that’s during an uncertain job market and a struggling economy.
The Effects of the Pandemic Will Be Long Term, So Plan Benefits and Perks Accordingly
We’re all tired and looking forward to a return to something resembling normal life, but it’s not like we’ll all wake up one day and everything will be OK; employees are going to need your support in the long term, especially with regards to mental health. The Centers for Disease Control (CDC) and the American Psychological Association (APA) are ringing the alarm about the rise in mental health challenges due to the stress and grief caused by the pandemic.
People are struggling with more than just money, and that comes as no surprise. Compared to 2019, the CDC found that in 2020:
- Three times more people reported symptoms of anxiety.
- Four times more people reported symptoms of depression.
What’s more, this increase in stress and decline in mental health isn’t going to disappear anytime soon. The APA notes in their October 2020 Stress in America report: “We are facing a national mental health crisis that could yield serious health and social consequences for years to come.”
What this highlights is that this crisis doesn’t just impact people in the immediate term, and it doesn’t just impact a select few. As the death toll from the coronavirus rises to over half a million Americans, the number of people affected by loss rises, too. One study estimates that every COVID-19 death leaves nine people bereaved. Do the math, and you get a staggering four and half million Americans currently mourning the loss of someone close to them.
And that’s just looking at the emotional impact of the pandemic. Some survivors of the coronavirus have developed lasting symptoms, earning them the nickname “long-haulers,” and their symptoms often make it impossible for them to return to work. While this condition is still in the process of being recognized as a disability, these are the kinds of lasting effects of the pandemic you’ll need to consider as you rethink your benefits strategy.
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What Benefits and Perks Will Employees Need Most in 2021 and Beyond?
We don’t mean to paint an overly grim picture of the future; the good news about 2021 is it’s not 2020, and everything you’ve been through means your organization has that much more experience in weathering tough times. That’s valuable, hard-earned wisdom you can use to inform your next steps.
With that in mind, finding the right benefits and perks for 2021 is less about picking out a few new things from a laundry list of ideas and more about finding the right strategy and support for your organization and your employees, specifically.
Where Should You Start?
Get at the core of what your organization and your employees really need. Here are a few questions to help you explore what’s essential:
- What unique trends and challenges are you faced with in your specific business or industry? For example, a tech company might be fine extending remote work indefinitely, but you might need to consider a hybrid workforce model if some workers serve customers in person.
- What do your employees actually need to do their jobs in this new reality? Think about the specific circumstances of your employees. For example, if many are parents, you’ll need to think about how more schools reopening in the fall will affect your workforce. If you’re not sure what they need, ask them; getting everyone standing desks is a nice gesture, but if employees actually need flexible schedules, they won’t thank you for their improved posture.
- How much is your organization currently spending on benefits and perks, and how much control do you have over that spending? Auditing your existing benefits programs can give you insight into what’s actually available to your employees and how well initiatives are working. For example, reimbursing employees for gym memberships may have been a powerful perk pre-pandemic, but between lockdowns and social distancing, it likely isn’t getting as much use. Expanding it to include online fitness subscriptions—or even better, adding an employee assistance program that includes both mental and physical health services—would probably serve current employee needs more closely.
What’s the Most Important Benefit for Employees? (Spoiler: It’s Health Insurance)
There’s a short answer and a long answer to this question. Let’s start with the short answer: employees want health insurance more than any other benefit. No matter how surveys phrase the question, health insurance (usually defined as including medical, dental, and vision) comes out on top:
- Before the pandemic, Glassdoor found that people would pick better health benefits over a pay raise.
- In another pre-pandemic survey, health insurance was the number one benefit that would sway a job seeker deciding between a high-paying position and a lower-paying position with better benefits.
- In MetLife’s Employee Benefits Trends 2020 survey, 86 percent of respondents said health insurance is a “must have,” coming out as the most important benefit out of 18 options.
It’s not hard to understand why employees want health insurance more than any other benefit or perk. In a normal year, healthcare costs are already the top financial burden for families in the U.S., and health insurance can help people deal with those costs. Now put that stress and burden in the context of an on-going pandemic and being able to afford care becomes paramount, if not a matter of life or death.
Stay flexible and productive with a hybrid workforce.
Hybrid work helps employees be more satisfied and saves businesses money.
A Great Benefits Program Is All About Equal Access
And now for the long answer: other than offering health insurance, the success of your benefits program relies more on access and inclusivity than on the number of benefits you offer. That’s the conclusion that Great Place to Work® consultant Lorena Martinez comes to in her analysis of benefits programs ranked highest by employees.
Here are a few highlights of what the best programs did:
- Benefits were accessible to everyone and were the same for all, regardless of tenure. No (or minimal) special benefits for executives.
- Benefits included coverage for employees’ loved ones, be they people or pets.
- Employees were most positive when managers showed they care about them, e.g., by being flexible during difficult times.
The specific benefits you choose to offer will be different for every organization. But if you want to make the biggest difference as you retool your benefits and perks, show your employees you care about all of them.
As Martinez explains, equality is everything. “Instead of giving ‘more and best’ to just a few, these [great workplaces] choose to distribute their resources in a more equal way. In other words, the best benefits packages are those that are available to everyone, not just select groups.”
Communication and Flexibility Will Continue to Be Key
As you update your benefits strategy, successful communication will depend on two elements: listening and educating.
Listening to your employees will help you understand what they need and how they’re using the benefits you offer, so you can find the right fit and provide relevant support.
Educating your employees about their benefits is going to help them make the most of what you offer. MetLife found that employees who understand their benefits are more likely to be holistically well than those who don’t.
Their Employee Benefits Trends 2020 report suggests two ways to encourage more awareness of benefits during the pandemic:
- Explain benefits in the context of employees’ lives, especially as you ramp up to an open enrollment period.
- Make it an on-going conversation. Don’t wait for open enrollment to make your case for why and how benefits can help employees when they have certain needs.
More broadly, open communication about other aspects of the organization and how you’re dealing with the pandemic also helps employees know what to expect at work and reduces their stress.
Flexibility likewise helps mitigate some of the stress and instability that will continue to affect your employees—it will be both a guiding principle for your strategy and a benefit for your employees. The APA’s Stress in America report also suggests that employers should provide more flexibility to their workers in “what they work on, when they work, or how they work (how they work is particularly important for employers of frontline workers).”
For example, some people will want to continue to work from home because that’s the kind of flexibility they need. This may be especially true of women, since women’s jobs have been more vulnerable during the pandemic and they’re more likely to take on child care responsibilities. Increasing flexibility for all workers, however, can help all parents juggle and share those responsibilities.
Think of it this way: being flexible makes it possible for your employees to better do their jobs and better handle stress in their lives.
Keep Empathy at the Heart of Your Benefits Strategy
We know you’ve been fighting hard to protect your employees and help them through a cataclysmic year. The best thing you can do is keep moving forward with that same humanity and empathy, making the changes you need to make so you can keep people safe and healthy. No perk can replace that.