As we move into 2024, companies are increasingly recognizing the importance of employee well-being and how it affects productivity, engagement, and retention. With this in mind, leading organizations are exploring ways to enhance their employee benefits packages in the year ahead and beyond.

In this comprehensive article, we’ll look to the future of employee benefits programs, discussing the emerging trends that should shape your strategy.

What’s the Current State of Employee Benefits?

In recent years, employee benefits have evolved significantly, moving beyond traditional, basic offerings like retirement contributions, health insurance, and paid time off to more diverse packages. This shift has been driven by various factors, including changing workforce demographics, talent shortages, and economic fluctuations.

Today, investment in employee benefits is a key priority for most U.S. employers. According to a new survey, competition for talent (80%) is the top priority influencing companies’ benefit strategies.

However, many businesses face cost challenges as benefit expenses continue to escalate. To manage their benefits plans’ costs effectively, employers should prioritize quality over quantity and focus on what their workforce needs by assessing the value of offered benefits.

The Importance of Benefits Relevance and Personalization

The days of one-size-fits-all benefit plans are well behind us with more businesses focused on personalization and customizability. This means offering a range of options within benefit packages and allowing employees to select the ones that align with their life situations.

Top 5 Employee Benefits Trends for 2024

Let’s consider prevailing employee benefits trends and how businesses can embrace them to craft a winning employee benefits proposition in the year ahead:

1. Flexibility

The concept of work flexibility has evolved beyond remote and hybrid work models or no-meeting Fridays. Offering flexibility now means trusting your employees to own their work and manage their schedules in a way that works best for their lifestyles and families.

This includes letting them know it’s OK for them to take unscheduled personal time to manage a stressful situation they might be dealing with—a sick child, a flat tire, or a burst pipe at home.

Here, an employee communication app that allows people to swap shifts with colleagues at short notice can come in handy.

2. Mental Health and Well-being

One of the most significant shifts in employee benefits programs in recent years has been greater recognition of the importance of mental health. Consider these statistics:

• A third of American workers report that they are concerned about their emotional well-being or mental health, and a quarter rate their mental health as fair or poor.
• About half of workers say they often or always feel stressed.
• Nearly 4 in 10 report that they often feel anxiety or depression, and about a quarter often experience feelings of loneliness.

We can expect to see a continued focus on the area of mental well-being and more investment in comprehensive mental health programs that go beyond mere awareness campaigns. These programs may include stress management resources, mindfulness training, and counseling services.

3. Financial Wellness

For decades, workers at all levels were left to figure out key components of their personal finances with limited or no guidance from their employers. Fortunately, that’s all changing.

Specifically, more employers are focusing on helping employees tackle the current high cost of living through their financial well-being programs. A recent survey found that inflation is the top financial wellness concern employers hope to address with their programs. 

Employees are growing increasingly pessimistic about their short-term financial outlook. For the first time, workers report that having enough savings for an emergency and paying monthly bills are the financial issues that cause them the most stress. 

Considering these factors, the best corporate financial wellness programs should cover these essential topics:

• The basics of financial literacy
• Budgeting tools
• Debt-management education (including the importance of credit scores)
• How and why to build an emergency savings fund
• The basics of saving and investing for retirement
• Financial coaching through access to qualified financial experts and counselors
• On-demand pay, which replaces the outdated two-week pay cycle and allows workers to access their wages as soon as a shift ends

4. Internal Mobility

Investment in learning and development remains a high priority for today’s employees. They want to work for employers who are genuinely invested in their careers. Organizations that do so will be able to attract and retain top talent.

Given tighter training budgets, more companies are prioritizing internal mobility, or the movement of employees within an organization (vertically and laterally) to new career and development opportunities. This includes promotions, new positions, mentorships, cross-team or additional projects, job shadowing, and job swaps.A Deloitte report described how one organization saw a nearly 30% increase in employee engagement after introducing an internal career program to help employees learn new skills and seek alternative roles.

5. Social and Environmental Perks

One study found that 9 in 10 Gen Z professionals would quit their jobs if their employer’s values weren’t aligned with their own. Equally, data collected from the current and future workforce indicates that 9 in 10 of Gen Zs and 8 in 10 millennials feel companies have a responsibility to tackle wider environmental and social issues. Thus, companies need to make meaningful strides in reducing their environmental impact and investing in social causes.

For example, organizations might give employees paid time off to volunteer at a community allotment or introduce cycle-to-work schemes or charitable giving stipends.

Some companies are creating retirement savings plans focusing on environmentally conscious funds or companies with strong environmental practices. This allows workers to align their retirement savings with their values and contribute to a sustainable future.

What’s the Role of Technology in the Future of Employee Benefits?

HR and benefits teams typically spend significant time and effort identifying, developing, and implementing employee benefits programs. But if employees don’t know that they exist or are frustrated with how difficult it is to access or understand their benefits, the situation can become costly and disheartening for employers and employees alike. One survey showed that over a quarter of employees (28%) are either unable to access or dissatisfied with their ability to access their benefits from a single platform.

The good news is that technological advancements continue to revolutionize employee benefits, enabling companies to provide more seamless, integrated, and user-friendly solutions. For example, self-service digital health platforms, mobile applications, and even wearable devices will be pivotal in promoting employee well-being.

Once employers improve transparency and provide clear and easy-to-understand information about their benefits plans, employees can make more informed decisions about their wellness.

Closing Thoughts on the Future of Employee Benefits Programs

The future of employee benefits programs is bright and it holds tremendous opportunities that are flexible and accessible for organizations committed to enhancing employee well-being and engagement.

Now, that sounds like a good start to the new year.

Boost Your Benefits Strategy with Payactiv

Find out more about Payactiv’s suite of employee financial wellness benefits. These are designed to help employees manage day-to-day finances, pay bills on time, save and budget, access free 1:1 financial coaching, and reach their financial goals.

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