COVID-19 is Changing Priorities
Since the outbreak of COVID-19, the benefits landscape has seen changes on a fundamental level. Both employers and employees have recognized the need for plans that cover the health and well-being of individuals and their families in new ways. Because of this, employee benefits are playing a larger role in retaining employees and attracting new talent for employers.
While unemployment rates across the nation have spiked, retaining and attracting new talent continues to be a challenge for several growing businesses. In a study conducted by The National Federation of Independent Business (NFIB), sourcing qualified talent is ranked as one of the biggest issues facing scaling businesses – second only to the cost of health insurance.
As these growing businesses prepare for the uncertain times ahead, identifying new ways to connect with their employees and creating benefits plans that align with their priorities will be a key factor in their success.
Meeting the Needs of Employees
Because of COVID-19, employees are starting to see the importance of benefits that may have ranked lower on their priority list in a pre-COVID era. For example, employees now look at benefits such as income protection resources as a necessity.
In a study conducted by LIMRA, research showed that roughly 25% of employers claimed that life insurance and short-term disability have become more important than ever before. In addition, roughly 40% of employers claimed that critical illness and hospital indemnity coverage is far more important now than in a pre-COVID era.
The employee benefits that, in the past, might have placed a potential employer higher on a job seeker’s list may be different than they once were. For businesses that offer their employees no benefits at all, sourcing and retaining quality talent is becoming a much bigger challenge. As stated above, the NFIB study shows that many growing businesses are struggling because of this. While they might need to expand their workforce, they feel their company is too small or the cost of health insurance is too high for them to offer potential employees the coverage they are seeking from an employer.
At the same time, certain supplemental benefit offerings are now and continue to become more relevant. For example, mental health benefits are increasing in demand as stress, anxiety, and depression are on the rise due to the effects of social isolation. Employees are now seeking benefits from their employers that look out for both their mental and physical well-being. In a study conducted by the National Alliance of Health Purchaser Coalitions, research showed that, because of COVID-19, 53% of employers are now offering their employees special emotional and mental health programs. In addition, 32% of employers have added to their mental health and well-being offerings for their employees.
Personal finances are, in most cases, the leading cause of added stress felt by employees. This is prompting more interest in financial wellness benefits from employers. As a result, there has been a focus from employers on helping their team navigate the challenges created by finances both individually and for their families, providing them with resources to help them understand and better manage their finances.
The Role of Financial Stress in Benefits
Financial uncertainty is having a large impact on the bottom line for growing businesses, forcing them to make tough calls that will ultimately change the landscape of employee benefits. Benefits such as health insurance are fundamental to the offerings of an employer. In fact, research shows more than a 25% increase in benefits offered since March. However, for businesses that have been impacted by COVID-19 more significantly, this could likely mean higher premiums for employees or adjustments to other benefit offerings.
For example, it’s possible that we will see a shift to more voluntary benefits. However, this doesn’t come without warning. In a study conducted by LIMRA, research shows that the interest in 100% employee-paid products is only 35% for life insurance and 39% for critical illness coverage. Additionally, many reported that they weren’t sure they would even enroll.
Putting together a first-rate benefits package for employees is nothing short of a balancing act. Many things have to be considered such as the needs of employees, which benefits to offer, and the budget you have to work with. That said, the businesses that are investing in getting it right are not just helping their employees, they are setting themselves up to be an employer of choice in the future.
Looking to the Future
Overhauling the entirety of your benefits offerings is a daunting task. Growing businesses should focus on listening to the needs of their people, and let communication be the guiding principle in developing a benefits package that works for them. The conversation doesn’t have to include the details of specific benefits but should allow for a dialog to better understand the concerns that employees have. This kind of communication will help to uncover the core needs employees have, and how they might have changed amidst COVID-19. As employee priorities shift, so should the decisions of the employer concerning benefits. If you are able to listen to your team and create a plan that works for them, you will be able to retain the people you have and attract the talent you need to be successful.