Employee Benefits Trends 2020 and Beyond
Employee benefits trends bring to mind changes in some big ways during 2020. Employee benefits trends have been moving away from the one-size-fits-all, cafeteria-style approach to employee benefits. In recent years, technology, combined with employee demand and the lowest unemployment rate in decades is driving companies to be more innovative than ever with their offerings. From flexibility to personalization to financial wellness, these are the top nine employee benefits trends to watch in the coming year, according to CNBC’s make it:
- Flexible paydays: Increasingly, employees want their employee benefits to include the ability to be paid at a time of their choosing, not just on payday. Consider that apps like Venmo and Zelle make it possible to receive payments from peers almost instantaneously. As such, individuals have come to expect faster payments. So it may, er, pay for employers to consider ways to enhance their employee benefits to personalize the payday experience, giving employees the opportunity to get paid when and how they want. According to a CNN Business report cited by CNBC, Walmart, Noodles & Company, Uber and Lyft already provide flexible pay as part of their employee benefits. Employees can access their earnings as soon as their hours are logged — not just on payday. How employers choose to respond to employees’ desire for more flexible pay options as part of their employee benefit trend offering will be a significant factor in their ability to recruit and retain talent, according to Doug Politi, an executive at ADP quoted in the CNBC article.
- More remote work opportunities: The Society for Human Resource Management (SHRM) reports that 69% of organizations allowed employees to work from home at least some of the time in 2019, and 27% offered full-time telecommuting arrangements. Employee benefit trends of offering remote work opportunities as a component of their employee benefit menu will be able to tap into broader talent pools — regardless of geographic location. Another bonus: employers may be able to minimize overhead costs, such as rent for office space.
- Technology-driven healthcare: Healthcare is the employee benefit workers care about most, according to SHRM. The definition of healthcare will become broader in 2020, according to CNBC, and include not just physical health, but improved support around mental, behavioral and emotional health as part of employee benefit trends packages. Workers will have the opportunity to address more of their health concerns online as more employers begin to offer employee benefits such as Telehealth and telemedicine. Individuals with minor illnesses can get a diagnosis over the phone or video chat on demand. This employee benefit is faster, more flexible and less expensive, CNBC observed. And when employees have less visits to their doctor’s offices, employers have fewer medical bills to cover on their behalf. Telemedicine’s availability as part of an employee benefits trend package has increased threefold since 2016, per SHRM, and 72% of organizations said they offered it in 2019.
- Greater diversity & inclusion efforts: New technology will be used more frequently to facilitate diversity and inclusion across all parts of the employee experience, from hiring and training to career development and recognition. Artificial intelligence is likely going to play a big role. According to Michelle Amer, chief people officer at CareerBuilder, who was quoted in the CNBC article, AI algorithms should be built with inclusion in mind. One way to accomplish this is to make sure the teams programming the algorithms are themselves diverse across race, gender, experience and background. Employers can also ensure diversity by recruiting based on skills or potential, Ms. Amer noted. Diversity can also help with retention, too. According to a 2018 Deloitte survey cited by CNBC, millennial and Gen Z workers are more than twice as likely to stay with a company beyond five years if it has a diverse workforce.
- Personalized career development: When employees have career advancement opportunities, they are more likely to have greater job satisfaction. As such, companies will need to offer ample learning opportunities in 2020, especially in the talent-starved technology space. According to CNBC, “Employers are expected to invest in more employee resources to “upskill” (when professionals stay up-to-date on skills they already have) and “reskill” (when workers learn a completely new set of skills to shift into a different role) their workforce.” In addition, potential candidates will likely look to join companies that can offer a career path, not just a job.
- Student loan repayment employee benefits: Growing numbers of companies are offering student loan repayment on their employee benefits menu. In fact, the number of companies offering student loan repayments has doubled from 4% to 8% in the past year, according to SHRM. Some programs include matching contributions paid directly toward an employees’ student loan, while others put that money into an employees’ retirement account. More companies are also expanding their efforts to help workers learn about debt consolidation and refinancing options as part of their employee benefits offerings.
- Financial wellness: According to Mr. Politi, “‘Forward-thinking workplace perks, such as personalized, employer-driven financial wellness offerings will help workers manage their pay, savings and improve their financial well-being.’” More than half (53%) of employers offer financial wellness programs on their employee benefit trend menu, according to a recent Bank of America study. That’s twice as many as four years ago. Financial wellness programs typically include online tools to help with budgeting and debt management and access to advice from financial advisors. In addition to improving financial stability, employee benefits like financial wellness also help to boost employees’ productivity and engagement in the workplace because they are less stressed and distracted by their financial struggles.
- Family-oriented employee benefits: Increasingly, employers are offering employee benefits that help support workers as they grow their families. These may include family planning, backup childcare, adoption assistance, primary and secondary caregiver leave and transition back to work programs. All of these will be important for companies to remain competitive in their employee benefits offerings and hiring practices. These employee benefits will also become more inclusive, and be offered to employees regardless of marital status, gender or orientation.
- Eldercare employee benefits: More than ever, workers are leaving the workforce to care for aging parents. As such, caregiving support is becoming more prevalent as an employee benefits offering. Caregiving benefits can be paid time off to care for a sick family member, along with financial and professional support to help employees transition from a caregiving role back to work full- or part-time. Companies can make their employee benefits more appealing and competitive to potential candidates by offering holistic family caregiving support that goes beyond parents caring for newborns. Consider paid family leave an employee benefit for all life stages and levels of caregiving.
With a workforce that now spans four generations, employers must be prepared to offer employee benefits that meet the unique needs of employees of all ages and stages of life. One-size-fits-all is not in vogue for employee benefit trends. That will just not cut it anymore. Employers must innovate in the coming year and beyond to address this interesting and complex challenge.