With the new year here, it’s a terrific moment to pause and reflect upon what this year will bring. To offer the best possible employee benefits package, you must be consistently benchmarking your benefits plan against those of your competitors. In this article, we’ll look at what employee benefits are projected to increase in importance in the upcoming year. Plus, we’ll examine why these benefits are critical to the strength and effectiveness of your overall benefits package.
1. Personalized Benefits
The first employee benefits trend to be cognizant of in 2020 is the customization or personalization of your benefits to match the needs and lives of your workforce. Unemployment remains low, and competition for top talent high. Similarly, it is the first time in America’s history that four different generations are a part of the workforce. Because of these factors, it’s imperative you tailor your benefits to meet the needs of each generation in the workforce.
So, when crafting your benefits program, make sure to offer a full menu of benefits and give your employees a choice to pick which benefits make the most sense for their age and their lifestyle. For example, younger employees are likely to favor benefits such as student loan repayment, fitness reimbursement, or onsite daycare. Older employees, on the other hand, are likely to favor benefits such as long-term disability or hospital indemnity coverage.
It’s important to know you can add many of these offerings voluntarily. Including these benefits as voluntary, employee-paid, means you get all the advantages of these offerings with little to no increase in expenses. So, examine your current benefits package and jettison the benefits your employees don’t find valuable. Then, make sure to add these customized benefits your employees find worthy.
2. Student Loan Repayment
It’s estimated that by 2025, 75 percent of the workforce will be millennials. And, these millennials are coming into the workforce with more and more student loan debt. As of 2019, Americans accumulated more than $1.6 trillion in outstanding student loan debt. Clearly, there is a need for student loan repayment benefits. But many businesses have been slow to react to this growing demand.
According to the Society for Human Resource Management’s 2019 Employee Benefits survey, 8 percent of organizations offer tuition-repayment benefits. This number is twice that of the 4 percent it was in 2018 but is still less than significant. So, utilizing a student loan repayment plan is an exceptionally powerful competitive advantage in the recruitment and retention of top talent.
But it’s essential you do more to help employees saddled with student loan debt. Providing employees with help to manage expenses and forecast financial needs is vital to lifting your staff out of student loan debt. Additionally, per Greg Poulin, CEO of Goodly, “student loan repayment is highly customizable, making it one of the most cost-effective benefits employers can offer.”
Learn how a student loan repayment plan can boost your business.
3. More Types of Paid Leave
According to a December 2019 survey from Unum, the most desired, non-insurance benefit, was more generous paid time off. Even if you already offer paid time off, it may be a good idea to examine your paid time off policy and determine if it’s time for a change. If your employees aren’t utilizing their time off, you may consider adding language to your policy that forces employees to use a certain amount of time off each year.
Some companies are implementing an unlimited paid time off policy. There are a few potential disadvantages to unlimited PTO, but if implemented correctly, this policy can serve as an enormous recruiting and retention tool. Per MetLife’s 2019 Employee Benefit Trends Study, the top emerging benefit workers wanted the most, in 2019, was unlimited paid time off.
Additionally, some employers, especially non-profits, have begun offering employees volunteer time-off (VTO). Essentially, these employers give staff a certain number of hours they can take paid leave from work to volunteer for a cause of their choice. Similarly, employers should consider offering their staff civic time off (CTO), to give staff the chance to vote or caucus, during an election. Both VTO and CTO help align employer and employee values, which strengthens the chances of employee retention.
Read about how making your employees use paid time off may improve your firm.
4. Health Insurance is Still King
Another trend that should continue through 2020 is the fact health insurance is still the most desired benefit for most employees. A 2018 survey from Gallup found the number one most desired benefit for employees is still health insurance. Similarly, a 2017 study from Glassdoor found a company’s health insurance has the most significant effect on how employees rate their overall benefits plan.
Expect this trend of employees valuing their health insurance the most to continue into 2020. The value of health insurance should only grow as the cost of healthcare continues to rise. Since 2009, family premiums for health insurance have increased by 54 percent, with workers paying 71 percent of these increases. In 2018, the average American household spent almost $5,000 per person on healthcare.
Employees are tired of spending more and more on healthcare while their employers attempt to figure out methods to spend less. This year, expect employees to push for more predictable healthcare costs and additional choices to help them manage severe and/or chronic health conditions. Direct contracting, captive health plans, and reference-based pricing are all examples of cost-savings tools employers are using to decrease the cost of healthcare.
Learn why health insurance is still the MVP of your benefits plan.
5. Mental Health Benefits Will Continue to Grow
The next trend you should be aware of is the continued growth of mental health benefits. We are slowly discovering just how significant of an impact mental health has on not only employers but people in general. According to BenefitsPro, an estimated 1 out of 5 adults in the U.S. experiences a mental illness at some point in their life. Similarly, employers in America lose almost $225 billion annually to stress, anxiety, depression, substance abuse, and other mental health issues.
Because of this substantial impact, expect more employers to attempt to implement benefits and initiatives that support employees at all stages of their individual struggles with mental health issues, in 2020. Some examples of benefits employers are using to help employees to improve their total health, including mental health, are: mindfulness training, Employee Assistance Programs (EAPs), commuting reimbursement, infertility benefits, and parental leave.
In addition to these perks, employers should ensure their health insurance plan contains mental healthcare coverage. If not already applicable, employers should change their health insurance plan to include the following, to ensure you’re giving mental healthcare the significance it deserves:
- Treating out-of-network behavioral health services as in-network, so employees pay the same no matter which provider they use,
- Covering out-of-network behavioral health services on your plan even if it doesn’t cover out-of-network services, or
- Setting a lower co-insurance for behavioral health.
Read about the real impact of mental health issues in the workplace.
6. An Increase in Benefits for Employee-Caregivers
It’s estimated there’s a total of over 65 million Americans who are responsible for the care of a family member. This total is close to 30 percent of the country’s entire population. Yet, according to Workforce, just 12 percent of employers offer tools or resources to support caregivers. In fact, these caregivers cost employers millions of dollars annually in absenteeism alone.
In 2020, anticipate more employers to bolster their offerings for employee-caregivers. There are three main types of caregivers, and understanding each type can help you more effectively offer benefits that target these employees’ needs. The three types of caregivers are:
- The sandwich generation – Those who are caring for both children and aging parents.
- Spouses who are caring for each other during serious or chronic illnesses.
- Grandparents who are caring for their grandchildren.
Increased paid leave, legal resources, caregiving-assistance benefits, care subsidies, EAPs, and flexible work options are all examples of benefits employers are using to support employee-caregivers.
Learn how providing caregiver support can better your business.
7. Continued Emphasis on Financial Wellness
Anyone who’s dipped even a toe into the politics of America has likely heard the fact that wages for the working class have stagnated for years. Because inflation continues to outpace wage hikes, it will be paramount for employers to invest in financial wellness programs for employees. And financial wellness is a necessary benefit for both older and younger generations. For example, older employees are likely to need financial wellness benefits to help them plan for retirement.
Younger employees, on the other hand, are likely to want help planning their finances around their student loan debt, or purchasing a house. Plus, financial wellness benefits are especially prevalent because a majority of people, 51 percent, according to BenefitsPro, think an economic recession is coming within a year.
Financial wellness benefits, such as financial counseling, do more than just assist people in managing their income. These benefits can help your employees understand how to budget, pay off their debt, plan for large purchases, and prepare for retirement. Financial wellness programs can help protect your employee’s financial health without a significant boost in their paychecks and even in the face of an economic downturn.
Read why financial wellness programs are vital to the success of your employee benefits plan.
8. More Flexible Work Options
The next trend to monitor in 2020 is the expected growth of both flexible and remote work options. Employees want to feel valued, engaged with, and cared for by their employer. Flexible and remote work options give employees the freedom to decide when, where, and how they work. This freedom, offered through flexible and remote work, can help employees become more engaged in their work.
In a survey by the Society for Human Resource Management (SHRM), 91 percent of HR professionals agreed flexible work has a positive influence on employee engagement. Additionally, these work options can improve employee health and work-life balance. For example, flexible work options are a terrific method to help employee-caregivers work around the demands of caring for a loved one.
Learn why flexible working options are some of the most valuable benefits.
9. An Increase in the Use of Health Savings Accounts (HSAs)
While it’s expected that the use of high-deductible health plans will decrease, expect those still utilizing such a plan to increase their investment in and use of, their linked health savings account. If your employees are healthier, contributing to an HSA through an eligible HDHP could save these employees money through a tax deduction. These tax savings can help offset the cost of the associated high deductible plan.
There are also specific measures employers can take to make sure your staff gets the most out of their HSA. Some employers are increasing the amounts they contribute to employee’s HSA to help employees offset their high deductibles. Employers can contribute to employee’s HSAs through matching funds, participatory wellness programs, or outcomes-based contribution incentives.
Learn all about Health Savings Accounts (HSAs).
The Wrap
It’s a good idea to familiarize yourself with the nine benefits detailed above. According to numerous benefits professionals, these benefits will only grow in importance during 2020. Plus, as discussed with each number, these benefits provide multiple advantages to both your staff and your business as a whole.