The last several years have seen the role and importance of employee benefits change for both employers and employees. Not too long ago, most people associated benefits with health insurance, a 401(k) or other savings plan, and vision/dental insurance.
But as the competition for talent has become greater than ever, and worker expectations continue to evolve, employers have had to drastically alter their approach to employee benefits and perks.
Today, employers must continuously seek to enrich existing benefits as well as add various options to attract and retain talent.
Let’s take a look at 7 trends in employee benefits that employers, especially small businesses, should consider in 2019.
1) Enhanced PTO Policies
Employees today, especially younger generations, want to have a healthy work-life balance. One benefit that employers offer their employees to help with this is paid time off, or PTO.
But as recruiting and retention have become more difficult, employers large and small have revamped their PTO policies to help attract and keep talent
Some companies have chosen to adopt some type of unlimited PTO, while others have increased the number of PTO days provided each year while also adding other days or events that qualify for employees to take off.
Employers need to review their PTO policy to determine how it compares in their location, industry, and against competitors to ensure that their benefits meet the expectations of their current and potential employees.
2) Better Customization with Benefits
We have written before about how personalization and customization are transforming the modern workplace. Employee benefits are no exception, with many workers wanting and expecting customizable options
from their employer.
Employees want to choose from multiple benefit options, as well as have voluntary benefits (more on that shortly) that they can elect to use if it meets their needs.
While customized benefits may not be too challenging for large employers to offer, it can present an issue for smaller employers. Luckily, there are solutions available (such as outsourcing benefits to a PEO
) that can help small businesses add customizable components to their benefit plans.
3) Paid Leave
One of the bigger benefit and HR-related stories in recent years has been the change in paid leave laws and policies.
Many states and municipalities
have enacted mandatory and more employee-friendly paid leave legislation, which has created challenges for employers, especially those that operate in multiple states or locations.
Additionally, some employers have decided to expand their own leave policies to boost their benefit packages in an effort to attract and retain talent.
It’s expected that more states and local governments will choose to create their own leave laws in the coming years, so employers will have to stay current on the regulations in each of the localities where they do business. Additionally, it’s also expected that employers large and small will continue to enhance their own leave policies as recruiting and retention grow more difficult.
4) Greater Emphasis on Employee Wellness
Another growing trend in recent years has been employee wellness
, and the importance employers and workers are placing on it.
It has been proven that there is a direct correlation between employee wellness and job satisfaction, and productivity which has led to employers adding more wellness benefits to their offerings.
Additionally, more employees today (especially younger generations in the workforce) are placing a greater value on wellness more than prior generations. This means that they are expecting their employers to help them reach their wellness goals through benefits and resources.
Employers who fail to offer wellness benefits could end up missing out on top talent, while also running the risk of having current employees voluntarily leave for opportunities with better benefit options.
5) Voluntary Benefits are Now a Must
A study conducted in 2018 showed that voluntary benefits are growing in importance for brokers, employers, and employees
. This has caused many industry experts to say that voluntary benefits can no longer be viewed as “nice-to-haves.”
Instead, employers need to view voluntary benefits as an essential part of a competitive, modern benefits package. Voluntary perks provide employees with the customizable options that are in demand, and allow workers to choose additional benefits that fit his or her needs, as well those of their families.
Small employers in particular need to explore ways to add a wide-range of voluntary benefits to their plans in order to remain competitive in today’s market.
6) Health Savings Accounts
A concern that both employers and employees share is the rising cost of healthcare in the United States.
Small businesses in particular have seen significant premium increases in recent years. And with some insurers reducing the number of small group plans offered, or leaving the market all-together, this trend is likely to continue.
To help combat the rising costs, employers and employees have increasingly turned to Health Savings Accounts (HSAs). One of the main advantages to HSAs is that they have a triple tax benefit
: contributions can be either pretax or tax-deductible, often grow tax-free, and can be withdrawn without taxes as long as they are used to pay for qualified medical benefits.
HSAs are paired with high-deductible health insurance plans that have lower premiums than other insurance options, which is the main reason why they have grown in demand over the last few years.
Employers can help their employees manage healthcare costs by offering some type of high-deductible plan that is paired with an HSA.
7) L&D Programs are In-Demand
While not a traditional benefit, learning and development (L&D) programs are more sought after today by employees than ever before.
Workers understand the importance of training in advancing their careers and believe their employer should help in this area. For employers, having L&D programs can help promote employees from within and overcome some of the challenges associated with recruiting.
Additionally, offering a formal learning and development program can be a powerful tool in the recruiting process. And by helping current employees develop their skills and advance their careers, you decrease the likelihood of them feeling that the only way to move up in their professional life is to look for a new role.
Small employers shouldn’t overlook the value of L&D programs
, especially since they are expected to become more popular and encompassing in the future.
Looking to Improve Your Benefits? Keep These Trends in Mind
Improving employee benefit plans requires employers to continuously examine their offerings and seek ways to enhance it in the future. Even small employers (through strategic partnerships like a PEO
) can improve their benefits in a way that can drastically improve recruiting and retention efforts in both the short and long term.
Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!