Pension & Benefits News Companies reconsider current employee benefit strategy
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Thursday, September 23, 2021

Companies reconsider current employee benefit strategy

By Pension and Benefits Editorial Staff

More than two-thirds (69 percent) of employers plan to differentiate and customize their benefit programs over the next two years, a sharp increase from just 23 percent today, according to recent research from Willis Towers Watson. The 2021 Benefits Trends Survey found that 73 percent of companies cite an increased focus on diversity, equity and inclusion (DEI) as driving their strategy, followed by tight labor markets (53 percent) and rising benefit costs (50 percent).

“Amid the ongoing pandemic, employers are under increasing pressure to manage their benefit costs while at the same time finding new ways to support their employees’ overall wellbeing,” said Jennifer DeMeo, senior director of retirement at Willis Towers Watson. “Additionally, tight labor markets and a growing emphasis on DEI are causing employers to look at their benefit strategies in a new light. As a result, many are now planning actions to enhance their benefit programs to create a competitive advantage.”

The survey found that only 51 percent of employers believe their benefit programs address the individual needs of their workforce, and even fewer (39 percent) offer significant flexibility and choice in benefits. Additionally, while 81 percent say they currently offer competitive benefits overall, only 26 percent rate their wellbeing benefits as market leading or better than other organizations. Less than half (47 percent) consider their core benefits (health care and retirement) to be better than other employers’ benefits.

Emphasizing wellbeing. Sixty-nine percent of companies say integrating employee wellbeing into the benefit package will be the top strategic benefit objective over the next two years, Willis Towers Watson found. Most employers (86 percent) cite employee emotional wellbeing as their top priority over the next two years, followed by physical wellbeing (68 percent) and financial wellbeing (67 percent).

According to the survey, employers are taking steps to support their employees’ health and wellbeing in four main areas:

  • Physical: Over three in four employers (77 percent) have added or enhanced online and virtual medical services, and 53 percent plan to add more or enhance them in the next two years.
  • Emotional: 73 percent of employers plan to boost their support for mental health (stress, burnout and depression).
  • Financial: Nearly half of employers (47 percent) plan to add or enhance their support for financial wellbeing (savings, budgeting, loans and counseling).
  • Social: More than a quarter of employers (29 percent) plan to add or enhance support for social wellbeing (charitable donations, volunteer opportunities and social recognition).

“Fostering employee wellbeing and resilience will remain a top employer priority for the foreseeable future,” said Julie Stone, managing director of health and benefits at Willis Towers Watson. “Employers would be wise to start with a review of total rewards strategies. Their challenge will be to develop an equitable approach that meets the needs of all workforce segments while aligning benefits, culture and other rewards with new ways of working and an enhanced employee experience. This will be critically important for employers to be able to manage benefit costs and optimize their investment in benefits.”

SOURCE: www.willistowerswatson.com

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