Employee Benefits Trends in 2022: What Are the Future Trends?
Between shutdowns, home offices, and the great resignation, the pandemic has shifted employee priorities regarding their relationship to their work and employer. Employees are increasingly more concerned and proactive about safeguarding their physical and mental well-being, work-life balance, and financial health. This shift is challenging employers to re-evaluate their current benefit packages and consider new ways of meeting employee needs.
Employers should familiarize themselves with the employee benefits trends of 2022 to guide their discussions and decision-making on this important topic. Reviewing these trends in employee benefits and responding with meaningful action now can go a long way to keeping your employees happier, healthier, more productive, and loyal to your business.
What to Know About Employee Benefits Trends of 2022:
- Increasing Healthcare Costs
- More Employee Voluntary Benefits
- Providing Support for Lingering COVID-19 Effects
- More Focus on Employee Mental Health
- Building More Savings & Retirement
- Expanding Paid Leave Policies
- Embracing New Technology
- Making the Most of Employee Benefits Trends of 2022
Increasing Healthcare Costs
Healthcare costs are continuing to rise. The 2022 Peterson-KFF Health System Tracker© reports that total health expenditures increased steeply in 2020 and health spending represents one-fifth of the U.S. economy. There is a widespread belief that the "pandemic hangover" will continue to drive healthcare costs upward. People catching up with deferred care from the pandemic, persistent COVID-19 related costs (including treatments of long-haul symptoms), ongoing mental health and substance abuse crises, and increased anxiety can contribute to ongoing pandemic-related costs.
Knowing that one of the emerging trends in employee benefits is an increase in medical spending, employers should take steps now to be prepared. Providing employee health benefit accounts is one strategy that can allow employers to improve access to affordable health care for their workers. Health benefit accounts also provide costs savings to you by helping you reduce your tax bill and control healthcare costs for 2022 and beyond.
More Employee Voluntary Benefits
Voluntary benefits are services or goods that are paid either fully or partially by the employee, but at a group discounted rate made available by the employer. Examples typically include ancillary benefits that fall outside of traditional benefit packages such as ID theft protection, financial counseling, healthy lifestyle programs, and supplemental insurance packages such as life, cancer, and even pet coverage.
Employers are continually seeking ways to attract and retain talent. Offering voluntary benefits is one of the growing trends in employee benefits because it gives employers the freedom to find ways to provide added value to their employees while minding the business's bottom line. Employees can choose the benefits that are best suited to their needs and lifestyle, and you aren't paying for benefits that your employees don't use or appreciate.
Providing Support for Lingering COVID-19 Effects
The Centers for Disease Control (CDC) recognize an array of symptoms that can linger long after an individual recovers from COVID-19, including, but not limited to chronic joint pain, inability to focus, sleep problems, and dizziness. Living with these symptoms can impact job performance and increase absenteeism, which puts an employee at greater risk of increased anxiety and financial stress. The U.S. Department of Health & Human Services (HHS) points out that "long COVID" can be considered a disability under the Americans with Disabilities Act if symptoms substantially limit one or more major life activities.
The expanded range of offerings in voluntary benefits coupled with the persistent effects of the pandemic paint a more complete picture of employee benefits trends. For employees to remain healthy, happy, and engaged, they need their employers to provide support for any lingering COVID-19 effects. This holistic approach may come in the form of expanded sick hours, caregiver and childcare support, establishing work-from-home policies, financial counseling, personal health and wellness programs, and easier access to health care.
More Focus on Employee Mental Health
Before the pandemic, employee benefits trends regarding mental health were gaining traction. Since then, Paychex surveyed more than 1,000 workers to find out how the pandemic has affected their mental health at work. Around 51% of respondents said their mental health had worsened during the pandemic. Around one-third reported struggling to achieve their typical level of productivity due to their current state of mental health. As we move into the pandemic's prolonged aftermath, recruitment, retention, and productivity success will likely favor those employers that provide mental health benefits.
Building More Savings & Retirement
Monetary concerns continue to headline employee benefits trends of 2022. Financial security, or lack of it, certainly contributed to the anxiety many Americans experienced during the pandemic. As a result, prioritizing financial goals to improve financial wellness is getting some much-needed attention from workers and their employers. It's a serious issue.
Financial wellness programs can play an important role in employee retention strategies, according to a September 2021 report by the Society for Human Resource Management (SHRM) and Morgan Stanley. Helping build savings for emergency funds, debt repayment, and retirement are critical elements to a competitive financial wellness program.
Expanding Paid Leave Policies
Some businesses are expanding paid leave policies, such as increased or unlimited paid time off (PTO), as well as family and medical leave. Doing so can reduce situations when employees feel obligated to go to work even if they feel ill, which can reduce the risk of exposing other workers to illness. Expanded paid leave policies can also help give workers financial peace of mind in the event they need to care for family members who are experiencing a medical emergency. Expanding PTO or even providing unlimited PTO can also demonstrate the trust you have in your employees.
Embracing New Technology
Employee benefits technology trends point to businesses relying more on technology and going digital with their HR and benefits. Doing so can give leadership easy access to data and analytics for better decision-making. Self-service systems or tools allow employees to perform functions such as reviewing their benefits, adding dependents, checking their company contributions to their 401(k) retirement account, or even enrolling in online training classes all at their own convenience.
As more employees work in a remote or hybrid environment, HR digital technologies can help keep all workers connected to their HR benefits and services. Giving employees remote access to these functions allows HR staff to operate more efficiently, freeing them to focus on other HR business development strategies.
Making the Most of Employee Benefits Trends of 2022
As employers struggle to hire and retain employees, a strong and strategic benefits package can play a key role in your business's success and help set you apart from the competition. Staying abreast of new trends in employee benefits ensures you're investing in benefits that your employees will find useful in improving their personal and professional lives. As a trusted HR provider, Paychex can help you put together an ideal package as well as provide ongoing, easy-to-use support that benefits you, your employees, and your business.