‘Great Resignation,’ Covid-19 forcing employers to sweeten benefits

Nonmedical and nontraditional workplace benefits are expected to grow 20% by 2026 as a result of increased competition for workers and heightened employee expectations, according to a recent report from Limra and EY.

Employers seeking to hold onto their top talent had better boost their benefits offerings — and not necessarily the financial ones.

Nonmedical and nontraditional workplace benefits will grow 20% by 2026 as a result of increased competition for workers and heightened employee expectations, according to a recent Limra and EY study.

“The current workforce consists of five generations of workers with distinct priorities and needs when it comes to benefits,” said Kimberly Landry, associate research director of workplace benefits research at Limra. “Over the next five years, employers say they expect they will have to strengthen their benefit offerings in order to attract and retain top talent.”

“It’s not surprising that employers are enhancing their workplace benefit offerings as they grapple with sustained challenges attracting and retaining top talent,” said JJ Perez, president of Nationwide Corporate Solutions. “According to the Department of Labor, the U.S. saw a record 4.4 million workers quit their jobs in April 2022. Beyond offering competitive salaries, a good benefits package can give an employer a significant edge over the competition.”

The study also revealed that the leverage in workplace power will remain on the side of workers, with 6 in 10 employers expecting workers to have greater influence over their company’s benefit decisions in the next five years. Meanwhile, three-quarters of companies plan to adapt their benefits packages in response to shifting employee demographics, according to the research.

The joint study explored how employers, brokers and others in the workplace benefits space expect benefits to change as the workforce evolves, especially in the wake of the Covid-19 pandemic.

From a strategic perspective, the study predicted technology will increasingly be used to support the communication, delivery and enrollment of benefits packages. The study found that 70% of employers expect to rely more on technology from third-party vendors. Furthermore, when it comes to benefits packages, 68% percent of employers will rely more on digital enrollment, and 43% of employers want their workers to receive considerable support with enrollment, according to the study.

As to the specific benefits being offered, Covid-19 caused a shift in people’s priorities. Employers now believe their employees will be very interested in life insurance benefits (53%), paid family or medical leave (49%), and other nontraditional and nonmedical benefits. When it comes to insurance, the Limra and EY study showed that 36% of employees view insurance benefits through work as more valuable today than pre-pandemic.

“Experiencing something as disruptive as a global pandemic has prompted workers to reexamine their benefits expectations and is leading employers to adjust their benefits packages to address the wider array of needs of their workforce,” Limra’s Landry noted. “Employers may find more success in the talent market by supporting the employee on an individual level and providing expansive benefits that can cover a myriad of needs.”

“The impact of the coronavirus over the last two years has certainly brought health care-related benefits and holistic well-being into sharper focus. Our latest research also supports this, as we’re seeing an upward trend in employees’ engagement in health care-related benefits,” said Kevin Crain, head of retirement research and insights at Bank of America.

Adds Jeffrey Green, senior vice president at Advisor Group: “Feedback from our employees and expert research shows an increased demand for nontraditional benefit programs — and we recently launched a comprehensive wellness program that incorporates physical as well as mental and financial health to address this demand. Not only does the program help our current teams be their best selves at work and beyond, but it’s a critical tool supporting the recruitment of highly skilled employees to our company.”