As the workplace continues to evolve, employers will need to offer a wider variety of benefit options to meet the expectations of different generations within their workforce.
“Since the pandemic, employers have faced a dramatically different workforce dynamic with a sustained increase in hybrid and remote workers, which is reshaping expectations,” said Patrick Leary, corporate vice president and head of LIMRA Workplace Benefits Research. “In this highly competitive job market, benefits remain a powerful tool to attract and retain talent. Employers recognize that expanded benefits are key to meeting employees’ post-COVID-19 needs and expectations.”
Employers believe demand for nonmedical benefits, such as paid family medical leave, emergency savings and financial wellness programs, will increase significantly, according to new research by LIMRA and Ernst & Young. Traditional employer-paid products and services will remain at the core of benefits packages, with widespread expectations for more holistic offerings. Most employees expect their employers to provide medical insurance, while paid family leave, dental, vision and life insurance also are highly valued benefits.
The study shows benefits that promote wellbeing, including offerings focused on mental, physical and financial health, have become even more important to younger employees. Younger generations were much more likely to express interest in mental health treatment and physical wellness benefits, tuition and student loan assistance, and caregiving benefits.
“A majority of employers recognize that in the future, it is somewhat or very likely that employees at their company will expect a wider variety of benefits options,” said Chris Morbelli, Ernst & Young’s Americas Life and Group Insurance transformation leader. “Employers — particularly smaller organizations — will have to balance building a more comprehensive benefits package with budgetary constraints and will likely look to provide more employee-paid benefits to meet the demand.”
One of the biggest challenges for employers is that workers lack awareness and understanding of the benefits they offer. Given the diverse needs of the workforce, an employer will need to customize communications to effectively engage and educate employees of different generations. Most workers — more than 90% across all generations — believe guidance can be provided at least somewhat successfully through digital channels.
“Digital capabilities are becoming points of differentiation in carrier selection for employers,” Leary said. “When considering a new insurance carrier, 59% of employers say they would select a carrier that works well with their benefits technology platform, even if their product is a little more expensive. Moreover, almost half of employers would switch to a different benefits carrier if that carrier was not integrated to their benefits technology platform.”