Employee Benefits Trends for 2024
This year, it’s essential for employers to focus on refining their benefits packages to meet the unique challenges faced by their workforce. Many employers have already recognized the importance of enhancing their strategies for retention and engagement, and this remains a critical priority. Developing comprehensive and responsive benefits plans is key to addressing the evolving needs of employees and ensuring a supportive and productive work environment.
However, before leaders can effectively develop their benefits packages, businesses need to grasp the current trends influencing employee benefits and the primary benefits concerns. Here are key emerging employee benefits trends to watch in 2024.
2024: Embracing Automation in Benefits Management
To streamline benefits management without increasing administrative burdens, employers are scrutinizing the digital competencies of benefits administrators. The focus will be on solutions that are straightforward, reliable, and user-friendly. This approach is expected to drive significant behind-the-scenes technological advancements within the broader benefits landscape throughout the year.
Employee Financial Wellness Benefits
Despite a reduction in inflation last year, employees still experience little relief. The financial state of employees faced multiple setbacks in 2023. A substantial portion reported living from paycheck to paycheck; credit card debt reached unprecedented levels; many employees noted that inflation impeded their general savings and retirement funds; and the overall financial well-being of employees dropped to its lowest point.
Employers are set to expand their focus on financial benefits, encompassing a range from assistance with financial budgeting and debt repayment to support for emergency savings and addressing student loan debt. The financial well-being of employees is crucial for their overall wellness and work productivity.
According to research by the American Psychological Association (APA), a significant 72% of Americans experience some level of stress about finances. Such financial worries among employees can lead to reduced productivity, a weakened organizational culture, and even delayed retirements. Addressing employees’ financial concerns directly with a robust financial wellness program should be a key component of your 2024 employee benefits plan.
Modern financial wellness programs are evolving to encompass tailored financial planning, effective budgeting tools, and educational materials. Additional offerings are emerging, such as student loan repayment assistance, debt management strategies, and employee assistance programs that offer financial advisory services. A diverse range of interactive benefits is crucial for employee support. For instance, budgeting tools can aid in retirement savings, while debt management programs can provide crucial guidance for regaining financial stability.
Emphasis on Mental Health
In recent years, mental health has become a major priority for organizations, a trend that is expected to persist into this year, too. This focus may even intensify due to increasing instances of employee burnout and the upcoming presidential election, potentially heightening employee anxiety and stress.
Organizations are anticipated to more actively promote existing mental health resources for employees and explore new benefits. This might also encompass the availability of round-the-clock mental health support lines, apps dedicated to meditation and mindfulness practices, and programs designed to enhance resilience and develop effective coping mechanisms.
HSA Policy Updates
A Health Savings Account (HSA) allows employees to reduce their healthcare expenses by setting aside pre-tax income for eligible medical costs. HSAs are particularly favored by older generations, who typically contribute the most to these accounts. The recent increase in HSA contribution limits enables individuals to allocate more funds for their healthcare needs in retirement. Additionally, this expansion broadens the pool of eligible participants who can take advantage of HSA plans.
Employers need to acknowledge the benefits of these enhancements and consider incorporating an HSA plan into their range of medical benefits. Allocating funds to an HSA not only saves on taxes for both employers and employees involved but also allows the HSA account to accrue interest. Moreover, an HSA is individually owned and fully transferable, allowing employees to retain the account upon departure from the company.
HSAs offer the flexibility to cover various eligible medical costs, including deductibles and copayments. They extend to cover COBRA premiums, Medicare premiums for those 65 or older, and health insurance premiums during unemployment while receiving federal or state unemployment benefits.
Furthermore, employers have the option to deposit funds into HSAs as a perk for their employees. Given these advantages, employers should place high importance on evaluating HSA-compatible plans.
Employee Benefits Trends 2024: Flexibility Benefits
In 2024, employees’ preference for flexible scheduling remains a top priority, with companies acknowledging its importance for maintaining a healthy work-life balance. The challenges of balancing professional and family responsibilities, highlighted during the pandemic, have extended beyond this period. The trend towards returning to office work seems to be stalling, as employees favor the adaptability offered by remote and hybrid working models. It’s anticipated that 2024’s benefits will align with these evolving preferences.
A Mercer report indicates that a significant 71% of businesses provided flexible working benefits for their employees last year and the number is not expected to drop.
Adopting hybrid or generally flexible working hours can empower teams to work at their preferred pace, potentially enhancing productivity. In such a model, the focus shifts from physical office presence to the quality of outcomes. Moreover, the past few years have seen an increased reliance on tools and technologies that facilitate remote work, catering to those who choose to work from home.
Yet, the advantages of flexible working benefits extend beyond just employee wellness; it also offers significant benefits for businesses. Research reveals that, on average, those who work flexibly log in an additional 1.4 days per month compared to their counterparts in traditional office settings. Furthermore, different generations present in the workforce have different needs in terms of flexibility which should be addressed by the employers in their benefits plans.
Expanding Paid Leave Options Beyond Standard PTO
Businesses are enhancing their paid time off (PTO) policies to encompass mental health and caregiving requirements. Traditionally, maternity leave has been the main form of caregiving leave, but now more companies are broadening their leave offerings to stand out and attract talent. These expanded leave options can include:
- Inclusive Parental Leave: Policies are evolving to be more inclusive and gender-neutral, covering birth, adoptive, surrogate, foster parents, and partners.
- Sabbatical Leave: Offered to long-serving employees, these breaks allow time for rejuvenation and pursuing personal or professional interests.
- Caregiving Leave: Gaining popularity, this leave supports employees in managing both work and family responsibilities while caring for a family member.
- Bereavement Leave: Provided for grieving the loss of a family member, with some companies extending this to include pregnancy loss.
Emerging PTO trends are also reshaping the landscape:
- PTO Purchase Programs: These allow employees to buy or sell vacation days for monetary benefits.
- Unlimited PTO: While cost-effective for employers, it has potential downsides for employees, like taking fewer days off, affecting work-life balance.
- PTO Conversions: Employees can convert vacation time into cash, 401(k) contributions, student loan repayments, and donations.
Support for Caregivers
A significant number of employees need help with caring for their children, parents, or grandparents. The kind of assistance they’re looking for includes flexible working arrangements, paid leave, and emergency caregiving services. The demand for child and elder care benefits saw a remarkable increase of 177% from 2020 to 2023, as highlighted in a report by Goldman Sachs, and this trend is anticipated to persist.
Support for Family Expansion – Family Benefits
Globally, infertility affects approximately one in six individuals, as reported by the World Health Organization, impacting workforce productivity significantly. Employers are increasingly recognizing this need, offering benefits related to fertility treatments, surrogacy, and adoption support, but also additional related benefits, such as access to lactation consulting and products, as well as services like egg harvesting and freezing.
Employee Benefits Trends 2024: Career Advancement Opportunities
Life-long learning
In numerous sectors, the job market continues to be competitive. To successfully attract and retain employees in light of evolving workplace norms, expect a resurgence in initiatives focused on career progression and lifelong learning. Key trends in this area encompass:
- Tailored training programs for acquiring new skills and preparing for different positions
- Specialized industry certifications and bespoke educational opportunities
- Mentorship and professional coaching services
- Strategic career planning assistance
- Comprehensive leadership training programs
- Financial support for further education through tuition reimbursement schemes.
Shift Towards Skill-Based Recruitment and Enhanced Women’s Health Benefits
Increasingly, companies are adopting a skill-based approach to hiring. This method prioritizes technical abilities and transferable skills over formal educational qualifications or previous job experiences. Many companies are even eliminating educational requirements from job listings.
In 2024, there is an expected shift in traditional benefits programs to better encompass family planning and women’s health needs. To further support women’s health, a growing number of employers are considering lifestyle spending accounts (LSAs). LSAs offer post-tax financial benefits, giving women greater freedom to allocate funds for their specific health needs.
Customized Benefits Options
There’s a growing trend towards personalized benefits, including voluntary benefits and lifestyle spending accounts, as employers aim to resonate with employees who desire a sense of belonging and appreciation.
Examples of voluntary benefits are offerings like pet insurance and legal service access, both of which have seen increasing demand lately.
Lifestyle spending accounts, funded by employers, provide employees with the flexibility to buy a range of approved items or services, ranging from athletic footwear to consultations with debt management experts. While currently provided by about 13% of employers, a recent Mercer blog post reveals that 70% of employers are contemplating adding LSAs to their benefits packages.
Conclusion
Navigating the dynamic world of employee benefits in 2024 requires a strategic approach that aligns with the evolving needs and expectations of the modern workforce.
As we’ve discussed, from embracing flexible work arrangements to offering a diverse range of personalized benefits such as mental health support, caregiving leave, and financial wellness programs, companies are actively reshaping their benefits packages. This shift not only enhances employee well-being and engagement but also plays a crucial role in attracting and retaining top talent.
In this landscape, VantagePoint stands as a valuable ally for businesses looking to optimize their employee benefits. With our expertise in managing comprehensive benefit plans, VantagePoint is equipped to help your company maximize the employee experience, ensuring that your workforce is not only satisfied but also fully supported in all aspects of their professional and personal lives.
By partnering with VantagePoint, you can effectively adapt to these changing trends and create a fulfilling and productive workplace environment. For guidance or expert advice, get in touch with our team!