Employee Benefits Trends for 2022

The Great Resignation of 2021 has left employers with the need to fill 10 million job openings and introduce new benefits for flexible employee schedules.

Healthcare, accounting, and technology firms are reviewing their benefits strategy to attract and keep employees in a pandemic that has made many workers reimagine their careers.

Flexible work hours, paid leave for loss of immediate family members, employee referral bonuses, child care benefits, and merit bonuses are some of the benefit strategies we saw in the heat of the 2021 pandemic.

Forecasting the future is difficult and only a few companies do a great job of designing benefits to offer their employees as the new year approaches. Employee benefits trends in 2022 need to be attuned to the present socio-economic climate.

In this article, we will navigate the trendiest employee benefits approaches for the coming year as well as the circumstances and regulations that influence them.

2022 workplace trends

Financial and mental health wellbeing are the essential employee benefit concern. How well businesses manage employee wellness in the coming year will impact their productivity and retention rate. A study published by Forbes showed that 33% of workers ranked financial wellness as their problem area, while 24% rated mental and emotional health as their main area of concern.

Employee benefits trends for 2022

Healthcare benefits trends 2022

A 6.5% increase in healthcare costs

A report published by PWC suggests that healthcare costs will rise by 6.5% in 2022. This increase is due to higher utilization rates of consumers who put off care during Covid and considerable investments in technology by providers.

Self-funded health benefits plans

A self-funded health plan is a strategy where the employer pays health claims by the member straight to health providers, instead of paying premiums to a health insurance company to cover those claims. A great number of organizations agree that self-insured health plans improve cost savings.

Active benefits participation

Employers can lower health costs by encouraging employees to become actively involved in their healthcare. They are urging their employees to improve their health education and price shopping.

Price shopping will get easier in 2022 with the new hospital price transparency rule taking effect on January 1, 2022. This provision allows employees to view specific prices for services and procedures, educating themselves before taking expensive health decisions.

The end of cost-shifting

Cost-shifting will be phased out by 2022 due to issues bordering on the thinning affordability of healthcare for low-wage health employees on a plan. Data shows that there has been a decline in the volume of individual employees with a deductible of over $2,000 in 2020.

Out of pocket costs are spiking up every year and fed-up workers are disappointed by the lack of results. For this, some providers are calling off raising deductibles and other cost-splitting benefits, while others are outright devising ways to change employee out-of-pocket spending for healthcare services.

Reference-based pricing (RBP)

Healthcare costs are surging at an uncontrollable rate, with further upside momentum expected in 2022. There needs to be a system that allows employers to make transparent procurements in an old, unreliable healthcare system that has been exposed by Covid.

RBP is a fast-growing solution that offers cost control for business managers, bringing equitable refunds to facilities and providers. Health benefits are easily a health organization’s second-largest budget component. How well an organization rebounds from the pandemic depends on how prudently they can save some unnecessary zeros on the bill, especially when it comes to benefits cost reduction.

What an RBP does is to determine a fair rate for provider services by comparing Medicare reimbursement rates and provider cost information, achieving a balance between actual treatment cost and reasonable profit for providers and their facilities. It also gives managers better control of claims costs.

Flexibility work perks 2022

Remote work

Employees, today, expect to see work-from-home privileges on their prospective employer’s recruitment post. Two in five employees want to get a job that offers more flexible benefits, while eight in ten employees desire a good work-life balance through flexibility. 

Since the pandemic started, the resistance against working from home has been torn down as employees showcase their satellite production capabilities. Nearly every employer out there has developed a strategy to bring remote workers into their fold seeing as the pandemic gradually devolves into an endemic.

A workplace community beyond office walls

In modern settings, it’s easier to interact with colleagues and exchange ideas authentically without being in the same space. A trip to the metaverse, anyone?

In years past, we would have to create a network based on workers and suppliers close to us, but social media and VR technology are changing the way we meet up for work. Physical offices will become spaces where we collaborate, brainstorm, develop strategies, and get entertained.

Leave benefits trends

Paid family leave

A paid family leave policy could be coming to the U.S. This policy would likely be dispensed by the U.S. Treasury Department or the Social Security Administration. In this plan, all workers would qualify for paid leave so long as they have earned wages within the last six months. An employee could get 67% of their wages replaced for up to 12 weeks per annum, or a limit of $4,000 per month. During their time off, the lowest-paid workers could see up to 80% of wages paid.

Parental leave

Increasing parental leave is a benefits reform aimed at easing the burden on workers. Morgan Stanley, in a December 16 memo, declared that parents of every description will be entitled to a minimum of 16 weeks of paid leave as major Wall Street lenders tussle over talent. Workers will also enjoy six to eight weeks of postpartum medical leave.

Family benefits trends

Diversity, Equity and Inclusion (DEI) programs

Race and gender equity are mainstream issues and employers who prioritize DEI record-high employee retention and engagement. In 2022, employers are expected to initiate or expand DEI programs to address salaries and promotion inequalities at the workplace.

Family planning and fertility benefits

Millennials are the largest generation currently in the labor market. They are at the stage where they are thinking about having children if they haven’t done so already. In a bid to stay competitive, employers offer benefits that help with family planning and fertility so that they can be seen as family-friendly and inclusive.

Mercer discovered that 40% of large employers who offer fertility benefits do so to forward their DEI efforts. Benefits covered include IVF, surrogacy, egg freezing, and adoption services to assist with planning before a baby arrives or after it arrives.

Wellness benefits and mental health benefits

The week-long company shut down

Another popular perk employees need to place the searchlight on when it comes to delivering employee benefits in 2022 is a week-long company close down. Burnout takes a heavy toll on employees’ mental health. Recently, companies like Nike and LinkedIn locked down their offices to give their enforcers a much-needed cerebral reprieve. Empathic displays such as this will have a positive impact on work output going forward. Prioritize mental health, get more work done!

Student loan repayment

Student loan repayment is aimed at lowering the financial and psychological burden that student debt impinges on workers. This new trend is gaining popularity as employees seek to add more millennials to their setup. Also, the CARES Act incentivizes organizations to offer student loan intervention by making $5,250 per employee/per year student loan repayment by employers tax-exempt.

True value, however, lies in the employee loyalty that comes with receiving help. A recent survey by American Student Assistance revealed that 4 out of 5 young employees will remain with an employer for 5 years if they help with their student loan repayment.

Retirement and financial employee benefits trends

Financial wellness

The pandemic has woken up the retirement industry to the advantages of financial wellness. Experts opine that people who needed money over the last two years may have dug into their retirement savings. A 2019 survey revealed that over 65% of Americans expect to go into retirement with less than $10,000 in their retirement savings plan. Poor retirement planning is due to increasing meal costs, poor saving culture, stock market apprehension, and a general lack of financial literacy.

Financial wellness programs provide worker resources to tackle short-term financial shocks while offering counseling and perks to ensure long-term financial security. We’ll be seeing a lot of programs geared towards debt reduction, credit building, budgeting, saving, and investing in 2022.

Other benefits & perks employees appreciate

Covid Vaccination compensation

Many businesses are searching for ways to get their employees to get covid shots. They pay their workers for the time taken to get immunized. Others offer small stipends as an incentive to get vaccinated.

Employee assistance programs (EAP)

EAPs are specially designed to offer personalized, high-quality benefits ranging from estate planning and identity theft services to mental health counseling. Business owners should embrace programs that enable their workers to toggle seamlessly between work and life. Benefits can be delivered via apps, helplines, and video calls.

Looking ahead to 2022

Great employees are looking to have great employers. Businesses that want to get more out of their workers should create high-value programs, products, and services that support them in and out of the office.

Benefits like financial wellness and mental health support have received much fanfare. Programs built around these themes grant employees access to valuable solutions that make them feel loved by their company. Conversely, employees who feel invested in by their employers are keen to invest more of their skills in their company; plain and simple.

If you need guidance or expert advice, as an employer or an employee, get in touch with our team!