Benefit plan changes

Benefit plan designs have evolved during the pandemic to accommodate culture shifts, emergency protocols, and a desire for more flexibility. As we emerge from the uncertainty of the past two years, employers are considering further changes to benefit plans with cost, attraction, and retention top of mind. In an effort to understand the current benefits landscape, health and productivity research non-profit Integrated Benefits Institute (IBI) surveyed employers across the US to understand changes to benefits plans during the pandemic, and what's happening now with those changes.

According to IBI's survey results, turnover rates increased steadily since 2019 (15%), with the highest turnover in 2021 (19%). It's expected that 2022 will continue to see an increased rate. Companies are placing more importance on benefits that will attract and retain employees to mitigate this fallout.

Many companies seek feedback. Since the pandemic began, 40 percent of employers surveyed made changes to their benefit plans. Listening to employees wants and needs is important when considering benefit plan changes, and 65 percent of companies consider employee preferences when designing benefit plans. Eighty percent of companies stated they seek feedback from employees regarding their satisfaction of newly implemented products and programs.

In IBI's survey, employers stated that cost mitigation, and attraction and retention are the most influential factors in benefit design decision-making. Benefits added during the pandemic include remote work options (42%), EAP/behavioral health (27%), and caregiver leave (20%). The benefits most often removed during the pandemic include subsidized childcare (52%), financial wellness programs (48%), and tuition assistance (47%).

Workforce demographics. Understanding your workforce demographics is crucial to benefit design planning strategy. Tammy Fennessy, Director of Benefits at American Eagle Outfitters (AEO), shared the importance of caregiving and parental leave, especially in light of the fact that 70 percent of their workforce is women. Tammy emphasized how important age ranges are to designing benefit plans. The average age of AEO employees is 24, so the company focuses heavily on their needs and wants, including student loan benefits and financial wellness. They also extensively use technology such as apps to educate their employees about their benefit plans.

Looking beyond the pandemic, employers plan to continue mental health coverage, expand leave benefits, and offer remote or hybrid work options. However, employers are also looking at cost mitigation and cutting benefits such as paid parental leave, weight management/exercise programs, and financial wellness support.

What does this mean for employers? The pandemic brought significant changes to how leadership and employees think about benefit offerings. Looking ahead, employers must incorporate the following in benefit plan design strategy:

• understand your workforce demographics,
• incorporate Diversity, Equity, and Inclusion (DE&I),
• consider employee feedback; engage with and listen to your employees,
• educate employees on the benefits offered and how to use them, and
• proceed with caution on cost mitigation and utilize empathy when considering changes to your benefit plan.

SOURCE: www.ibiweb.org

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