Employee benefits are a critical part of any HR strategy, empowering businesses to attract and retain the very best talent while supporting staff throughout the moments that matter most. As a result of the COVID-19 pandemic, businesses were forced to reevaluate their employee benefits offerings to ensure they were fit for purpose. Many business leaders recognized the importance of benefits and technology in improving employee well-being, engagement, and loyalty.
Our latest research, The age of adaptability: A digital-first approach to benefits in a post-pandemic world, shows that 26% of organizations have considerably increased their employee benefits spend as a result of COVID-19. All told, nearly three-fourths (72%) of employers made an increase since the start of the pandemic.
This may not be the result that anyone expected — after all, many employees were initially laid off or furloughed. But in a world of fierce competition for talent — and millions of people searching for new opportunities — employers are rightfully acknowledging the value of benefits in supporting employees during these challenging times.
Employee benefits expenditures continue to take up a significant portion of overall employee expenses. As a percentage of base salary, one-third of employers (33%) spend as much as 20% of base salary on benefits. Nearly as many (29%) spend between 21% and 25%, and one in 10 spend more than 25%.
With such a high percentage dedicated to employee benefits, organizations are seeing increased scrutiny in determining how that money is spent. Almost all of the HR and benefits teams surveyed (88%) say they have seen more involvement in benefits from the C-suite. That’s a great step forward — in order to secure buy-in, business leaders need to take a more proactive approach to their benefits strategies.
However, if they want to get the most out of their benefits and justify their ROI, they’ll need the right technology to power a robust offering that meets employees’ individual needs. Many organizations are doing just that — our research shows that 50% of overall HR budgets are going toward technology this year. More than three-quarters (76%) say the pandemic influenced their tech investments with a firm focus on reward and benefits, as well as digital health and well-being.
How do employees feel about their benefits packages? More than half (57%) say they make them feel like a valued member of the team, indicating that employers’ investment in benefits is directly linked to adding value to employees.
However, not all workers recognize the value of their benefits. With 33% saying they agree or strongly agree that they have no idea how much their benefits are worth, organizations need to do more to educate their staff about the benefits being provided. Technology is integral in enabling this, allowing employees to view and use their benefits from any location and at any time.
This level of flexibility was important pre-pandemic, but it has become a must-have in today’s highly distributed work environment. With organizations adopting hybrid work policies — and some allowing their staff to work remotely forever — employees need the ability to access and utilize their benefits quickly and easily, regardless of where they’re working.
Employee benefits and benefits technology are no longer on the fringes of HR — they have moved up the corporate agenda and now have a seat at the top table. The C-suite is taking them very seriously, investing in technology to provide employees with the best experience possible.
This is, after all, a significant investment — if employers are going to open their wallets for great benefit programs, they want to know that this spend will deliver real value to their employees and their business.