Redefining employee benefits post COVID-19
Not too long ago, organizations across the world had an understanding towards employee benefits that took for granted their functional role. For big organizations, the benefits they offered to their employees took the form of in-office perks, such as access to a gym, a game room, or the office swimming pool. For smaller organizations, the focus was always on providing health insurance. There was nothing great or abysmal about the benefits offered, though there were minor differences across organizations. In all cases, however, benefits were considered to be “good-to-haves”, with the job role in the organization taking priority.
In the post-COVID scenario, however, the entire approach to benefits has changed, with the primary shift being that benefits are now viewed as “must-haves”, forming a larger part of the company culture, and therefore playing a crucial part in employee engagement as well as retention. In addition to this, there are new areas of concern which were never considered earlier because they were not thought to make enough of an impact on business - but with the effects of COVID-19 being felt across industries and economies, what is considered to be important has itself changed. In this article, we explore what has caused these industry-wide changes and what that means for organizations both large and small.
Addressing engagement and retention through benefits
While Gallup had already announced a worldwide employee engagement crisis some time ago, it was severely compounded by the belief - reported in the 2019 Global Talent Trends Study - held by 97% executives, that there was increased competition when it came to hiring the right talent for their organization. This meant that organizations had to take a closer look at what would make people choose their organization over others, and beyond that, what would make them stay there as well. Here are some of the ways in which organizations have factored this in into their organizational policies:
- Approaching healthcare as a holistic digital offering: Even before COVID, there was a need for greater health insurance offerings in MSMEs, with only 30% offering health insurance, according to KPMG. With healthcare concerns taking center stage, organizations have been quick to offer this as a benefit for their employees. In fact, the delivery of healthcare has changed from the conventional hospital visits and in-person appointments to online consultations and medicines delivered at doorstep.
The demand for digital healthcare has increased so much that US digital health startups raised a total of US$6.7 Bn in funding in Q1 2021!
- Offering increased flexibility in terms of work: As the pandemic forced people into their homes, they had to simultaneously juggle professional work and care work (for themselves as well as for their family members). As a result of this, there has been a significant hike in mental health concerns among employees, with McKinsey reporting that 62% of employees across the world considered it a challenge to manage their mental health alongside their professional responsibilities.
Organizations have now started offering flexibility in remote working options - including providing flexible working hours as well as flexible locations - and the results speak for themselves. A survey conducted by Microsoft reported that 4 out of 5 managers expected that the flexible working conditions would continue even in post-pandemic conditions, while 7 out of 10 managers said that they would like to keep partially working from home.
- Diversifying and personalizing wellness offerings: Back in September 2020, Google extended its labor day weekend, and SAP followed suit with a mental health day off. Among other firms joining the league, LinkedIn gave all of its 15,000+ staff a week off to recover from burnout.
Companies across the globe are realizing just how important it is for them to address one of the core experiences of employee experience today - mental health.
With more and more businesses looking to increase their spending on health and well-being, and considering separate strategies for physical, mental, financial, social as well as career wellness, it is clear that creating a safe and holistically caring space for their workforce to function is a prime benefit that companies are looking to offer their employees. How leaders leverage this understanding to diversify and personalize their wellness and benefits offerings to meet individual employee needs remains to be seen.
- Miscellaneous context-appropriate benefits: As companies across the industrial and sectoral landscapes grow in a variety of ways, there is no one-size-fits-all approach that fits the needs of all companies, or now employees. Research conducted by Benify demonstrates that different generations appreciate different employee benefits. This is why companies are offering benefits that are the most relevant for their employees, whether it be reimbursement for work-from-home supplies, support for financial planning, extending scope for paid leaves and vacation days, as well as providing more options for child- and elder care.
Adjusting benefits as per employee needs and context will be crucial to talent engagement and retention post COVID-19.
Outlining a path for the future
Companies are evaluating and re-evaluating their benefits each and every day. According to data from Aon’s survey, 4 out of 5 of businesses have already started to re-evaluate their approach to benefits, with 7 out of 10 companies not yet having a clear Employee Value Proposition - which clearly states the benefits an employee receives in return for their time and effort in service of the company. When it comes to employee benefits, organizations are still playing catch up, or testing the waters. In either case, the jury is still out on the best way to define benefits post COVID-19, but one thing is for certain - they need to be relevant for employees in ways they have never been before.