Forget free massages, Botox treatments, luxury watches, shopping trips and new cars. These benefits and perks might sound appealing, but experts say they no longer signal a strong work-benefits package.
Heading into 2023, inflation is still high, the cost of living continues to increase, layoffs are happening left and right, and economic uncertainty continues. Most people simply want to make sure their employer offers basic benefits like health insurance and 401ks. But experts say that those basic benefits are now considered table stakes. Employers across the globe are pushing to be more equitable to their employees, and that involves providing a wider range of benefits.
“There is a real focus on health equity and the way that an employer engages with the benefits they are offering and how they back up the talk around who they are as an organization,” said Samantha Wellington, executive vp of business affairs and chief legal officer of payroll and hr solutions company TriNet. “We’re starting to see employees engage way more with the idea that benefits lead to culture. The benefits you choose to make available are really used as a barometer by employees.”
Kim McNeil, knowledge advisor at the Society for Human Resource Management, said 2023 is all about a holistic approach to benefits that helps people plan for the future, which Wellington seconded.
“Companies can only raise salaries so much,” said McNeil. “They can’t keep pace with inflation, and instead are asking how we can ease some of those financial stresses and burdens through other means.”
She’s also seen diversity, equity and inclusion increasingly weaved into benefits over the past six months or so. That means employers are including additional benefits for women, like offering menopause leave, gender reassignment health coverage, better health coverage for more serious conditions, reproductive health benefits including travel costs for treatment, and so on.
“Employers should start internally first and take the pulse of the employee population to see what the benefits are that matter to them,” said McNeil. “What are things that would provide them with peace and supplement their lifestyle where they are at? You can have a whole suite of benefits but if it isn’t for your employees’ needs it won’t help them.”
Wellington said she agrees that benefits are being used to speak to employee engagement, which in turn helps both existing and prospective employees understand what a company really stands for.
“They’re asking the questions,” said Wellington. “They’re asking upfront exactly what the health care coverage is including. Does it include reproductive health care benefits? How do you engage with travel for medical purposes? How do you think about it as an organization?”
Other must-have benefits for 2023
Experts say that other benefits like mental health care and financial well-being are extremely important heading into the new year.
“Think outside of just traditional mental health offerings through a medical plan or employee assistance program,” said Bethany Lopusnak, benefits advisory services manager at HR company Mineral. “Focus on flexible wellness and mental health options that employees can customize or have a broader selection from.”
These benefits can range from virtual sessions about parenting skills and how to manage personal budgeting to tips for different meditation techniques and how to make healthy affordable meals.
“In a time where many employees are struggling with the economic realities of inflation or external changes, focusing on practical benefits that allow people to meet their basic needs can be a great differentiator,” said Lopusnak.
HR and benefits software firm Gusto’s principal economist Liz Wilke said that offering a 401k is a must-have in 2023, especially for small and medium-sized businesses who need to really think about their spending amid a tight labor market.
Wilke described it as the “sleeper benefit” that is “easy to overlook but the hidden gem of benefits.” While it’s a common benefit for desk-based workers in corporate jobs, that’s not always the case for mom-and-pop businesses. In fact, a small local business offering a 401k would actually be ahead of the curve when compared to other similar jobs.
“It’s a huge retention benefit,” said Wilke. Gusto’s data found that offering a 401k, even without a company match, reduces turnover by three employees a year. “As we move into economic uncertainty, people are thinking about financial stress, making it a big worry at work. Businesses looking to keep people and have engagement need to offer this.”
For example, military spouse personal assistants company Squared Away started offering a 401k plan after it became the No. 1 benefit requested by employees there. All but two of the company’s employees ended up taking advantage of the benefit.
“It’s a good idea for employers to stay connected with trends happening in the employee benefits space so that they are aware of new options and can ensure they remain competitive,” said Lopusnak. “But more important is that employers design their offerings to meet the needs of their specific employee group year over year.”