Employers have been trying to address many of the same benefits challenges for the past few years, such as rising health care costs and competitive compensation. Some employers have responded to these challenges by attempting to meet employee demands, but by and large, most employers still struggle to find adequate solutions. These challenges are likely to continue through the remainder of 2024.
Understanding the latest benefits trends can help employers evaluate their offerings to best meet employee needs, respond effectively to their challenges and gain a competitive edge over competitors. Here are the employee benefits trends to watch in the second half of 2024.
Finding ways to manage rising health care costs while keeping benefits affordable for employees is a critical task for employers as open enrollment approaches; however, it won’t be easy. Health care costs have risen sharply over the last few years, and this trend will likely continue. Health benefits costs are climbing due to factors such as inflation, health system consolidation, costly gene and cell therapies, and the utilization of expensive weight loss drugs.
While employers may need to implement significant changes to mitigate rising health care costs, many will not alter plan funding or design due to the substantial risk of errors and uncertainty, even though these strategies are likeliest to mitigate the impact of rising costs.
Over the last few years, many more states have enacted laws to provide paid leave. Additionally, more employers are embracing various types of paid leave, such as family, medical, sick and bereavement leave, even when not required by law.
Volunteer leave is also gaining popularity, as it allows employees to give their time to organizations they care about. Some employers even grant paid leave for any reason. Overall, paid leave is evolving to support diverse workers and encourage family-friendly workplace policies.
Expanding paid leave benefits can be a useful talent acquisition strategy for employers since candidates and employees prioritize them. These benefits can give employees a meaningful safety net and peace of mind, helping build trust with and increase loyalty to their employers.
Employee benefits significantly impact a company’s bottom line and, thus, are a crucial factor for businesses to consider. Today’s benefits extend beyond health insurance as workers seek packages with flexible offerings that help them afford everyday purchases and save for the future. With an increasingly multigenerational workforce, employers are also faced with the challenge of designing employee benefits that appeal to all generations of workers.
Considering this, many organizations are looking closer at their benefits packages and exploring ways to expand offerings their employees will desire and utilize. More organizations are contemplating a personalized benefits model that provides employees with sustainable and valuable benefits based on their individual situations. Personalized benefits empower workers to use their benefits however they want instead of having a one-size-fits-all plan. Some common types of flexible benefits that are attractive to workers include health savings accounts, lifestyle spending accounts, emergency savings accounts, professional development opportunities, expanded paid time off and pet insurance.
Attracting and retaining top talent extends beyond traditional monetary compensation. While competitive salaries and benefits packages are essential, they no longer suffice as the sole criteria for job satisfaction and employee loyalty. As long as workers can meet their basic needs, most employees care more about their “emotional salary” than the monetary compensation. Emotional salary refers to the nonmonetary components contributing to an employee feeling adequately rewarded at work.
The concept of emotional salary is becoming increasingly important in the modern workplace because it significantly enhances employee satisfaction, engagement and loyalty. Beyond financial compensation, emotional salary addresses the intrinsic needs of employees by providing recognition, a sense of purpose, career growth opportunities, work-life balance and a positive work environment. This holistic approach may lead to higher productivity, reduced turnover, and a more innovative and motivated workforce, ultimately creating a resilient and thriving organization that attracts and retains top talent.
Anxiety has been rising in recent years and is now a top mental health issue in the workplace. Today, this mental health condition is surpassing common struggles such as depression, stress, relationship and family issues, addiction and grief.
Mental health experts aren’t necessarily surprised by the increase in Americans’ anxiety, as the U.S. Preventive Services Task Force updated its anxiety screening guidelines just last summer. For the first time, the organization’s screening recommendation applies to all adults under 65 and is meant to help identify early signs of anxiety, which can go undetected for years. Anxiety will likely continue to present challenges for employees and employers alike, especially amid economic pressures and a looming presidential election.
American workers are starting to feel better about their financial outlooks, but worries remain. Despite the improvement in financial optimism, there are still issues restricting employee financial wellness. Many are still financially stressed, worrying about inflation and the cost of living outpacing their paychecks.
Employees’ top financial goals are saving for retirement, paying off credit card debt, saving for unexpected expenses and paying off a mortgage. To help employees reach these personal financial goals, employers are poised to offer retirement planning resources, online financial tools and education to help them develop good financial habits.
Employers continue to face many of the same challenges they’ve faced for several years, which will likely continue through the second half of 2024 and into the foreseeable future. These trends highlight a dynamic and responsive approach to meeting the diverse needs of today’s employees. Savvy employers will find innovative, practical, cost-effective ways to meet these challenges. Contact us today for more information on the latest benefits trends.
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