Moving into 2022, many companies are facing challenges around talent finding, recruitment and retention. In addition, stakeholders have higher expectations concerning DEI (diversity, equity and inclusion) and ESG (environment, social and governance).
To tackle these for your company, please find my best estimates for the 10 key challenges for employee benefits in 2022, and how to utilize these to your advantage when addressing the above challenges. The 10 key challenges are based on a number of studies prepared by well-known companies in the business. Many of the findings of these studies have been confirmed in my extensive personal conversations with professionals, whom I have worked closely with over the years and are lucky to count in my network. The ranking of the respective key challenge is random as it varies based on business and market.
- There will be higher benefits spending: According to a Mercer survey, 70% of organizations have increased their benefits spending. A Benefex study shows that 65% of rewards leaders are expecting increased benefits investments.
- More of the benefits investments will be spent on health and employee wellbeing: A study by GRID Group Risk Development shows that 73% of employers will spend more on health and wellbeing in the long-term. A WTW study shows that 65% of employers see integrating wellbeing into the benefits package being a top strategic objective.
- More direct contact to and communication with the employees will be needed to ensure that the value of the benefits is recognized: In the GRID study, 71% of the respondents state that support will include more contact to the staff. The Mercer survey concluded that 62% of employees are less likely to leave their job, if they feel that their employer cares about the employees’ health and wellbeing.
- There will be more choice given to the employees concerning their benefits: Studies by Benify and GRID show that many employers are improving their range of choice. The WTW study shows that 72% of employers plan to differentiate their benefits offerings from those of other organizations. A Benefex study shows that 79% of employees are expecting more choice in their benefits.
- The benefits will be used differently by the employees: A Mercer survey shows that 81% of organizations are seeing changes in how their employees are using their benefits. Benify also shows this in their survey. “Remote or hybrid working has changed the needs of employees when it comes to benefits” is a comment I often hear in my exchanges.
- The employee experience will become more globally consistent: Mercer’s study indicates that 87% of employers see global consistency of employee experiences as a priority. This point aligns well with some of the following key challenges and how to overcome them.
- There will be more HR tech used for benefits: Nudge shows in their study that 45% of employees have turned to technology to fulfil their financial education needs. A Mercer study shows that 76% of organizations plan to spend more on HR tech.
- The benefits will become more equitable and given to all staff in order to support the DEI strategy: A REBA/AXA study has concluded that there is a big shift in the proportion of employers who tie DEI into their wellbeing strategy. An AON study shows that half of the organizations have DEI in their goals and metrics and that 52% are planning to review their compensation and benefits programs to strengthen their DEI initiatives. This is also often underlined in my personal exchanges and goes from health programs to wellbeing to pension plans.
- Employees will proactively be seeking companies with extensive ESG programs: A study by the IBM Institute for Business Value shows that 71% of employees and employment seekers consider environmentally sustainable companies to be more attractive employers. Also, Accelerist indicates that 91% are more likely to shop with a brand that supports environmental causes. According to the latest studies from ILO International Labour Organization, only 47% of the world’s population has access to at least one social protection benefits package. We talk to more and more companies in the network considering, or actively moving towards, minimum global standards for social protection benefits, Care programs for employees and family, and even fair benefits throughout the complete supply chain.
- New activities in employee benefits will need funding: This is a topic and a concern I hear often during my exchanges with my network. There are two ways funding can be compiled: either by using the natural advantages your company will receive by being more attractive to talents, having a better retention rate and having more engaged employees; or by reviewing how well your company is using the processes and tools available, which will ensure that your global benefits management and insurance-related options are optimized, so there is no money left on the table.
The objective of this list of key employee benefits challenges is not to suggest that you consider adding all of them to your priority list. Likely your company is already focusing on some areas that I have touched upon, and other areas might not be as relevant for your business. Setting priorities is often making choices.
However, this list is a good way to have an overview of what is to come in 2022. It might even give you an insight on something which previously was not on your radar. If you would like to exchange about a certain topic, or give feedback on the list, send me a message!
What will be your main challenge in employee benefits in 2022?