2021 Employee Benefits Trends that Correspond with Company Culture
By Candace Coleman, CultureWise Content Manager
A tumultuous year headlined by the pandemic caused everyone to ponder things they never thought would happen. As a result, we started to take a more serious look at what is meaningful and necessary, and we’ve recalibrated our outlook on life. That shift in perspective has permeated the workplace as well as our personal worlds.
If 2020 had a slogan, it might have been “Let’s get real.”
As the crisis unfolded, companies scrambled not only to stay afloat but support their workers during an unprecedented time. Executives began to reassess and modify traditional benefits and methods to sustain engagement as the pandemic laid bare employees’ priorities and needs.
When COVID began to recede, many of the related accommodations employers made for staff were assessed as positive. Some of these makeshift changes, such as remote work, are becoming part of long-term business models. Companies are also addressing gaps in the employer/employee connection that the crisis brought to light.
That’s a smart move because hiring is on the rise again, and a 2020-scarred workforce has new expectations. Even during the pandemic, one in five workers voluntarily changed employers. That number is predicted to tick upwards as health restrictions continue to lift.
Now more than ever before, businesses need to reevaluate traditional employee benefits and other ways to attract and keep top talent.
A Focus on Employee Wellbeing
When the pandemic turned the work world upside down, many employers found themselves connecting with their staff on deeper levels. People’s home lives and personal challenges were factored into business interactions, and companies began to create new ways to support individuals’ wellbeing.
For many organizations, it was an improved model.
Because of this, one of the top trends for 2021 predicted by Gartner VP Brian Kropp in Harvard Business Review is that employers “will shift from managing the employee experience to managing the life experience of their employees.” The change is mutually advantageous. Employees feel more relevant and secure, and businesses have happier, more productive workers.
Kropp cites Gartner’s 2020 Reimagine HR Employee Survey to back up his perspective. The study found that employers who support staff with their life experiences see a 23 percent increase in employees reporting better mental health and a 17 percent increase in better physical health.
And employers see a 21 percent increase in high performers versus companies that don’t provide the same level of support for their people.
Kropp says 2021 “will be the year where support for mental health, financial health, and even things that were previously seen as out of bounds will become the table stakes benefits offered to employees.”
As the focus moves to address more personal needs, corporate culture will play a significant role in how these benefits are derived, supported, and put into play.
Willis Towers Watson Senior Director of Retirement Jennifer DeMeo makes this observation:
“The crisis has accelerated the shift from wellbeing as a series of programs that are “nice to have” to wellbeing as a mindset that leading companies embed in company culture.”
Employee Benefits Dovetail with Corporate Culture
A company’s culture is rooted in the conduct of the people who work there. Employees’ behavior stems from their wellbeing (how they feel personally) and the extent to which they feel aligned with their organization (how they feel about work). When employee benefits enhance both areas, they reinforce an organization’s culture.
4 Top Employee Benefit Trends in 2021 that Sync with Corporate Culture:
- Healthcare Plan Innovation
- Emphasis on Mental Health
- Ongoing Growth Opportunities
- Broader “Soft” Benefits
Rising health insurance premiums and shifting work models are making employers scrutinize healthcare plans more carefully. More companies are looking for ways to provide a menu of affordable healthcare options for different needs. Some considerations:
- Contracting directly with service providers in specialty areas
- Telehealth benefits
- Health and wellness savings accounts
- Making benefits education more accessible and understandable
- More voluntary benefits like hospital indemnity and short-term disability insurance
Healthcare benefits give staff peace of mind and employers a way to maintain a stronger team. And an increased focus on tailoring healthcare assistance to individual needs will fortify employee engagement.
Even before the pandemic, many HR budget increases were allocated to programs for mental and emotional welfare. Then COVID dramatically heightened awareness of how much mental health impacts employees and the workplace. As more people acknowledged the widespread effects of the pandemic on mental health, the topic became less stigmatized.
The Hartford 2021 Future of Benefits Study revealed that 59 percent of U.S. workers said their company’s culture was more accepting of mental health challenges this past year. Going forward, an increasing number of businesses will offer various ways to support this critical area.
Consequently, staff members will feel more comfortable being open about their problems and will participate more freely in related programs.
Organizations that make an effort to bolster mental health in the workplace demonstrate compassion and build an environment of trust. These are foundational aspects of a sturdy company culture that help forge stronger relationships between company leaders and staff.
According to research by the Society for Human Resource Management (SHRM), employers in recent years have been providing more professional development opportunities, including cross-training and career coaching. These programs not only help existing staff extend their skillsets; they rank high on many top job seekers’ lists of sought-after benefits.
Professional development initiatives can take many forms, ranging from formal classes to peer mentoring. But as business consultant Michael Timmes wrote in Forbes, they have one common feature. “They are purposeful, planned, implemented, and integrated into the company culture.”
Some development opportunities spring from the culture itself. A strong company culture is one in which the organization’s leader intentionally prioritized work behaviors that will make the organization and the people who work there thrive. Those behaviors must be constantly communicated, taught, and reinforced for the culture to reach maximum potential.
As CultureWise founder and CEO David Friedman points out, managers should “leverage every situation to teach.” When they do, employees will recognize the inherent benefit of having a continuous opportunity to strengthen their skills. This kind of growth environment allows staff to get better at what they do every day, improving their potential for career advancement and higher compensation.
In addition to bedrock employee benefits like healthcare and savings plans, there is a growing category of “soft benefits” that enhance team members’ work/life balance. During the pandemic-induced reassessment of priorities, employers began to inventory methods to help people maximize their work experience without neglecting personal needs.
The most significant shift in soft benefits is the growing trend of remote work. Many employers and their staff discovered the advantages of this model during the pandemic. Consequently, most companies have made remote working part of their strategic plan.
Employees working off-site have much more flexibility in how they approach their jobs, and they save time and money skipping the commute. The boon for employers? Research shows that remote workers are among the most productive contributors, and organizations conserve costs and get to hire from a wider talent pool. It’s a win/win construct.
The next trend in flexibility will be time. Gartner’s 2020 ReimagineHR Survey showed that 36 percent of employees working a standard forty-hour week were above-average performers. But employers who loosened restrictions on when and how much their staff works had 55 percent high-level achievers.
In 2021, expect to see more jobs where employees are measured by their output versus working a set number of hours.
Location and time flexibility were major changes that have proved to be highly successful. Now, employers are increasingly willing to offer a menu of soft benefits that accommodate workers’ needs, strengthen their connection with the organization, and help them do their best work.
Additional soft-benefit trends include:
- On-site child-care
- Elder caregiving support
- Access to legal services
- Quiet, meditation, and lactation rooms
- Corporate Social Responsibility (CSR)
- Home office expense reimbursement
- Pet insurance and other pet perks
- Paid parental leave
- Fitness reimbursement
The Culture Connection
Not only do the standard and trendier employee benefits interlock with organizational culture, but culture itself also qualifies as a significant benefit. As Glassdoor Chief Economist Dr. Andrew Chamberlain points out: “According to our data, company culture is among the top factors that job seekers consider as part of their job search.”
It’s so important that Glassdoor and other organizations have developed algorithm-based tools to help people looking for jobs evaluate and compare culture at different companies. To attract and keep the best talent, companies must have a vibrant organizational culture along with an innovative benefits package.
And a strong corporate culture does far more than improve talent acquisition and retention. When implemented correctly, a company’s culture initiative will positively impact every area of a business.
In Culture by Design, David Friedman says:
“Not only is culture the last remaining opportunity for competitive advantage in a commoditized world, but it’s the most sustainable.”
He explains how to build and sustain an extraordinary culture in the book, using the eight-step framework he developed as a CEO. A free, two-chapter download of this valuable resource is currently available.
The book inspired Friedman to create the CultureWise system, making a transformative company culture achievable for any size organization. Explore the website to learn more about this groundbreaking program.
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