The future of benefits

Four ways employee benefits will change in 2024

The area of employee benefits continues to see rapid change, a new report has found, with record investment in benefit technologies and solutions in recent years. The report, “The Future of Benefits,” was released by the VSP Global Innovation Center and promotes the kind of discretionary benefits that the center’s parent company, VSP Vision Care, provides. At the same time, it fits with other studies in its analysis that employees are demanding a wider range of benefits and changes that fit new ways of thinking about work and benefits, including more flexibility around remote work and expanded options and choices in their benefit plans. “Employers are adapting their benefits programs to support the increase of distributed and often bifurcated workforces,” said Global Innovation Center senior director Ruth Yomtoubian. “This report captures the renewed innovation aimed at future of work investments, which will reach nearly $1 billion [in 2023], and is not only a resource for VSP, but also for our clients and partners to help stay at the forefront of advancement in benefits offerings.” The study found that remote work has led to new opportunities and challenges, as employee expectations continue to evolve. With an unprecedented level of job turnover, especially among women workers and younger employees, companies are struggling to retain valued employees. The report found that this dynamic has led to companies to increase benefits offerings by nearly a quarter, at 22% — which has in turn prompted new technologies and startup companies. “In response to these workforce trends that are both empowering and exacting, innovations in benefits — new technologies, models, and segments — have emerged to help organizations offer holistic, individualized solutions that address an employee’s unique situation and needs,” the report said.

10 trends in benefits innovation

At-home health benefits: In addition to the overall benefits around remote work, there is an additional focus on health care delivery and wellness delivered by at-home benefits. “The home is still the center of gravity for many workers, with benefits providers adopting features to allow for at-home utilization, such as remote patient monitoring or on-demand home office services—9 out of 10 health systems plan to offer home-based models for primary and specialty care in 2023,” the report said. The report listed at-home diagnostic kits, and remote health monitoring as two examples of this expanding field.

Easier access to benefits: The study said that employees want easier access to information about benefits, which will require leveraging new technologies and platforms. The study points to data indicating that a whopping 85% of employees say they are confused about their benefits options. The confusion includes feeling overwhelmed, stressed, and not having enough clear information about benefits options. One important consideration: different workers will have different preferences for communication, due to age, income, and digital access.

Stage-of-life benefits: The study also noted that the U.S. workforce is more diverse than ever, and that particular attention needs to be paid to workers at their current stage of life. “In addition to baby boomers, four other generations are part of the workforce — the Silent Generation, Gen X, millennials, and Gen Z. Organizations that aim to offer tailored benefits must focus on employees’ stages of life,” the report said. This could include a new look at benefits such as student loan forgiveness and family planning resources.

Hybrid work: The VSP study found that the changing nature of work in the U.S. has led to a need for innovations around remote and hybrid work, such as mental health services, flexible travel benefits, and upskilling platforms. The need for more flexibility in work arrangement continues to be one of the biggest HR industry challenges since the recent COVID-19 pandemic. A recent study found that 50% of HR leaders plan to continue and even extend hybrid work arrangements for employees.

Mental health support: One area of strong demand from employees is with mental health benefits. The stress of the pandemic and the popularity of remote care options have combined to make mental health services very popular, and in some ways more accessible (a shortage of providers remains a problem). This has driven a new wave of innovation around mental health benefits, including for lower-income workers.

Gamification to increase engagement and utilization: The VSP study suggests that as a way to fight employee turnover, employers can increase engagement with employees through gamification technologies. It’s not a new development, but the technologies continue to evolve and improve. One example is a Canadian company that incorporated a gamified wellness program, resulting in lower numbers in blood pressure, stress, and fatigue among employees.

Employee feedback and interaction: One area that is getting more attention is how employers can better listen to their workers and deliver benefits that truly address their needs. This can have a direct impact on recruitment and retention, as employees quickly pick up on corporate cultures that is deaf to employee concerns. One recent study found that employers believed they provided good access to benefits, but only 23% of employees agreed. The solutions may require new ways of thinking, but there are also communication tools out there that can help.

An ongoing emphasis on financial health: One area of growth and innovation has been with financial health, as employers have found a major source of stress and distraction for workers has been caused by financial insecurity. Recent studies have found that employers, especially smaller companies, want to support their employees, but often are uncertain on how to do that. Brokers and third-party vendors are stepping into the gap in identifying productive solutions for financial health approaches.

A new wave of retirement planning: Employers can be forgiven for having some skepticism about new government programs, but the passage of SECURE 2.0 does seem to have promise for expanding employee interest in retirement savings accounts. For example, the new law has new tax credits for starting up pension plans and for employer contributions to such plans. The law also may address another issue: it allows employers to contributed matching contributions to retirements savings based on student loan debt repayments. The development gives younger workers a strong incentive to start up a retirement account.

DEI remains a priority: Despite the unfortunate politicization of diversity, equity and inclusion programs, the reality is that the workforce is rapidly becoming more diverse. A number of companies and brokers are discovering productive strategies to address DEI issues. Employee Resource Groups (ERGs) have been one area with promising growth. “When businesses prioritize their ERG networks and give them value and space to contribute to business outcomes, the potential of the leadership growth, innovation, and motivation for those involved can change the face of the company culture,” a DEI director recently noted.

Design by Chris Nicholls

Illustration: Oleh/Adobe Stock

10 trends in benefits innovation

The area of employee benefits continues to see rapid change, a new report has
found, with record investment in benefit technologies and solutions in recent years.

Four ways employee benefits will change in 2024

Design by Chris Nicholls

Illustration: Oleh/Adobe Stock

A new wave of retirement
planning: Employers can be forgiven for having some skepticism about new government programs, but the passage of SECURE 2.0 does seem to have promise for expanding employee interest in retirement savings accounts. For example, the new law has new tax credits for starting up pension plans and for employer contributions to such plans. The law also may address another issue: it allows employers to contributed matching contributions to retirements savings based on student loan debt repayments. The development gives younger workers a strong incentive to start up a retirement account.

DEI remains a priority: Despite
the unfortunate politicization of diversity, equity and inclusion programs, the reality is that the workforce is rapidly becoming more diverse. A number of companies and brokers are discovering productive strategies to address DEI issues. Employee Resource Groups (ERGs) have been one area with promising growth. “When businesses prioritize their ERG networks and give them value and space to contribute to business outcomes, the potential of the leadership growth, innovation, and motivation for those involved can change the face of the company culture,” a DEI director recently noted.

Employee feedback and
interaction: One area that is getting more attention is how employers can better listen to their workers and deliver benefits that truly address their needs. This can have a direct impact on recruitment and retention, as employees quickly pick up on corporate cultures that is deaf to employee concerns. One recent study found that employers believed they provided good access to benefits, but only 23% of employees agreed. The solutions may require new ways of thinking, but there are also communication tools out there that can help.

An ongoing emphasis on financial
health: One area of growth and innovation has been with financial health, as employers have found a major source of stress and distraction for workers has been caused by financial insecurity. Recent studies have found that employers, especially smaller companies, want to support their employees, but often are uncertain on how to do that. Brokers and third-party vendors are stepping into the gap in identifying productive solutions for financial health approaches.

Mental health support: One area
of strong demand from employees is with mental health benefits. The stress of the pandemic and the popularity of remote care options have combined to make mental health services very popular, and in some ways more accessible (a shortage of providers remains a problem). This has driven a new wave of innovation around mental health benefits, including for lower-income workers.

Gamification to increase
engagement and utilization: The VSP study suggests that as a way to fight employee turnover, employers can increase engagement with employees through gamification technologies. It’s not a new development, but the technologies continue to evolve and improve. One example is a Canadian company that incorporated a gamified wellness program, resulting in lower numbers in blood pressure, stress, and fatigue among employees.

At-home health benefits: In
addition to the overall benefits around remote work, there is an additional focus on health care delivery and wellness delivered by at-home benefits. “The home is still the center of gravity for many workers, with benefits providers adopting features to allow for at-home utilization, such as remote patient monitoring or on-demand home office services—9 out of 10 health systems plan to offer home-based models for primary and specialty care in 2023,” the report said. The report listed at-home diagnostic kits, and remote health monitoring as two examples of this expanding field.

Easier access to benefits: The
study said that employees want easier access to information about benefits, which will require leveraging new technologies and platforms. The study points to data indicating that a whopping 85% of employees say they are confused about their benefits options. The confusion includes feeling overwhelmed, stressed, and not having enough clear information about benefits options. One important consideration: different workers will have different preferences for communication, due to age, income, and digital access.

Stage-of-life benefits: The study
also noted that the U.S. workforce is more diverse than ever, and that particular attention needs to be paid to workers at their current stage of life. “In addition to baby boomers, four other generations are part of the workforce — the Silent Generation, Gen X, millennials, and Gen Z. Organizations that aim to offer tailored benefits must focus on employees’ stages of life,” the report said. This could include a new look at benefits such as student loan forgiveness and family planning resources.

Hybrid work: The VSP study found
that the changing nature of work in the U.S. has led to a need for innovations around remote and hybrid work, such as mental health services, flexible travel benefits, and upskilling platforms. The need for more flexibility in work arrangement continues to be one of the biggest HR industry challenges since the recent COVID-19 pandemic. A recent study found that 50% of HR leaders plan to continue and even extend hybrid work arrangements for employees.