The Employee Benefit Trends of 2024 You Don’t Want to Sleep On
Employee benefits is an area that has evolved significantly over the last five years to include things that weren’t even on people’s radar a few decades ago. Trends have shifted toward helping people achieve balance in their lives, be it emotional, financial, or work-life balance.
Things that were once nice to haves have shifted to become expectations and HR professionals everywhere are having to get more creative in how they construct benefit offerings in an attempt to attract and retain top talent and manage benefit costs.
Here’s a roundup of key trends in employee benefits, why they’re important, and how companies can adapt their policies to stay competitive.
Flexible Work Options
These days, benefits go well beyond healthcare and PTO. The first benefit on a lot of people’s minds in the wake of return to office mandates is flexible working arrangements which have been in great flux in the last year as many executives demand that people return to a more traditional work model.
The Trend
According to EY’s Future Workplace Index, roughly 60% of companies have moved to a hybrid model, highlighting that flexible work remains a priority for a majority of companies.
A move toward fully remote work has become the norm for around 20% of organizations, but as has been widely noted on LinkedIn, the number of open, fully remote positions in the job market has remained the same for more than a year now.
Why It’s Important
Flexible work options help employees maintain a better work-life balance, leading to increased job satisfaction and productivity. Many companies have adopted asynchronous working and home office stipends to further their support of remote workers and make themselves more enticing to top talent.
Policy Recommendations
Establish clear guidelines on remote work, ensure equitable access to resources, and maintain regular communication rhythms to keep remote workers engaged and aligned with company culture.
If you’re a company with a long-established culture of in-person work trying to master the transition, one thing that will certainly be required is patience.
“It's really hard, that’s the reality,” says culture architect and remote-first work experience designer Darcy Marie Mayfield. “ I've worked with a lot of teams that will hire me and say, we want to be remote first and we don't want to return to the office. And I'm like, okay, great. We'll do an audit. Here are all the things you're going to need to do over the next three to five years in order to really transition this culture to remote first. And they kind of look at it and say ‘wow, that seems really hard.’ It is! But you either want it or you don't.”
Training and Upskilling
Skills are an area where a great deal of uncertainty has been created in the last year as AI solutions have started to arrive. What skills will be needed in five years is somewhat unclear and asks questions of how employees should develop and how organizations should view roles and responsibilities in the not-so-distant future.
The Trend
Continuous learning is a popular phrase these days and here are some statistics that show why:
- 80% of people want to learn more about how to use AI in their careers. (LinkedIn Workplace Learning Report)
- Companies with strong learning cultures have higher rates of retention (57% increase) and internal mobility (23% increase).
As AI starts becoming a regular part of more and more roles, it’s necessary that training efforts come with it.
“Educating people on how to use large language models and experimenting with this technology is our number one focus,” Mary Alice Vuicic, Chief People Officer at Thomson Reuters said in our latest trends report. “It’s not only essential for business success that people start using and adopting this technology but also for their career resilience.”
Why It’s Important
As industries and roles evolve, staying current on skills is crucial. Providing training and upskilling opportunities helps employees grow and helps companies identify new roles for people while simultaneously developing leaders and increasing institutional resilience.
Policy Recommendations
Develop partnerships with educational institutions or online course providers and offer time off or reimbursements for job-related education.
Internally, you’ll want to make the most of AI tools a driver your training, whether that’s identifying learning pathways for people or assessing employee development.
Flexible PTO
Paid time off is not a universal experience in the United States with time off policies varying by industry. Tech, finance, and healthcare lead the way in the average number of PTO and sick days given.
The Trend
Job vacancies listing unlimited PTO as a benefit grew by 40% between 2019 and 2023. Unlimited PTO is still only an option that about 6% of companies have chosen, and really only popular in certain industries, such as tech.
Its gain in popularity may be waning, however, as employees have become acutely aware of a growing amount of research which has highlighted how the trend is actually worse for them than having a finite amount of PTO.
The reason for this is that employees typically feel guilty about taking a large amount of PTO, meaning they actually take less under an unlimited plan.
Additionally, companies do not pay out on unused PTO in an unlimited scenario, eliminating a large amount of liability that would be present if they had to pay out on unused time off. Given that more than 40% of Americans don’t use all their PTO, that’s a significant swing in favor of employers.
Mandatory time off is another trend gaining traction and it’s one that 31% of workers say is a top benefit, according to research from Forbes Advisor. This is just one way of helping employees prevent burnout and improve their work-life balance.
Why It’s Important
Flexible PTO policies can lead to a healthier work environment and can be a significant draw for new talent. A report from Pew Research Center noted that 62% of workers say that it’s extremely important to them to have an employer who offers paid time off.
“Of the non-medical benefits, flexibility is so important,” Keri Ohlrich, CEO and co-founder of the Abbracci Group said. “People are negotiating for more PTO or flexible PTO now like they’re negotiating for more money.”
Policy Recommendations
Implement clear guidelines to manage workload and coverage during absences, and track PTO to ensure it is used responsibly and fairly. If the company has a global footprint, you may want to consider a leave management software solution to help you keep track of things.
In terms of the amount of PTO to offer, ensure it’s competitive with other companies in your industry, but it may be best to forego extreme policies such as unlimited PTO unless you have a culture that is going to encourage and support its use.
Focus on Health Equity
Health equity refers to the principle of ensuring that everyone has the opportunity to attain their highest level of health, regardless of their economic, social, or demographic background.
It’s gaining prominence within corporate policies as companies recognize the varying health challenges faced by different groups within their workforce. This awareness is driven by a broader societal shift towards inclusivity and social justice, highlighting the disparities in healthcare access and outcomes across different populations.
As a result, employers are reevaluating how their health benefits can cover a wider range of needs and situations.
The Trend
Access to and quality of care remains a top priority for many employers. But what is often cited second priority is perhaps more important, that of health equity strategy development. For many employers, they simply don’t know where to begin.
Designing and implementing health equity initiatives that deploy technology and analytics solutions to improve health equity sounds great, but it’s not something most organizations have a ton of experience doing.
There are two key areas where initiatives are typically focused.
- Inclusive Health Benefits: Packages that cater to those with varying health needs. For example, healthcare-specific to the trans community is becoming more common as well as targeted care based on social determinants of health and demographic profiles.
- Access to Telemedicine: Increased access to healthcare through remote services increases the accessibility of care for everyone, but people with disabilities and those residing in rural areas are among those who benefit the most.
Why It’s Important
Beyond the obvious importance of improving healthcare access and quality for all, DEI efforts have been under attack and labeled hollow gestures, in some cases, by the very people they’re meant to benefit. Pushing toward health equity is a tangible way for businesses to improve the lives of marginalized communities and show that their efforts toward inclusion and belonging are more than just lip service.
Policy Recommendations
Evaluate health benefit usage and feedback from employees to tailor benefits that meet the diverse needs of your workforce. Survey your employee population on which benefits would have the biggest impact on them and their families.
Work with employee resource groups to identify what different populations need and what would have the biggest impact on their lives.
Mental Health Resources
Since the pandemic, the conversation around mental health as a part of employee wellness has continued to gain momentum and the expectation that employers will have mental health resources available to employees has become more prevalent.
Research from the National Alliance on Mental Illness shows that 83% of employees believe that training around mental health is helpful for a positive workplace culture.
The Trend
Employee Assistance Programs (EAPs) that offer mental health benefits are essentially a standard benefit offering in 2024. Companies are, however, consistently having to rethink how they offer those benefits, tying in access to mental health professionals through wellness platforms as well as through traditional therapy.
Wellness Programs have been helpful through initiatives like mindfulness sessions and stress management workshops, but these are also having to meet people where they are through digital means.
Why It’s Important
Mental health resources help improve overall employee well-being and productivity by addressing stress, anxiety, and other mental health issues.
That’s not just the personal issue of employees, it’s a critical one for businesses as a growing body of research shows that mental health issues among employees lead to reduced productivity, increased absenteeism, and high staff turnover rates.
Policy Recommendations
Ensure that mental health benefits are easily accessible and well-communicated to all employees. Conduct training sessions on how to access these benefits and encourage employees to simply give them a try, even if they feel like they may not need them right now.
Financial Wellness Education and Training
A key driver of stress in uncertain times is financial wellness. It’s been estimated that as much as 78% of Americans are living paycheck to paycheck.
With an ever-rising cost of living for the middle class and so much uncertainty around what the future of work will look like for many people, having a sound financial foundation can help ease a lot of people’s fears about the future.
The Trend
Financial wellness benefits are becoming increasingly linked with other benefit offerings. One good example is the practice of linking health savings accounts (HSAs) to retirement planning efforts, making use of the saved money for a different type of health. It can also be tied to student loan debt repayment or used as an emergency savings account.
Debt management counseling is another area that is growing quickly. People are taking more care to plan their debt management in sustainable ways and they want help, albeit a specific kind of help.
According to PwC's Employee Financial Wellness Survey, 57% of respondents say that they want to learn about financial wellness techniques and plan at their own pace. When it comes to taking action, however, they want access to an expert to validate their decisions.
Why It’s Important
Financial wellness programs can reduce stress related to personal finances and help employees feel more secure and focused at work, but they’re also key to employee satisfaction.
The same PwC survey highlighted that 73% of financially stressed respondents said that they would be attracted to a different employer who showed more care for their financial well-being.
Policy Recommendations
Offer seminars, workshops, and one-on-one financial counseling to help employees manage their finances effectively. Training should be offered across a variety of formats that account for different learning styles and needs.
Ancillary Benefits
Typically, when we talk about ancillary benefits, you might think of additional insurance offerings to cover an extended hospital stay or an ambulance ride.
While those things are still an important part of this type of benefit offering, these days, ancillary benefits are going further and encompass other areas of employees' lives than just health.
The Trend
Identity theft protection services have grown to be the most popular non-health/life insurance benefit in the U.S. given the volume of data leaks and high-profile hacks that have occurred in recent years.
Typical plans will offer coverage of financial losses up to $10,000 as well as lost wages and case management expenses.
Another popular benefit, particularly in metropolitan areas and companies where return-to-office mandates have been implemented is providing public transport passes.
By subsidizing costs for commuters, employers can help employees mitigate what can sometimes feel like an unnecessary and inefficient expense.
Why It’s Important
Ancillary benefits help employees feel assured that if something unexpected should happen to them, they’ll be able to weather the storm without going broke. They also cater to the specific needs of employees, enhancing their overall satisfaction and loyalty.
Policy Recommendations
Regularly assess the uptake and appreciation of these benefits to ensure they are valued by employees and that they are up to date with the latest trends.
Paid Parental and Adoption Leave
Welcoming a new child into the world and your home is a life-altering experience that fundamentally changes a person’s life. Particularly in the early days, with nights of interrupted sleep, hormonal changes, and adjusting to the needs of your little one.
The Trend
Companies are starting to extend the amount of paid parental leave on offer as it has been often highlighted how far behind the United States is in this area. The global average for paid maternity leave is around 29 weeks, while the average paternity leave is 16 weeks.
In the U.S., only 12 weeks of maternity leave are guaranteed by law. Paternity leave, which only about 21% of U.S. employees have access to, is much lower at an average of 17 days.
This is changing as traditional roles in the household evolve and men demand more flexibility to play their part in the early days of parenthood.
These policies have become more inclusive to cover parents from same-sex couples and those who have adopted children, but in terms of commonality, the offering is far from universal.
“There’s such a division between big companies and small companies on this one,” Ohlrich said. “Bigger companies can give more paid leave and support for adoption and pregnancy.”
Why It’s Important
Providing ample parental and adoption leave supports employees during significant life changes, promoting loyalty and reducing turnover.
Policy Recommendations
Ensure that leave policies are competitive, equitable, and supportive of all family types.
Family Planning and Reproductive Health Benefits
For those employees who want to start a family, it can be a tremendous source of financial stress and emotional trauma to try and fail, time and time again.
Treatments can be expensive and therefore prohibitive. Helping employees tackle this cost in support of their personal goals shows a level of care from employers that isn’t quickly forgotten by employees.
On the other end of the spectrum, we’re in a time when reproductive rights are in flux depending on where someone is located. Some companies have taken a stance and are providing access to medical care and contraception when needed, but as Ohlrich noted about paid leave, this is mostly true for bigger companies as smaller organizations simply don’t have the resources.
The Trend
This area has been developing on a few fronts.
- Fertility Treatments: Coverage for treatments like IVF or reproductive testing that help employees understand their options for starting a family.
- Adoption Assistance: Financial support and resources for employees looking to adopt, including paid parental leave for parents settling a newly adopted child into their home.
- Access to reproductive care: 14 states have now made abortion illegal, many with the potential of civil or criminal penalties. Helping employees work through the difficulty of pregnancy or gaining access to care can help that employee deal with the stress and mental health challenges they may be experiencing.
Why It’s Important
Supporting family building and reproductive health can be crucial for employee retention and attracting diverse talent. A study from Maven Clinic, which provides access to resources for fertility, adoption and parenting noted that 70% of Millennials would consider changing jobs to ensure they had fertility coverage.
Policy Recommendations
Create inclusive policies that support various paths to parenthood, ensuring they are clearly communicated and easy to use.
Additionally, consider the demographics of your workforce and how company values influence where it stands reproductive rights. It may be worth exploring increasing access to and support for reproductive care service providers, particularly if you operate in states that are taking hardline political stances on these issues.
Staying Up to Date
Benefits evolve. Why benefits are important to employees can differ due to factors such as age, socioeconomic status, health conditions, environment and so on.
To keep up with all the latest trends in benefits, compensation and more, subscribe to the People Managing People newsletter!