Benefits Added During the Pandemic Likely to Remain

As the COVID-19 pandemic upended workers' lives, employers responded by providing flexible work arrangements, addressing caregiving needs and supporting workers' emotional well-being. It now looks like many employers are planning to keep those offerings after the pandemic ends.

COVID-19 "presented a unique opportunity for employers to examine their benefits offerings and overall culture and to make changes that they may not have made otherwise," said Julie Stich, CEBS, vice president of content at the International Foundation of Employee Benefit Plans (IFEBP). "It has accelerated trends that were already in motion, brought to the forefront new ideas and priorities, and given organizations an opportunity to evaluate what works best for their workforce."

New Benefits Offerings

IFEBP's recently released Employee Benefits in a COVID-19 World—One-Year Update reports the results of a survey conducted the week of May 3, with responses from 293 U.S. employers. The following are benefits changes that organizations have made since March 2020.

Increased access to mental health benefits.

During the pandemic, 23 percent of employers added virtual mental health therapy sessions as an employee benefit, and 9 percent are considering doing so. Of those that added virtual counseling, almost all have either made it a permanent change (71 percent) or are considering making it permanent (26 percent).

Flexibility for caregiving.

Nearly half (48 percent) of respondents offered flexible working hours to accommodate employees' child care needs during the pandemic. Of those that did so, 28 percent report that the change is permanent and 46 percent are considering making it permanent.

Changes in vacation/paid-time-off policies.

The pandemic caused many employers to make changes to their carryover options for vacation days or paid time off (PTO), allowing employees more options for their unused leave time. In the last year, 17 percent of employers introduced more carryover options for paid leave. Almost one-quarter of those employers (24 percent) plan to make this a permanent change, while 17 percent are considering making it permanent.

[Related SHRM article: Pandemic Highlighted Value of Voluntary Benefits]

Workers Expect Continued Flexibility

Workers prefer a flexible work arrangement that allows them to work both onsite and remotely beyond the pandemic, according to a March survey by Randstad US, with 1,213 respondents from a cross section of the U.S. population.

The firm's Next Normal survey found that 41 percent of employers began offering new health and wellness benefits during the pandemic, with those benefits spread evenly across several new programs.

Workers want flexible arrangements even though roughly one-quarter said they start work earlier and work later into the evening while working from home.

The findings suggest that flexibility and other workplace benefits will continue to be a top priority for workers, as the remote-work experience permanently altered the way they view the nature of work.

Nearly 1 in 5 workers changed jobs during the pandemic, and while 42 percent of those who did so cited compensation as the primary reason for their switch, many also considered benefits (30 percent), the opportunity to work remotely (23 percent) and workplace culture (23 percent) as key motivating factors.

"American workers experienced a turbulent year that has forever changed their expectations for employers," said Karen Fichuk, CEO of Randstad North America. "Benefits are one of the most important ways companies can attract and retain top talent, so now is the time for employers to review their offerings to ensure they meet market expectations."

While offering new benefits comes with added costs, the upside is increased employee well-being, greater productivity, fewer absences and lower turnover, according to Randstad.

"Making an investment in health and wellness isn't just the right thing to do. It comes with measurable ROI for businesses—and our survey found that while many businesses are already making such investments, many more have some serious catching up to do," the firm reported.

Employers are "finding ways to support their employees during this challenging time," said Catherine Collinson, Transamerica Institute CEO and president of the Transamerica Institute, a nonprofit research foundation, which polled 1,903 U.S. employers in late 2020 for its June 2021 report, Navigating the Pandemic: A Survey of U.S. Employers.

How Employers Supported Workers During the Pandemic

Source: Navigating the Pandemic: A Survey of U.S. Employers, Transamerica Institute, 2021.

"As employers recover and envision the post-pandemic workplace, they have the opportunity to enhance their benefit offerings," Collinson said. "The benefits marketplace is highly competitive, and employers may find new solutions within their reach."

Changed Expectations

"Throughout the last year, many employees saw that there were gaps in their benefits packages that left them exposed medically and financially," said Kim Buckey, vice president of client services at Birmingham, Ala.-based DirectPath, a benefits education, enrollment and health care transparency firm. "With more employees looking for new jobs and companies finding it difficult to fill open positions, employers are taking a look at their benefits packages to ensure they're including the items that employees want and have come to expect."

Beyond the standard offerings of 401(k)s and health coverage, she noted, "employees will be looking for benefits that offer flexibility and support well-being, such as more robust mental health programs, flexible/hybrid work schedules, child or elder care support and financial benefits that offer them an extra cushion."

Kim Bell, executive vice president and head of health and benefits at NFP, an employer benefits broker and consultancy based in New York City, said the pandemic "highlighted opportunities to elevate support for employees, better contain costs, and enhance the effectiveness of employee recruiting and retention." 

Employers, she said, are delivering "benefits that are more meaningful to employees, more aligned with company strategy and more effective in advancing key objectives."