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Priorities Shift as Pandemic Recedes, SHRM 2022 Employee Benefits Survey Shows

Benefits practices are continuing to evolve as businesses return to a 'new normal'

A blue book with the word company benefits on it.

When the COVID-19 pandemic struck, businesses across the U.S. were forced to rapidly adapt, which included changing their benefits offerings to help employees survive the pandemic's sweeping economic effects. These shifting practices are continuing to evolve as businesses return to a "new normal" of hybrid work arrangements, according to the Society for Human Resource Management's (SHRM's) 2022 Employee Benefits Survey.

SHRM Research conducted the survey from Jan. 11 to Feb. 28, 2022, collecting responses from 3,129 HR professionals at organizations across all sizes, industries and sectors. Respondents were asked about employee benefits their organizations offer during 2022. The findings were released June 12 at the SHRM Annual Conference & Expo 2022 in New Orleans.

As a member-exclusive benefit, SHRM offers an Employee Benefits Survey Results interactive online tool (accessible through the survey link above) that allows users to filter results from the Employee Benefits Survey according to organization size, industry and location.

Priorities Get Reordered

During the first part of the COVID-19 pandemic, employers felt health, leave and flexible work benefits were most important to offer their employees. Meanwhile, employees felt retirement savings benefits were less important at that time, with many often reducing or eliminating 401(k) matching contributions, for instance, and cutting back on professional development offerings.

SHRM researchers compared this year's survey results with the last employee benefits survey SHRM reported.

"Employer rankings of the importance of benefits shifted drastically in 2020 as they made pandemic-inspired adjustments, but these rankings have returned to an order like that seen pre-pandemic as businesses regain a semblance of normal operations," said Daniel Stunes, senior researcher at SHRM.

Significantly, however, "all benefit types were rated by employers as more important to offer today than before the COVID-19 pandemic," Stunes said, reflecting an increased appreciation for the role benefits play in fostering employee well-being and in attracting and keeping talent in a tight labor market.

Health Care Keeps Top Spot

Despite a modest pullback in offerings from the height of the pandemic, employers continued to view health care as the most important benefit organizations can offer. Given the rise in health concerns brought about by the pandemic, "it comes as no surprise that health care remains the leader in ranked importance," Stunes said.

Almost all respondents said that their organizations offer some type of health care plan to their employees:

  • Nearly three-quarters (72 percent) of organizations offer a fully insured health plan, meaning that they pay a fixed premium amount to an insurer who then pays the medical claims.
  • Just over one-quarter of organizations (26 percent) said their health plan features a self-insured plan, meaning they pay medical claims themselves, often through a third-party administrator.

Medical flexible spending accounts (medical FSAs) and health savings accounts (HSAs) continued to be the most popular type of health-related spending accounts, with 63 percent and 57 percent of employers offering them, respectively. Nearly two-thirds (63 percent) of organizations that offer an HSA said they make employer contributions to these plans.

Group coverage health reimbursement arrangements (HRAs), funded solely by employers, continue to trail other consumer-directed health accounts, offered by 16 percent of respondents.

Enhanced Telehealth and Mental Health Care

While the perceived importance of some core benefits has returned to pre-pandemic levels, COVID-19 "resulted in seemingly lasting changes among some offerings," said SHRM researcher Derrick Scheetz. For instance, 93 percent of organizations now provide access to telehealth care as a benefit, he noted. Since last recorded by SHRM in 2019, the prevalence of this benefit increased by 20 percentage points.

Similarly, employers indicating they offer mental health coverage also hit a new high of 91 percent.

The strong growth in these benefits, even after businesses have returned to more normal conditions, indicates that job candidates and employees in the future "may view these as 'table stakes' that employers are expected to offer," Scheetz said.

Retirement and Savings Gain Ground

Possibly serving as a proxy for recovering financial health, employers ranked retirement and savings benefits among the most important. "After falling in ranked importance during the height of the COVID-19 pandemic, this return to form shows that employers still strongly believe in the importance of benefits that help to provide financial security," Scheetz said.

In 2022, most employers offered some type of retirement savings plan to their employees:

  • 94 percent offer a traditional 401(k) plan, funded with pretax dollars that are taxable as income when withdrawn during retirement. When employees contribute to traditional 401(k) accounts, 83 percent of plan sponsors matched those contributions, capped on average at 6.8 percent of employee's base pay.
  • 68 percent offer a Roth 401(k) as well, funded with post-tax dollars that may be withdrawn tax-free after retirement. When employees contribute to Roth accounts, 76 percent of plan sponsors provided a match, capped on average at 6.7 percent of employee's base pay.

Under current law, employers' matching contributions for employee Roth contributions must be made to pretax 401(k) accounts, although Congress is considering legislation to allow match contributions to be made to Roth accounts.

In addition, the survey showed that:

  • Automatically enrolling new or existing employees in the company's retirement plan, unless employees opt out, was a feature in plans sponsored by just over half (51 percent) of organizations. This figure has held steady since the onset of the COVID-19 pandemic.
  • Automatically increasing employees' contributions unless they opt out, generally done annually with a deferral increase of 1 or 2 percent of pay, also held steady, with 26 percent of plans including an auto-escalation feature.

Rise of Hybrid Work

Sixty-three percent of employers said they offer most of their workers the opportunity for hybrid work, which involves a combination of working remotely and in person. During the pandemic, employers and employees learned that "remote work works," Stunes said, and "today, more people want the flexibility to work remotely at least part of the time or when they need to do so. Businesses have discovered that they may need to consider offering hybrid work opportunities to attract job applicants and keep employees."

Across all organizations, 62 percent said they offer employees a subsidy or reimbursement for at-home office or work equipment. Among those organizations:

  • Employers, on average, provided about $891 to employees to cover costs related to working from home.
  • Most employers (95 percent) cover costs related to work technology, such as computer monitors, keyboards or headsets.
  • Over two-thirds (68 percent) cover costs related to general office supplies such as pens or notepads.
  • 24 percent said they cover the cost of chairs for employees working from home.

Parental Leave Scaled Back

Leave benefits remained among the top-ranked benefits that employers felt an organization should offer, the survey showed.

Despite its strongly ranked importance, however, leave for new parents (beyond what's required by law) returned to pre-pandemic levels after all types of leave reached their highest prevalence in 2020:

  • The number of organizations offering paid maternity leave dropped to 35 percent in 2022, down from 53 percent in 2020.
  • The number offering paid paternity leave fell to 27 percent, down from 44 percent.

Additionally, the number of organizations offering paid adoption leave dropped to 28 percent (down from 36 percent), and the number offering paid foster child leave dropped to 22 percent (down from 28 percent).

New-parent benefits saw "a big bump in 2020 relative to prior years, which we can now say was likely a direct response to needs created by the pandemic," Scheetz said. "Now that many businesses have returned to a more typical way of operating, employers seem to be dialing back on expanded parental-leave opportunities."

The greater ability of new parents to work from home also may have lessened employers' commitment to provide paid parental leave, although that belief may overlook the need for parental bonding time with new children.

Help with Family Caregiving

The COVID-19 pandemic also highlighted the often-conflicting demands of caregiving and work, although in 2022 these responsibilities remain important:

  • Over half of respondents (59 percent) said their organizations offer a dependent care FSA, which allows employees to save funds directly for expenses related to caregiving, down from 64 percent who offered this benefit in 2020 but close to the 60 percent offering dependent care FSAs in 2019.
  • 31 percent said they would allow employees to bring children to work in an emergency as a benefit, up from 27 percent in 2020.

Professional Development and Tuition Aid

The number of employers that viewed professional development benefits as important to offer rebounded in 2022 after falling off during the pandemic, with 78 percent of organizations now paying for opportunities to develop new skills, up from 74 percent in the 2020 survey.

However, the percentage of employers offering undergraduate or graduate tuition assistance fell during the pandemic and has yet to rebound. This year, 48 percent of employers are paying at least some tuition costs, up one percentage point from 2020 but off the peak in 2019, when 56 percent of organizations provided tuition aid.

Student loan repayment assistance was offered by 7 percent of respondents this year, down from 8 percent in 2020, which Scheetz said might reflect some trimming back by employers dealing with tighter budgets or might just be due to the normal difference in sampling factors between surveys. Look to future surveys to show whether growth resumes for this still relatively new benefit.


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