Putting plan members at the centre
COVID-19’s knock-on effects — the labour shortage and declining employee engagement — will require organizations to make wellbeing a guiding principle for employee benefits.
If organizations haven’t considered wellbeing, personalization and DEI in their benefits, 2022 will be the year to do so.
Employers will need to use data analytics and competitor benchmarking to offer personalized benefits plans
That’s largely because more employees are disengaged with their work.
But after 18 months of isolation and working from home, many employees don’t feel loyal or connected to their employers:
- 95% of the workforce is thinking about quitting
- 80% feels disengaged
- 60% of employees consider themselves a “free agent”1
Employment numbers reflect this. Employers reported 815,000 job vacancies in June 2021, a 5% vacancy rate.2 What’s more, 64% of businesses say the labour shortage is inhibiting business growth.3
As a result of workers' restlessness, organizations can’t afford to look at employee benefits in the same light as before. They will need to focus on what’s best for employees, including their mental and physical health, financial wellbeing and career path.
In essence, benefits plan sponsors will need to personalize benefits, using data analytics and competitor benchmarking to inform decision making. And because personalized benefits give workers a real connection with their benefits, it not only benefits them but increases engagement with the job.
1 Gloat, From the Great Resignation to the Great Transformation: How to Thrive During Turbulent Times, accessed October 21, 2021 (registration required).
2 Statistics Canada, “Job vacancies and job vacancy rate, unadjusted for seasonality,” August 8, 2021.
3 CTV, “These Canadian industries are currently facing the biggest labour shortages,” October 5, 2021.
Here's what to expect in employee benefits in 2022:
Since the pandemic began, the workday is longer — an average of 49 minutes longer, to be exact
Poor employee wellbeing threatens performance, productivity and engagement
1. Wellbeing will help redefine benefits plans
For some employees, the workday may have seemed endless, but the COVID-19 pandemic has made it longer.
In fact, the average workday is about 49 minutes longer than it was before the pandemic.4 In part, that extra time results from organizations being short-staffed and employees doing extra work just to keep the ship afloat.
That’s created a vicious cycle: Because employees are working longer hours due to the labour shortage, they’re experiencing higher rates of burnout, leading to an erosion of their health and wellbeing and an increase in absenteeism, health care costs and resignations.
Organizations should look at their benefits through the lens of employee wellbeing. This broader view includes physical and mental health, financial wellness, career support and other components which, if left unattended, threaten workers’ performance and engagement.
Generally, employers have responded to challenges with simple adjustments to their benefits packages, such as increased access to mental health or paramedical services. But today, that’s not enough.
For instance, workers offered upskilling opportunities during the pandemic have reported higher productivity and greater confidence in corporate leadership.5 Those attributes result in lower turnover and an organization that stands out to job candidates.
Personalizing benefits will be key in 2022 to designing benefits packages that are effective in engaging the workforce. And to personalize benefits, data analytics will come to the fore.
4 Deloitte, From survive to thrive: The future of work in a post-pandemic world, accessed October 21, 2021.
5 PwC Canada, “Canadian workforce of the future survey,” accessed October 21, 2021.
Personalizing benefits isn’t simply about more options but having relevant options for specific employee segments, improving how employees access and experience their benefits
2. Personalized benefits driven by analytics will become the norm
More than half of organizations have invested in HR technology specifically to enhance analytics capabilities,6 and that capability can pay off through personalized benefits.
Because workers have more opportunities than ever to switch jobs — and because some individuals are prioritizing lifestyle over salary — personalized benefits will be key to differentiate organizations in 2022.
Personalized benefits is not simply giving more options to plan participants, but about the most relevant options for specific employee segments, improving how they engage, access and experience benefits. Personalized benefits requires an understanding of what benefits will make a difference to specific employee segments.
Data analytics provides insight into benefits usage, highlighting gaps that voluntary benefits can bridge and helping develop a sound benefits communications strategy. Likewise, benchmarking competitors can point to new ideas for developing personalized benefits.
Data analytics and benchmarking will continue to facilitate personalized benefits, resulting in benefits packages that are relevant and cost-effective.
6 KPMG, Future of HR 2020: Which path are you taking?, November 2019.
Resilient: Insights from HUB's Employee Benefits & Retirement Practice Leaders
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Financial stress carries over to the workplace as employees spend time working on financial issues or are simply less productive
3. Financial wellbeing will become a cornerstone of benefits plans
Workers face tremendous pressures in managing daily finances and debt,7 and for employers, that pressure represents a tangible hit to productivity and engagement.
As part of their effort to alleviate employee financial stress, employers will focus on financial wellbeing to improve the workplace.
The COVID-19 pandemic led Canadians to be more cautious with their money, and 25% reported in 2020 that they were saving more because of reduced discretionary spending.8
In 2022, employee anxiety over money has not abated. Financial stress often carries over to the workplace, as employees spend time working on financial issues on the clock or simply are less productive.
As a result, organizations that want to increase engagement should figure out what their employees need most when it comes to financial wellbeing. For some employees, that may mean offering education on financial literacy, such as teaching basic budgeting, or programs to support savings efforts beyond retirement savings, including paying down debt or saving for a large purchase.
Organizations, in turn, will be relying on their benefits consultants and brokers to pave the way toward greater understanding of the employee base and finding how to deliver financial wellness. In terms of benefits, this can include access to financial planning, offering greater matching funds in a savings vehicle and providing debt counseling.
7 Government of Canada, “Canadians and their Money: Key Findings from the 2019 Canadian Financial Capability Survey,” May 5, 2020.
8 Scotiabank, “Rainy day funds top of mind as many Canadians save more, survey finds,” November 13, 2020.
Even though many organizations say they support DEI, few have a plan to reach DEI goals
4. DEI becomes fully integrated into the benefits package
Promoting diversity, equity and inclusion (DEI) not only helps an organization become more well-rounded, but can help drive positive business outcomes, especially when it’s a priority for the organization:
- 79% of employees think that a diverse organization attracts high-quality talent
- 71% prefer to work for a diverse organization that values inclusion
- 80% believe DEI initiatives improve the organization’s reputation9
However, while many (if not most) employers say they support DEI, few have a plan to achieve DEI goals. Instead, organizations are introducing single, one-off benefits that draw attention to the issues like paternity leave benefits or coverage for gender reassignment surgery.
However, that piecemeal approach is unlikely to result in diversity, equity and inclusion long-term. Within the realm of employee benefits, DEI requires an in-depth evaluation of how benefits are encouraging or hampering the organization’s goals.
9 United Minds, Diversity, Equity and Inclusion: A People Imperative, accessed October 21, 2021.
Moving forward in 2022
Because of the massive number of job openings in Canada, organizations will need to attract and retain talent through benefits.
Doing so requires personalized employee benefits. However, delivering personalized benefits requires in-depth data analysis into the workforce, identifying groups beyond age parameters and applying insights to deliver benefits that increase engagement.
Given health and wellbeing is a top priority, having expert guidance and decision support in this area is critical to protect and nurture any organization’s most important asset — their people.