Benefits and the pandemic: Are you stepping up?
The last several years have been a big boon for employee benefits. The market was hot, new and unique offerings were plentiful, and tech was making it easier than ever to embrace perks and deliver them to workers. We saw a rise in enviable benefits that went beyond health and retirement coverage: from generous caregiving and family-friendly policies to student-loan repayment and free tuition. Unemployment was low, competition for jobs was fierce and most employers I spoke to about strategy said improvements and additions were often the result of competing in a candidate-driven market.
What a difference a pandemic makes.
As the coronavirus outbreak radically changes every aspect of our world and our economy, it also affects employee benefit strategies. With new financial strains as a result of the pandemic and the need to compete for talent out the window for now, just how much will employee benefits be shaken up?
Some employers are dropping or decreasing coverage as a way to cut costs—frustrating to employees, yet understandable from a business perspective. Initial research from consultant Pearl Meyer, for instance, found that 6% of companies so far have reduced or eliminated employer contributions or matches to their retirement plan, and 16% are considering doing so. Other experts predict more companies will follow suit not only with 401(k) matches, but voluntary benefits and even employer-sponsored health coverage.
“Industries that have been hit hard by coronavirus are looking for every means possible to stay afloat,” says John Lowell, an Atlanta-based partner with October Three Consulting. “While matching contributions have become customary in many U.S. companies, these companies are considering them a luxury that they cannot currently afford.”
But even employers that find themselves in cost-cutting mode know that they are in a unique position to help employees during trying times. Many are turning to employee benefits as one of their coronavirus strategies—as a way to help workers through what the vast majority of Americans say is the most stressful time of their career.
I don’t need to go into all of the startling statistics about sky-high rates of anxiety, financial stress or other mental-health issues. Or about how childcare responsibilities and social distancing are putting more pressure on us. We all know it because we’re all living through it. And this doesn’t even touch upon employees’ physical health woes—those of us who catch the virus and need medical care and coverage or time off and employer understanding. To sum it all up: Support is needed, maybe more than we’ve ever seen, and some employers are answering the call.
A handful of companies are offering extra paid time off for those who are sick or self-quarantined, waiving telemedicine copays, and expanding childcare support and caregiving leave to help family members who are sick with the virus. Others are offering employees one-time financial assistance payments to help.
Many more have ramped up communication, eager to tell employees about the offerings they already have available, from telemedicine to financial wellness to childcare benefits. It’s a smart and needed move.
Employers everywhere talk about putting employees first, prioritizing their health, wellness and happiness. But what do HR and corporate leaders—and individual managers—do during a crisis? That’s when HR and benefits leaders need to put their money where their mouth is.
Ally Financial’s CHRO Kathie Patterson made the case to me recently when I interviewed her about her coronavirus strategy. Part of her strategy has been relying on benefits to help workers: rolling out new benefits—among them a $1,200 financial-assistance payment for workers—improving others and communicating existing benefits that can help.
“Our employees are struggling,” she told me. “As a company, we say we like to demonstrate a high degree of care. This is the moment you’ve got to walk the talk.”
It’s easy to make a business case for robust benefits, rewards and compensation in a strong economy and a hot job market when employers are competing for the best talent. It’s much harder to do so during an economic and health crisis, but it’s far more important to support employees in times like these. Are you answering the call?