Here’s how employers are changing benefits due to COVID-19
More employers are turning to benefits to help employees through the coronavirus pandemic.
Despite some companies reducing costs though furloughs, pay cuts and reductions to 401(k) matching contributions, nearly half of employers surveyed by Willis Towers Watson say they’re enhancing healthcare benefits and broadening wellbeing programs as a result of the current environment. More yet are turning to leave programs and other offerings as employees report significant challenges during the pandemic.
“Although most employers anticipate a significant negative impact from COVID-19, many are taking steps to protect the health and wellbeing of their employees,” says Regina Ihrke, senior director and wellbeing leader at Willis Towers Watson. “Employers are doing what they can to support their workers through this difficult time. The pandemic has led to high levels of employee anxiety and stress, so employers are making it easier for employees to get help across all aspects of the wellbeing spectrum.”
Specifically, the survey, conducted from April 20–23, found that nearly half of the 817 employers surveyed (47%) are enhancing healthcare benefits, 45% are broadening wellbeing programs and 33% plan to make changes to paid time off or vacation programs.
Going further in wellness efforts, 77% of employers surveyed are offering or expanding access to virtual mental health services; 60% are offering new easy-to-implement virtual solutions, like virtual workouts, to support employees who work from home; and 50% say they’re promoting healthy nutrition and weight management for at-home employees. More are considering those actions, Willis Towers Watson says.
When it comes to leave programs, 42% of employers have made or are planning to make changes to PTO, vacation and sick-day programs to enhance employee flexibility and lessen the buildup of accrued days by year-end. To minimize lost days, 24% of employers are planning to increase carryover limits, and 21% are allowing negative balances. Sixteen percent require employees to take PTO or vacation time to reduce year-end buildup, and 22% are planning or considering this requirement. And, due to the COVID-19 outbreak, 12% are allowing employees to donate time to other employees, and 15% are planning or considering a donation program.
A slew of employers have turned to new or enhanced benefits since the coronavirus pandemic began. Many companies, including Amazon, Target and Kroger, are offering extra paid time off for those who are sick or self-quarantined, while Ally Financial, CVS Health, Target and others are offering employees childcare support and caregiving leave to help family members who are sick with the virus. Ally Financial, Facebook, Kroger and JPMorgan Chase handed out bonuses to help alleviate some financial stress faced by employees and help with incremental costs from working at home. Meanwhile, Boeing, Chipotle, Circle K and KinderCare recently partnered with virtual care provider 98point6 to give employees telehealth options during COVID-19. And Starbucks partnered with provider Lyra Health last month to add mental health sessions for its employees.
Still, most employers are caught at a crossroads: While many recognize the importance of employee benefits during the uncertain environment caused by the pandemic, some feeling the financial strains of the pandemic are left considering cutting expenditures such as benefits.
About one in 10 employers, for instance, have indicated plans to suspend or reduce 401(k) contributions, though many more companies are in wait-and-see mode, meaning numbers might jump exponentially in the coming months. “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.”
Still, employers that are making investments in benefits right now are not only helping employees, but also positioning themselves as an employer of choice, says Rachael McCann, Willis Towers Watson’s senior director of health and benefits.
“By taking positive actions around health, wellbeing and leave, employers are putting people first,” she says. “That’s an investment that’s likely to build employee loyalty, raise engagement and enhance future productivity.”