An increased demand from employees, combined with a fierce competition for top talent, will drive non-medical workplace benefits–such as paid family medical leave, life insurance, disability insurance and wellness programs–to grow 20% by 2026, according to new research released this week. The data comes from LIMRA and EY, which surveyed employers and workers, and interviewed workplace brokers and benefits administration and technology providers to explore the different perspectives on the current and future state of the U.S. workforce benefits market.
What it means for HR leaders
The ongoing pandemic and the tight labor market–which is driving employees to leave their jobs in droves–is dramatically influencing the benefits market. While the onset of COVID-19 had several organizations step up their efforts to help employees–with COVID-19 medical leave, childcare benefits, mental health help and more–employees’ benefits expectations and appreciation continue to grow more than 18 months into the pandemic. Now, employees are demanding more options from their employers, which is driving organizations to continue to make changes to their benefits packages.
The LIMRA and EY survey finds three-quarters of employers (76%) believe their employees will expect a wider variety of benefits options in the future. The research also finds that employees have a greater appreciation for their insurance benefits: One-third of all employees–and nearly half of millennials–say their insurance benefits are more valuable to them since COVID-19. Paid medical leave (48%), life insurance (44%) and long-term disability insurance (36%) were among the top benefits employees said they were extremely or very interested in having their employer offer.
This data reiterates that HR leaders will likely need to enhance their benefits offerings to hold on to workers.
“Employers see benefits as a necessary tool to be able to compete in the war for talent,” says Patrick Leary, corporate vice president and head of LIMRA Workplace Benefits Research. “Despite 54% of employers reporting a decrease in revenue in the last year, the vast majority are not planning to cut back on benefits and almost half are considering offering a customized menu of benefits to help attract and retain talent.”