Benefits have proven to be a vital tool in the effort to retain employees in the pandemic-driven, hot labor market. But, with forecasts of a possible recession on the horizon and upticks in layoffs in some sectors, the benefits that have been at the center of many employers’ retention strategies in recent months may start to look a little different.
Just how different is yet to be determined, according to i4cp’s Trends in the Rapidly Shifting Talent Landscape report, based on a pulse survey of member organizations. On a broad scale, employers surveyed don’t appear to be taking drastic measures just yet to safeguard against a potential economic downturn: Majorities aren’t considering pulling back job offers, instituting layoffs, or delaying expansions and new business ventures. However, when it comes to benefits offerings, some changes may be afoot.
When asked about retention strategies, 55% of those surveyed were not considering expanding PTO programs and only about 15% were either planning to do so soon or considering it.
“I have to think part of this is because employers are slowing down or even freezing hiring altogether at the moment,” says Lorrie Lykins, vice president of research at i4cp, who notes that, for some employers, adding PTO can further strap already-overburdened workforces. “I get it, but I also caution about ruling [PTO expansion as a retention tool] out completely. Employers should continue to weigh this question: ‘Can we offer more PTO without overtaxing the rest of our workforce?’ because the answer may change.”
Also changing is the trend toward expanded caregiver benefits. At the start of the pandemic, many organizations ramped up support for caregivers—from childcare and eldercare subsidies to leave programs.
“I fear some of that may be going away, especially if the economy gets worse, which is what we saw during the recession—caregiving assistance was commonly among the first benefits cut,” Lykins says.
That may be playing out already, according to the survey. Nearly 62% of respondents said they were not considering adding new caregiving benefits, despite only 12% of those surveyed having done so already.
Pulling back on caregiving support, especially considering the lack of affordable childcare in many regions, which will only be exacerbated in a downward economy, will have a long-term impact on “people and business [that] will not be positive,” Lykins says, and will likely drive many caregivers to the door.
Despite signs of potential tightening in those areas, there are other benefits offerings that appear to be on the upswing. For instance, more than 46% are expanding or considering expanding opportunities for internal mobility, a trend that Lykins says i4cp is also seeing anecdotally among the companies it works with. From internal talent marketplaces to talent mobility platforms to “talent flow,” no matter how employers label the strategy, Lykins says, the key is “enabling talent to see what’s available to them and apply their skills and interests to different opportunities.” Such an approach is in line with the current need for organizations to “adapt quickly, restructure and redeploy the right talent,” she adds, and it will be especially key if economic conditions worsen. And given that research has shown the significant value of career development in retaining today’s talent, Lykins says, she expects interest in this area to continue to grow.
Increased investments in health and wellness benefits are also likely. Nearly 46% of those surveyed by i4cp said they are working to improve in this area—less than one-third have already done so, highlighting the opportunity that exists.
“The pandemic woke a lot of people up to how profoundly pivotal every aspect of the wellbeing of the workforce truly is,” says Lykins, noting that employers looking to enhance retention need to consider all dimensions of wellbeing: physical, emotional, financial, community, career and social. “These six elements are reliant upon one another, and our research shows that top organizations are four times more likely than their counterparts to recognize this and the impact of holistic wellbeing on their culture and brand.”
What employers do largely recognize are the employee expectations around remote work: More than 62% of those surveyed by i4cp have already increased remote work opportunities in an effort to retain employees, with another 17% planning for or discussing doing so.
No matter what turn the economy takes, Lykins notes that employers looking to remote for retention need to be more clear about what it looks like in day-to-day practice.
“The elephant in the room is that even though some may offer remote work, the ambiguity with which they communicate what’s expected, what’s OK and what’s not when it comes to remote or hybrid work is working against them,” she says. Consistency across functions and agreement among managers and leaders about the role of flexibility and remote work are also key—without those elements, productivity, culture and the employer brand could suffer.
However, those organizations that are “crystal clear in articulating exactly what remote or hybrid work means and looks like are the ones that will differentiate themselves,” Lykins says, “from those that are obviously still trying to figure it out, or worse, trying to figure a way around it—driven by the futile hope at the top of the house that remote work is a temporary fad. It’s not.”