The Evolution of Employee Benefits

In today’s competitive talent market, employee benefits have become a critical battleground. A basic approach to benefits now feels lackluster to most employees, particularly among younger generations who prioritize a more holistic approach to well-being. Financial stability, mental health support, and access to wellness programs are no longer seen as “extras” but as essential components of a competitive compensation package, as reported in a 2024 survey of employee benefit brokers.

Brokers reported the top nontraditional benefits requested by employers (having sensed shifts in employee sentiments) revolved around employee wellness — in the forms of mental, financial, physical, and digital health. For human resources leaders seeking to align their organizations with changing expectations, here’s the direction employee benefits winds are blowing.

The rise of nontraditional benefits

In recent years, organizations have struggled to find enough employees to fully staff their operations. Unemployment rates remain historically low, pressing employers to vie for a small pool of available workers. In the competitive job market, a more robust benefits package is a way for employers to set themselves apart.

What’s more, a trend emerged during the pandemic that amplified the already intense competition for employees: Workers are placing greater value on their time, contributions, and work-life balance. Increasingly, they want jobs where they feel valued and supported. This attitude creates a new set of expectations employers previously didn’t have to consider. For as much as employers are assessing potential employees, workers are evaluating the cultures and compensation packages of employers. In fact, Businessolver’s 2024 State of Workplace Empathy study (which surveyed more than 3,000 employees) found 52% of non-executive employees would be willing to take slightly less pay to work for a more empathetic employer.

Companies can no longer view employee benefits as solely a cost but rather a strategic investment in their human capital. By offering a comprehensive package that caters to a wider spectrum of needs, organizations position themselves as attractive employers committed to unlocking the full potential of their workforces. As the concept of employee well-being gains traction, we expect nontraditional benefits to become an even more prominent feature in the future of workplaces.

Designing a holistic benefits package for the modern workforce

Amid the employee benefits metamorphosis, employers increasingly recognize the traditional model — which has been centered on health insurance and retirement plans — may no longer be sufficient to attract and retain needed talent. Surveyed benefits brokers confirmed as much, highlighting how employers are prioritizing a broader array of benefits. The findings paint a compelling picture, underscoring the top five nontraditional benefits requested by employers during the previous year.

• Mental health support: With 91% of respondents listing it among the top five requested benefits, mental health support has seemingly become non-negotiable. These resource options can span access to Employee Assistance Programs (EAPs), telehealth therapy options, or mental health education.
• Telemedicine and counseling: The convenience and accessibility of telemedicine make it a popular request. Nearly two-thirds (67%) of brokers reported increased employer interest in telemedicine options, particularly for accessing mental health services remotely.
• Wellness programs and incentives: Well over half (59%) of brokers reported increased employer focus on wellness programs — which can include initiatives like gym memberships or preventative health activities. Employers report offering such wellness programs can lower absenteeism, increase employee retention, and reduce healthcare costs.
• Financial wellness programs: Following several years of high inflation and rising costs, financial stress is a big concern for many employees. The fourth most requested benefit revolved around financial wellness — which can include offerings like enhanced credit monitoring, financial literacy education, or access to one-on-one financial coaching.
• Digital wellness benefits: Cybersecurity concerns in today’s remote work environment have pushed more than half (52%) of employers to seek digital wellness benefits for their staff members. Employers and employees alike have grown more aware of the risks of leaked personal data in the wake of historic numbers of data breaches. An overwhelming majority (80%) of benefits brokers said employers now ask for recommendations on identity theft protection vendors, an increase of 15% since 2021.

In addition to making these benefits available, it’s critical they’re easily accessible and relevant to employees. Mobile apps, digital delivery, scalable personalization, and marketing automation are all making that connection more possible.

The interest in nontraditional benefits paints a new picture of the employee benefits landscape. Employers no longer regard benefits as a static package but rather a dynamic tool to address the comprehensive needs of their workforces.

Well-being is the future

The shift toward nontraditional benefits extends beyond simply catering to employee preferences. Studies consistently show the ROI associated with workforce well-being includes increased morale, engagement, productivity, and loyalty.

In the modern workplace, offering a competitive benefits package isn’t just about ticking boxes; it’s about creating a culture of well-being everyone can benefit from. HR leaders that champion the employee benefits evolution can help their organizations gain a competitive edge in talent acquisition, retention, and overall business success.

Shelby Gartner is Vice President of Broker Partnerships at TransUnion. Learn more about the 2024 Employee Benefits Survey at TransUnion’s site.