?Both the COVID-19 pandemic and the Great Resignation prompted employers to sweeten the total rewards pot with new and enhanced perks to better help—and attract and retain—employees.
Now, though, economic uncertainty and recession fears are pushing employers to rethink their offerings—and even eye cutting benefits, research finds. But smart employers will find a way to think about what’s most important to their workers and continue to offer the benefits that matter most.
That was one of the main takeaways during a Spotlight Stage session June 11 at the SHRM Annual Conference & Expo 2023 in Las Vegas.
The overwhelming majority of employers (95 percent) reported a recalibration of their company’s benefits strategy amid economic uncertainty, according to a recent survey of 500 C-suite-level executives and HR decision-makers by Austin-based Care.com, an online care marketplace, while about half (47 percent) said they are trimming their benefits.
“That’s not a surprise if we think about the economic downturn and the changes that we’re facing. We all have to be conservative with our spend,” said Jess Marble, director of Care for Business.
So, what’s on the chopping block? Adoption/fertility benefits topped the list (cited by 35 percent of employers), followed by commuter benefits (33 percent), financial education resources (32 percent), health and fitness discounts (32 percent), home office stipends (32 percent), and learning and development programs (32 percent). Senior care benefits, 401(k) match, mental health support and child care benefits are also potential cuts.
Employers are mainly planning to cut niche benefits that can save them money and may result in less negative employee feedback than others. Cutting other benefits that are more universal will likely receive more of a negative reaction Marble warned.
“If you took away commuter benefits, you’re probably going to have a little bit less of an uproar than if you took away child care,” she said.
That’s because family and caregiving benefits, like child care and senior care options, are growing in popularity due to the vast number of employees who take care of a family member. Meanwhile, senior care options are unaffordable and unattainable for most employees, Marble said, and scores of employees with children have reduced their hours or left the workforce entirely because “paying for care often is not affordable.”
“When something happens to someone you love, it impacts you at work,” Marble said.
About 8 in 10 respondents in Care.com’s survey said child care benefits have a positive impact on productivity, and nearly as many agreed this support boosts talent recruitment and retention.
Organizations are in a tough spot trying to manage competing priorities, Marble acknowledged, and leaders need to be thoughtful in deciding which benefits will stay and which will go, if that is what needs to happen.
“We know you all are prioritizing benefits to drive productivity and to retain top talent. We know that you have very constrained budgets and resources this year to do so,” Marble said. “So, how are you determining the best benefits that will give you the most impact for your business?”
There’s one important thing employers should do before determining what is and isn’t of value to their workers: Ask them.
Marble said HR and benefits leaders should survey their employees to ask them what they are looking for from their employers. But rather than ask workers about a series of specific benefits, they instead should ask them what their pain points are.
“Don’t ask your employees what specific benefits they want. They are not benefits experts,” she said. “You need to ask them questions about the pain points that are distracting them outside of work. Ask them, ‘If there’s one thing that could alleviate the stress that you feel, what would that be? ‘ “
The other thing employers can do with surveys is leverage managers, Marble said. “Your managers are the front-line experts knowing what’s going on with your employees. They can help drive participation in the surveys; they can help encourage employees to answer those honestly,” she said.