While recent variants of COVID-19 could create extra hurdles for U.S. recovery efforts, many small- and medium-sized businesses are planning to increase at least one employee benefit within the next 12 months.
This is according to the latest Principal Financial Well-Being Index, which reported an increased focus on key employee well-being initiatives and how benefits are helping employers cope with the pandemic fluctuation as they also make businesses more competitive for the next phase of recovery and growth.
“There is increased interest in a wide range of employee benefit offerings,” noted Kara Hoogensen, SVP for Specialty Benefits at Principal Financial Group. “There are a couple of trends driving this interest,” she added. “First, having lived through the pandemic over the past 18 months, there is a greater appreciation of the value of benefits on the part of employers and their employees.”
In addition, she said, “the war for talent has intensified, and employers cannot afford not to have a competitive benefits package.” According to the National Federation of Independent Business August Jobs Report, 50 percent of small business owners had job openings they could not fill. As a result, it is important for companies to have a good benefits package as they try to recruit and retain workers.
Not surprisingly, the most popular benefits offered by employers are medical, dental and vision insurance. “These are ‘tangible’ benefits for employees,” Hoogensen said. “Then you have disability income insurance and group life insurance—which provide peace of mind for policy owners.”
In addition, there are product offerings like critical illness insurance and hospital indemnity insurance, as well as “perks,” which include time off for child or elder care, and mental health/well-being days.
This focus on benefits is accompanied by changes to the way businesses are presenting them to their workforce, the survey noted. Sixty-five percent of businesses are improving digital access to benefits for employees, while only 14% lack any digital options. According to those surveyed, this digitalization addresses the need to help employees better understand their benefits (71%), onboarding employees online (62%), and the need to reduce paper (40%).
The survey also noted that there is broad agreement among employers that investing in financial-wellness programs is key to recovery. About 70% of employers surveyed agree with the positive effects of financial-wellness programs--ranging from improving employees’ long-term financial planning to helping attract and retain talent.
“We have seen increased interest in financial-wellness programs and guidance from clients over the past year, with a growing understanding that these offerings are essential not just for employees, but also for business success,” said Renee Schaaf, president of Retirement & Income Solutions at Principal. “Offering impactful financial-wellness solutions can be daunting, which is why it’s so important that businesses of all sizes and industries have access to simple, customizable solutions.”
Access Is Key
Forty-five percent of businesses see access to a financial professional as the most useful financial-wellness offering for employees. This is followed by tax-preparation services (35%), identity-theft protection (34%), and savings programs for higher education (34%).
Employees are showing more interest in financial wellness as well, driven by their recognition that the employer is an effective way to gain access to benefits. “If employees are not stressed about their financial wellness, they will most likely be more productive workers,” Hoogensen added.
So what can financial professionals and companies do to take advantage of this enhanced interest in benefits?
“The role of financial professionals is now more critical than ever,” Hoogensen said. “Now is a unique time to re-engage with clients, whose needs have likely changed over the past 18 months. For instance, what was once an often overlooked benefit like DI insurance is now gaining more interest from both employers and their employees.
“For their part, employers are listening to their employees and tapping into financial professionals to help them craft solutions that can help drive growth. With the current war for talent, companies cannot afford not to listen to their employees.”
The pulse survey was conducted among 500 companies with two to 10,000 employees. The companies span a diverse array of industries, with more than half of the employers falling within the finance/insurance, professional/scientific/technical, construction, manufacturing, and information management sectors.
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]