The New Era of Employee Benefits: What's Right for Your Company

In today's competitive job market, the landscape of employee benefits is evolving rapidly. Employers face a significant challenge: with over 216 benefits options in 2024, a 23% increase from just two years ago, how do they decide which benefits to offer? As employee expectations shift and the world of work becomes increasingly complex, it's essential for organizations to adopt a strategic approach to benefit offerings.

The wide array of benefits includes not only traditional offerings such as healthcare, retirement options, and paid time off, but also a growing range of niche perks—menopause support and grandparent leave, for example—that reflect the diversity of today's workforce. This article explores how employers can navigate this vast landscape, make informed decisions, and ensure their benefits packages align with both employee needs and organizational goals.

The Growing Benefits Landscape

According to the SHRM Employee Benefits Survey, the number of available benefits has surged from 175 in 2022 to 216 in 2024. This expansion mirrors changing workforce demographics, evolving societal expectations, and the increasing desire for more personalized benefits packages.

The core benefits—healthcare, retirement plans, and paid time off—remain essential, with 97% of organizations offering some form of healthcare coverage. However, to remain competitive and retain top talent, companies are increasingly looking beyond the basics. Benefits such as financial wellness programs, educational assistance, family care, and volunteer opportunities have gained popularity, and employers are exploring more niche perks to meet the diverse needs of their workforce.

“Employers are now more focused on how they can differentiate themselves in the marketplace,” explains Daniel Stunes, manager of data monetization with SHRM Data and Insights. “It’s no longer just about offering benefits that apply to the majority of employees; it’s about tailoring offerings to specific employee groups to enhance well-being and job satisfaction.”

Understanding Employee Needs Through Feedback

One of the most effective ways to determine which benefits to offer is by soliciting direct input from employees. Calven Engstrom, a data sourcing specialist at SHRM, highlights the importance of understanding employees' needs: "At the end of the day, it’s doing what you think would make your employees happy."

Many employers are embracing data-driven approaches to gather insights about which benefits employees value most. Methods such as employee surveys, focus groups, and one-on-one meetings are invaluable tools for gauging preferences.

For example, Hilton conducts an annual survey asking employees about their benefits preferences, which includes both structured and open-ended questions. By analyzing this feedback, Hilton tailors its benefits strategy to reflect employees' needs. Over time, this feedback has led Hilton to introduce caregiving and pet benefits, addressing a broader spectrum of employee life circumstances.

Similarly, Progyny, a healthcare benefits firm, uses surveys, medical claims data, and exit interviews to inform its benefits strategy. The result is a benefits package that includes parental loss leave, NICU leave, mentorship programs, and financial guides—all designed in response to employee input.

Practical Advice for Employers:

1. Survey Regularly: Make employee feedback a routine part of your benefits decision-making process. Whether through annual surveys, quarterly pulse checks, or open feedback sessions, continuous engagement will keep you in touch with evolving employee needs.
2. Analyze and Act: Survey results alone won’t drive change. It’s critical to analyze the data and take meaningful action based on the insights you gain. This could involve adding new benefits, expanding existing ones, or even discontinuing those that no longer resonate.
3. Tailor Your Approach: Not all employees value the same benefits. A one-size-fits-all strategy won’t be as effective as a personalized approach. Differentiate your offerings to cater to various demographics and life stages within your workforce.

Balancing Cost and Relevance

One of the biggest challenges employers face is balancing the cost of benefits with their relevance and appeal. While many companies would love to offer a wide variety of benefits, budget constraints often limit what’s possible.

“When deciding which benefits to offer, employers must weigh the cost of each benefit against the value it provides to employees and the organization,” says Sera-Leigh Ghouralal, a researcher at the Integrated Benefits Institute (IBI). “A benefit that’s highly valued by employees may justify a higher cost, while others that go unused or underutilized might not be worth the investment.”

Employers should also consider industry benchmarks when making these decisions. What benefits are competitors offering? Are there industry trends that suggest certain benefits are becoming more or less relevant? For example, mental health benefits have grown increasingly popular as awareness of mental health issues rises. Similarly, financial wellness programs have gained traction as employees struggle with high inflation and economic uncertainty.

Practical Advice for Employers:

1. Use Benchmarking Data: Stay informed about industry trends and competitor offerings to ensure your benefits remain competitive. Partnering with benefits consulting firms can provide insights into best practices and emerging trends.
2. Assess Utilization: Regularly evaluate which benefits employees are using and which are going underutilized. If a particular benefit isn’t being accessed, it may be time to reallocate resources to more impactful options.
3. Offer Flexible Options: Providing flexibility in benefits choices can help you manage costs while still meeting diverse employee needs. Flexible benefits packages or voluntary benefit programs allow employees to choose the perks that matter most to them.

Emerging Trends

As societal conversations around health, well-being, and equity grow, so too do the types of benefits employees expect. One emerging trend is the rise of menopause support, driven by increasing awareness and advocacy for women’s health issues. SHRM’s 2024 survey found that 17% of employers now offer menopause-specific support, with others exploring menstrual leave and other gender-specific benefits.

High-profile advocacy, such as the work of actor Halle Berry, along with proposed legislation that seeks to fund menopause research, is further encouraging employers to consider these benefits.

But menopause support is just one example of how the benefits landscape is evolving. Employers are also increasingly considering other niche benefits such as elder care, pet insurance, and even fertility benefits.

Practical Advice for Employers:

1. Stay Informed: Keep an eye on emerging benefits trends, especially those influenced by societal changes and advocacy movements. Menopause, mental health, and financial wellness are just a few areas gaining traction.
2. Promote Inclusivity: Ensure that your benefits package reflects the diverse needs of your workforce, including gender-specific, age-specific, and family-related benefits. Tailoring benefits to different employee demographics can enhance satisfaction and loyalty.

A Shift in Employee Expectations

Employees today are more willing than ever to speak up about their needs, and they increasingly expect employers to act on their feedback. This shift is particularly noticeable among younger workers who prioritize work-life balance, mental health support, and purpose-driven benefits.

“Employees want to be heard, but more importantly, they want to see their feedback put into action,” says Ghouralal. “The companies that succeed in today’s market are those that actively listen to their employees and demonstrate that they are committed to making changes.”

Employers who respond to these expectations by offering relevant, meaningful benefits not only enhance employee well-being but also improve retention and recruitment efforts.

Practical Advice for Employers:

1. Foster Open Dialogue: Create a culture where employees feel comfortable sharing their feedback and ideas. This can be done through regular surveys, town halls, or suggestion boxes.
2. Act with Transparency: After collecting feedback, communicate what changes you’re making based on employee input. This demonstrates that their voices are valued and helps build trust.

Crafting the Right Benefits Package with Axis HR Solutions

In today's competitive and ever-evolving job market, offering the right mix of benefits can be a powerful tool for attracting and retaining top talent. The key lies in understanding your employees’ needs, staying informed about market trends, and striking a balance between cost and value.

At Axis HR Solutions, we specialize in helping businesses navigate the complex world of employee benefits. Whether you're looking to build a more competitive benefits package, assess employee needs, or stay ahead of industry trends, our expert team can provide tailored solutions to meet your organization’s unique needs. Visit us at axishrky.com to learn more about how we can help you create a benefits strategy that drives employee satisfaction, retention, and success.