The future of employee benefits: assessing the impact of COVID-19

Benefits packages have long been an effective way to attract, reward and retain the best employees, and to ensure that support, if needed, is readily available.

However, in the face of COVID-19, do traditional benefits packages hold the same attraction for employees as they once did and, if not, what changes do employers need to make?

At Cezanne HR, we set out to discover if preferences have changed by surveying 750 UK employees and comparing their answers with a similar survey run in 2018.

Which benefits do employees consider the most important?

In 2018, healthcare and insurance topped the league, closely followed by perks related to either being at work, in the form of workplace socials, or getting to work, with travel-related benefits.

However, in 2021 enhanced leave has taken top position, perhaps reflecting the lock-down challenge of juggling different priorities, such as childcare. Interestingly, while extra time-off may be highly popular, many employees are yet to take the leave they are entitled to. Anonymised data collected through our hr systems and absence management software, shows a significantly higher percentage of staff are yet to book annual leave, and others are booking and then rescheduling paid time off – creating a resourcing and administration nightmare for HR teams and line managers.

Healthcare and insurance dropped to second position in 2021. However, with children returning to school, hybrid working on the cards for many and extra pressure on the NHS, it could be it will return to the top of the league in the next months. According to Towers Watson’s 2021 Global Medical Trends Survey Report, an ageing workforce, problems with access to NHS services, and the availability of new-generation and more expensive treatments are fuelling demand for private health insurance.

Unsurprisingly, the benefits that lost popularity in 2021 are those tied to being at work, while career development increased from position 6 to position 3.

Popularity in 2018 Popularity in 2021
 Healthcare & Insurance  1  2
 Workplace Socials  2  9
 Transport  3  5
 Technology  4  7
 Subsidised Food & Drink  4  6
 Wellbeing  5  8
 Career Development  6  3
 Enhanced Leave  7  1
 Financial Assistance  8  –
 Flexible Working  –  4

Which benefits are employees taking advantage of?

Both surveys reflected a mismatch between the benefits employees said they valued most, and those taken advantage of. For example, in our 2021 survey, flexible working ranked just 4th in terms of popularity, but had been used the most. Career development was at number 3, but down at position 7 for uptake, perhaps reflecting an aspiration yet to be satisfied. Perhaps most striking was subsidised food and drink benefits, where it was the second most used benefit.

2018 2021
Popularity Used Popularity Used
Healthcase & Insurance 1 2 2 4
Workplace Socials 2 4 9 6
Transport 3 6 5 9
Technology 4 9 7 5
Subsidised Food & Drink 4 8 6 2
Wellbeing 5 1 8 8
Career Development 6 5 3 7
Enhanced Leave 7 3 1 3
Financial Assistance 8 7
Flexible Working 4 1

Why is this important to HR?

Providing employee benefits is far from cheap. Offering the wrong balance of benefits wastes precious resources and wrong-foots the organisation when it comes to competing for new employees and retaining existing ones.

With organisations increasingly relying on a multi-generational and diverse workforce, demographics must also be a key consideration. Our survey found that men and the 54+ age group considered healthcare to be the most important benefit; women and the 18-24 age group valued enhanced leave the most.

The pandemic provides an opportunity for HR teams to review the purpose of employee benefits and revisit the value to both the organisations and its employees. While organisations and employees adjust to the ‘new normal’, flexibility will be key, as will innovative ways of delivering benefits. A significant number of private medical companies now offer online consultations, wellness perks or social events, such as physical gym membership and group gathering, may need to be available in a virtual world for a while to come.