The term "employee benefits" refers to any perks offered to staff members in addition to their base pay. Any non-wage benefit provided to an employee, whether required or optional, can be categorized as an employee benefit, to put it simply. A comprehensive employee benefits package may include things like paid time off (PTO), profit sharing, life insurance, health insurance, and more.
Without continually giving out lavish pay rises, employee benefits might help you keep top performers on your team. Employees should be paid enough to cover their expenses and live comfortably. They may accept less money when they have good health insurance, flexible work schedules, and other amenities they value. Compensation packing is paying employees a portion of their income in exchange for benefits, which may lead to tax deductions or other benefits for both parties. Employees who engage in compensation packing forgo a portion of their pay in exchange for benefits, which may result in tax deductions or other advantages for both parties.
Because of the epidemic, employee priorities have altered, forcing businesses to review their 2022 employee benefits packages. Their physical health, mental health, and financial stability are three major concerns forcing firms to reconsider employee benefits they may have in the past disregarded.
The post-pandemic workforce's benefits requirements differ greatly from those of the past. Employers must pay attention. According to a 2021 CreditWise survey, 73% of employees said that their financial situation is the biggest source of stress in their lives.
1. Personalized benefits
Employees frequently don't completely understand the perks they've enrolled in when every employee receives an identical benefits package. In 2022, employers switched to tailored benefits to combat this. Personalized benefits not only please your employees but also benefit companies by reducing needless spending on underutilized benefits. Only 33% of employees said they understood the benefits alternatives offered to them in the same Trends in Perks poll. Only 49% of employees indicated they could correctly recall which benefits they chose from their employer-supplied package.
Employers must stay abreast of their employees' demands and base their benefit decisions on that knowledge. Provide retirement and healthcare benefits if most of your personnel are older and more financially secure. Choose benefits that promote financial health for younger employees in your company because they may be handling more delicate finances as they are just entering the workforce. Employers might offer a variety of benefits to their employees rather than offering each one to every employee. Simple employee surveys are the greatest approach to determine which benefits are most effective for your business. Allow your staff to select the benefits plan that best suits them.
2. Work Flexibility
Flexible work schedules were the second most requested from the previous year. Allowing employees to work from home does not decrease productivity. This is despite the scepticism some workforces have expressed toward flexible work arrangements. A recent Mercer study found that 94% of companies said that since individuals migrated to remote work, work productivity was the same or higher. In addition, 59 percent of respondents were more likely to select a job that allowed them to work from home, saving them an average of $500 per month and 40 minutes per day of commute time. 67 percent of employees said their workplace provides the flexibility needed to balance work and life, according to the MetLife 2020 Employee Benefits Trends report. As technology opens up options for a more global workforce and people desire to manage their work-life balance, this flexibility becomes even more crucial.
Another way businesses can demonstrate that they are paying attention to their employees' demands is by allowing remote work and flexible schedules. In a recent PWC poll, more than half of the respondents said they prefer to work remotely three days or more per week. Allowing your employees to select a daily and weekly work schedule that best matches their demands and personal lives is another example of workplace flexibility that is not just restricted to remote work.
3. Financial Wellness
The number one source of stress for workers is money, which can create worry, depression, and sleeping problems. Financial anxiety costs businesses 13–18 percent of annual income
and increases the likelihood that an employee would hunt for a new job twofold. By integrating financial wellness tools and training in their benefits packages, businesses can help their staff members refocus on their work. Employees' most often requested services are financial coaching, safety net insurance, retirement savings programs, and emergency savings funds. According to a recent SHRM poll, these initiatives help employees focus and enhance their general wellbeing, boost employee retention, and draw in new hiring
Employee benefits trends in Zimbabwe
Employers in Zimbabwe have historically provided various benefits to workers to entice them to join and keep them. Employers must regularly assess whether their benefits are in line with what employees require and their capacity to pay for and maintain such benefits. These are the advantages that employees in all sectors of the Zimbabwean economy favour, according to a study of more than 500 workers. The availability of company transport and discounted meals are the least appreciated perks. The most highly regarded benefits are home loans, kid tuition assistance, training opportunities, and car loans. When looking at benefits choice by gender, certain discrepancies, such as women's higher desire for medical assistance, which is displayed at 70% compared to men's 67 percent. This can be a result of the two groups' different priorities. The school fee allowance, which does not rank among the top five preferences for women, is of greater significance to men than women, with a male share of 63 percent.
In terms of employee benefits in Zimbabwe, the market will be dominated by the following trends in 2022.
- School fees benefit - School-fee benefits for employees' kids are a common expense for many firms. A sizeable number of employers continue to pay tuition directly to the institution. Many businesses have taken this into account in their total cost of employment model.
- Fuel Allowances Allowance: Most companies offer their employees a fuel allowance in the form of coupons or a single payment in USD.
- Most collective bargaining agreements provide transportation and housing allowances as standard benefits for lower-level employees. Since most landlords and transporters now charge in USD, employees are more likely to request these allowances in that currency.
- Medical aid/ health allowances are increasing, and some companies are paying in USD.
- With the current inflation rate, companies make the cost of living adjustments almost every month.
In the Zimbabwean market, 18% of the employee benefits are other allowances. These may include grocery allowance, USD allowance etc.16% of the allowances are the medical aid contribution and 13% of the allowances is the cost of living allowance.
Related: What are employee benefits
Employee benefits trends in Africa
Due to social and demographic trends, Africa will continue to be a desirable location for business, including its expanding labour force and growing urban population.
Governments like Nigeria's have put regulations into place requiring all firms to offer employees a minimum pension and life insurance. The demand for benefit programs that cover domestic and foreign workers will rise due to this development.
Many nations have built employee benefits sectors that provide a complete range of benefits.
However, the demand for risk management strategies is expected to rise as multinational corporations expand their presence on the continent and businesses align their employee benefits with global norms.
Employee benefits trends globally According to Pacific Prime's Global Employee Benefits Trends, plans for employee benefits will significantly impact meeting employees' demands and increasing productivity by 2021. Businesses become more aware of their significance in luring and keeping talent. The need for efficient benefits solutions keeps rising.
Additionally, in the past couple of years, there have been significant shifts in preferences and conditions (such as remote working, employee healthcare behaviour, mental wellbeing, etc.), so companies must adapt. However, creating effective benefit solutions necessitates having a sophisticated awareness of the present forces shaping the global employee benefits market in 2022.
Although it was practically difficult to foresee the employee benefits trends for 2022, there are already several developments to be aware of. Employers need to make sure they provide the most attractive benefit packages possible if they want to attaract talent. Here are the employee benefits trends for 2022:
1. Healthcare costs are expected to increase 6.5%
Plans for employee perks are a good way to let your staff members know you value them. The employer contributes a set amount toward an employee's medical expenses. These insurance plans cover doctor visits, unavoidable losses, unexpected demise, and amputation. Additionally offered are dental examinations, health exams, and other medical services. According to a recent poll by Willis Towers Watson, the cost trends for employer-sponsored health insurance are predicted to rise by 8.1% globally in 2022. The study, which surveyed medical insurers in a variety of geographic areas, discovered that cost trends are anticipated to reach as high as 14.2% in Latin America, followed by 10.6% in the Middle East and Africa, 7.6% in both the Asia Pacific and the U.S., and 6.7 % in Europe.
Medical insurers anticipate that health care cost trends will pick up speed after 2022, with more than 75% forecasting higher or noticeably higher prices during the following three years. Companies that support their employees' health and wellness will be better positioned to benefit from fewer medical claims from a more knowledgeable, healthier workforce.
2. Employers offering more voluntary benefits
Employers always look for ways to run benefits administration more efficiently while balancing cost-cutting with maintaining a competitive edge. Voluntary benefits can be useful in this situation. The Society for Human Resources Management predicts employee pay-all benefits will become more important following the pandemic (SHRM). "Employers are giving voluntary benefits to enable employees to construct a package that works for their requirements, to satisfy employee expectations and attract and retain talent," SHRM adds.
3. Big Companies up the ante
Large corporations with substantial financial resources are spending more on employee welfare. The findings reveal that most of these companies provide courses on financial success, work/life balance, and mental health. For instance, 64 percent of these companies improved child care assistance, and 83 percent have or plan to offer programs to help with budgeting, debt management, and emergency savings.
4. Retirement and financial wellness
According to the report, 91 percent of workers are more motivated to stick with a company that provides financial wellness benefits that are appropriate for them. However, only 12% of the HR experts questioned for the poll stated that their business provides employees with financial education options.
Although financial wellness is still in its infancy as an employee perk, there is evidence that businesses are becoming more interested in it. According to the PSCA study, 12.3% of nonprofit organizations—up from 8.5 percent in 2019—saw financial wellness programs as a priority for their plan participants in 2021.
The value of financial security is one of the harsh lessons of the pandemic. Many people are reconsidering their spending and saving priorities today and giving financial objectives top priority.
The good news for companies is that 75% of workers believe they are more likely to remain at their employment if it delivers benefits for their financial wellbeing (Source: Purchasing Power survey). Consider medical deductible financing, student loan repayment programs, corporate discount programs, low-interest loans, optional accident insurance to augment health coverage, and financial counselling.
5. Tuition Reimbursement
A company's dedication to providing employees chances for learning and advancement without placing a heavy financial load on them is strengthened through a tuition reimbursement program, often known as tuition aid. This has been shown to significantly increase employee engagement and retention rates while exemplifying corporate social responsibility.
An alternative method is required to provide a flexible tuition reimbursement plan that is available and meets the needs of both employers and employees. More data on employee tuition reimbursement is provided below, illuminating the importance of choosing the right program for your business and employees. · According to bright horizons survey , the majority of respondents (82%) claimed that the knowledge or degree they obtained through their employer's tuition reimbursement program made them more productive workers, and 84% said that it helped them get ready for the future of work. · In 2019 a statistica survey showed that 56% of businesses provided their staff with tuition assistance for undergraduate or graduate study. · According to Gallup research, 45% of Millennials said they would change jobs for benefits like tuition reimbursement.
6. Accepting the hybrid workplace concept
A hybrid workplace is one where staff members alternate between working in the office and from home. Since hybrid working might include a wide range of models, there is no set methodology.
More than half (54%) of workers worldwide stated they would think about quitting their job during a pandemic if they are not allowed some flexibility in where and when they work, according to EY's Work Reimagined Employee Survey 2021. The percentage soars to an overwhelming majority when it comes to individuals who want flexibility but might not be prepared to give up (90 percent).
7. Paid Vacation
Days, when an employee receives compensation for missing work are known as paid days off. Most businesses give their staff paid time off. The most crucial workers, the ones you want to hire, are becoming increasingly adamant about receiving paid time off as part of their overall remuneration.
Almost all jobs, regardless of employee tenure, offer paid vacation days. The amount of paid time off employees depend heavily on the industry. Professional and technical workers frequently access more PTO than those in service and blue-collar jobs. This is typically only given to outstanding performers. Employees in the private sector, who account for 84.7% of all workers, get paid vacation days in 76.6% of cases.
Profit-sharing can be a motivating technique that enhances employee engagement and morale while also boosting employee morale and increasing the likelihood that an organization will keep its staff. Profit-sharing is one of the best methods for inspiring people to go beyond their existing capabilities and produce better results.
Additionally, it improves staff morale and increases the likelihood that workers will stick with the company. Profit-sharing differs from revenue-sharing, is associated with employee objectives, and is included in pay schemes. While revenue sharing is linked to performance and is normally only given to top performers, profit-sharing is typically provided to all employees, regardless of performance.
60 percent of firms report increased benefits expenditures in the last 12 months. Employers must offer enticing compensation and benefits packages to retain employees and foster positive growth. Businesses will ultimately benefit from higher productivity from employee benefits initiatives.
Nolwazi Mlala is a Business Analytics Consultant at Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm.
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