New trends will emerge in employee benefits and rewards in 2023 as employers look to address business pressures that may shift from talent pressures to the recession, says Matthew Gregson, Executive Director at Howden Employee Benefits and Wellbeing.
1. The Great Resignation may be over
The economic downturn will put businesses under intense financial pressure, hitting the bottom line and making it harder for them to improve rewards for their employees.
That can represent a huge challenge for employers experiencing talent challenges, but the talent landscape is likely to change too. During a recession, there is typically less movement in the labour market, as more employees value the security of their current role over the promise of a new one.
What will this mean for employers? Those who’ve already taken the last few years as an opportunity to enhance their benefits and wellbeing programme will be at an advantage in attracting and retaining employees, whilst those who missed the opportunity may be under threat or need to work much harder with what they’ve got, where the purse strings have been tightened.
2. Be aware of the ‘Quiet Quitters’
While people may stay in their jobs this year, low employee engagement is a big risk, and businesses need to be aware of the ‘quiet quitters’. Quiet quitting refers to employees who do the minimum requirements of their job and put in no more time, effort, or enthusiasm than is absolutely necessary.
Engagement is at an all-time low, with many employees still not physically back in the office regularly, coupled with increasing financial pressures and a worsening economic outlook. While people are present, they may not be productive, and businesses need to act and engage these ‘quiet quitters’.
HR and reward professionals are therefore going to be asked more and more about how they are adding to culture and employee experience – and across digital and physical (on-site) formats.
3. Do not let your wellbeing focus get behind
Wellbeing will continue to be the major theme for HR in 2023. The last two years have seen many businesses make a significant investment in benefits to close gaps in healthcare and wellbeing provision. However, with less money around, the window of opportunity for companies to overhaul their benefits is closing.
The big transition the market needs to see, which will occur this year, is a shift away from lots of point solutions, with reward teams managing 20+ wellbeing initiatives, to more holistic solutions, which offer a single place for all wellbeing needs.
4. Gender health benefits will be more common
2023 will also see the next iteration of gender health benefits. To date, the market has been dominated by companies delivering targeted solutions. However, we expect to see more health providers enter this market, offering a broader range of solutions focused on gender-specific issues, including fertility, menopause, male and female cancers and gender identity services.
We see this as an important step – as good as many engagement and digital solutions are in this space, nothing will replace the need for clinical interventions, which we believe may be best offered as an extension or enhancement to the medical plan (through their services or working with integrated partners).
This will mean asking employers to consider the whole person’s health needs and the level to which they want to support employees (from information and guidance to full clinical support).
5. Technology to drive engagement
Investment in benefits technology will continue to grow as companies look for effective ways to manage their benefits, use data to identify challenges and maximise their investment into benefits by targeting spend in the right places. Technology also plays a key role in communicating and engaging employees with their benefits.
With hybrid working here to stay, engaging and communicating existing and new benefits has been a major challenge, and we expect employers to prioritise this in 2023. Whether it’s new apps, flexible benefits, webinars or the intranet, we will see a big push to use technology to communicate and engage employees.
And at a time when budgets are tight, we expect to see employers review their existing benefits spend to re-purpose monies from benefits that aren’t as valued as anticipated to invest in more engaging and valued approaches to benefits.
6. ESG will make a big impact
With the global spotlight shone brightly on the role that governments, businesses and individuals all have to play in safeguarding our planet, 2023 will be the year when ESG starts to be fully understood by both employers and employees and positively influences more decision-making around pensions and financial plans.
With the increased requirements on larger workplaces and trust-based pension plans in the ESG space, we believe providers will enhance their ESG investment focus, reporting, and visibility for employers and members alike.
As a result, we believe there will be more demand from employees in this space, leading to assets moving to providers with stronger, more progressive approaches to pension investments.
7. Financial wellbeing will be a top priority
As the cost of living crisis deepens, financial wellbeing will inevitably be a major focus for employers. Financial education will become far broader than just pensions and include all aspects of finance – from debt management to retirement planning.
There will be a whole generation now in the workplace who have not experienced a recession before. Employers will want to ensure that this population, in particular, know how to access the support and information they need to look after their finances.
And with the financial pressures on businesses, as we outlined above, inflation-beating pay increases will be the challenge. Creativity with the solutions and services offered to employees will be key to success for many.
To conclude, 2023 will be a financially challenging year. Still, resourceful employers will look to do more with less and seek smarter ways to communicate and engage people with health and wellbeing benefits.