With engagement on the downswing even as the end of 2024’s first half nears, nontraditional employee benefits emerged as an area of opportunity for employers, HR Dive’s 2024 Identity of HR survey found.
The most popular of these options, remote and hybrid work programs, were cited by more than half of the 490 respondents as part of their talent strategies last year. That finding comes amid a seeming normalization of hybrid work for jobs that can be done at least partly remotely. According to Gallup data, 54% of full-time U.S. remote-capable jobs were hybrid jobs in February 2024.
Other programs addressing areas such as mental health, educational attainment and commuting also saw an uptake alongside traditional, core benefits like health insurance, retirement plans and bonuses.
Flexibility, mental health topped employers’ non-traditional benefit strategies
Percentage of HR professionals who said each was part of their 2023 talent strategy
The push for nontraditional benefits may speak, in part, to employers’ need to address employee well-being, which has stagnated globally, said Diana Scott, leader of The Conference Board’s U.S. human capital center. An April report from the organization found that 62% of U.S. workers said their well-being is the same or worse than it was six months ago — a warning sign given 84% said they saw employers as at least partially responsible for their well-being.
Flexibility: The most valuable benefit?
As The Conference Board dove deeper into the factors that influence well-being, it found that support for flexibility at work is one of “the most useful among a wide array of options,” Scott said. That’s because it can help employees feel in control of their work and personal lives while improving retention.
For office-based work specifically, hybrid work has become “the way it has to be if you want to optimize effectiveness and enjoyment of work,” said Debbie Lovich, managing director and senior partner at Boston Consulting Group. “I almost view it as not a benefit,” she continued. “It’s almost like it’s just the right thing to do.”
Data from WFH Research showed that, between December 2023 and March 2024, hybrid work was the most common work arrangement for employees who could work from home. Only 35% of such employees were working fully on-site.
But even for those whose jobs demand that they be on-site, employers have options, Lovich said, such as flexible shift scheduling. Other forms of flexibility include sabbaticals and mental health time off, Scott said.
These offerings require implementation efforts from all corners of an organization rather than the compensation and benefits department alone, according to Sander Domaszewicz, senior principal and national practice leader for consumerism at Mercer. To encourage flexibility, organizations have to spend time “getting into how the work is done” and ensuring managers create the right work environment, he said.
Employers have several considerations to make to ensure managers are prepared to lead dispersed teams, from choosing communication platforms to setting norms around in-office time and deciding how and when teams collaborate. “Very often, when employees are comfortable with hybrid options, it’s because leaders are comfortable managing hybrid teams,” Scott said.
Addressing budgetary concerns
Modern employee benefits strategy aims to find offerings that are highly valued by employees, said Domaszewicz, which is why employers have taken a chance on more niche perks like on-site electric vehicle charging and college coaching benefits for dependents.
Sometimes, the financial return on investment of a given benefit is not always as clear as the cultural return on investment, he added. But employers also do not necessarily need to spend big in order to add benefits employees find meaningful.
“You can offer the benefit in a voluntary way, as a partially paid program or raffle it away,” Domaszewicz said. “You don’t necessarily have to buy everything on paper in order to offer a benefit.”
Feedback leads to better benefits
To that end, employers could approach benefits program design differently by leaning into the idea of treating employees like customers, said Lovich. “When [employers] serve customers, they do deep discovery to understand their needs,” she said. “Yet, when it comes to employees, we treat them all the same.”
Sophisticated organizations take time to better understand employee needs across diverse segments, tailoring benefits offerings in turn. Whether an employer has a large LGBTQ+ population, a large caregiver population or other demographic group, it may require different forms of individual benefits to develop a better program.
Lovich gave the example of one manufacturing industry client with a largely immigrant workforce that struggled to tailor its health benefits. For this population, in which employees were often caregivers for cousins and other extended family members, Lovich said the client adopted a “household health benefits” model.
HR should keep constant communication with employees about benefits to ensure they feel valued and supported, Verlinda DiMarino, VP and head of benefits at Liberty Mutual, said in an email. Liberty makes use of surveys, benchmarking tools and data to understand what resources are most meaningful, she added.
“Our evaluation may indicate that a benefit is redundant or ineffective, and we will streamline that program to reinvest in new offerings,” DiMarino said. “This allows employees to feel like their insight matters and that we’re meeting their direct needs.”
Communication also ensures awareness of helpful offerings, and employers should confirm that managers are exposed to benefits early on, Domaszewicz said. Managers can be “champions” for specific benefits that they have found personally helpful, he added, which could help their teams understand the value of those benefits and feel comfortable using them.
At the end of the day, HR cannot bear all of the responsibility for ensuring that benefits, traditional or nontraditional, deliver expected value, according to Lovich. Executives, managers, vendor partners, employee-led groups and other stakeholders all play a part.
“Satisfying employees shouldn’t all be on HR’s shoulders,” she said.