One Size Doesn't Fit All:
When the workplace changes, so should benefits
One Size Doesn't Fit All: While the workplace changes, so should benefits - 5/15/2020
Anyone who has been responsible for running a business and hiring new employees for very long will tell you just how diverse our world really is. In a diverse workplace or hiring field, you will find people with many different backgrounds, different skillsets, different priorities, and different stages of life. Naturally, in a setting that is this diverse, the types of benefits packages that will be needed will be very diverse as well.
Over the past decade, the job market has experienced several significant changes. The traditional model of working at the same company for your entire life and receiving a gold watch upon retirement has been fundamentally overturned. Workplaces—and people—are more dynamic than ever before.
Naturally, because many of these changes are difficult to resist or ignore, many employers are finding themselves in situations that call for savvy adaptations. How, exactly, has the workplace been changing? More importantly, how have these changes influenced the need for and distribution of employee benefits packages?
The Rise of the Independent Contractor
In 2019, a study published by the Bureau of Labor Statistics revealed that about 10 percent of all workers in the United States are currently independent contractors. While this group is clearly still a minority, it has been growing at an exponential rate and, as technology and social changes continue, it can be expected to become even more significant.
Additionally, about 1 in 5 employees are part time workers, up from 1 in 8 employees just a few decades ago. Independent contracting and part time work, in many ways, can afford employees significantly more freedom. However, they also create a situation where benefits such as health insurance, life insurance, and retirement savings can be much more difficult to access.
Data continues to suggest that in order to create fruitful and sustained relationships with these employees, employers have a responsibility to offer benefits packages. Many of these workers will gladly be willing to accept pay cuts in order to secure the benefits they need. Though these benefits packages may not have the same structure or level of commitment as those being offered to full-time employees, having the flexibility to adapt to each specific situation will ultimately be in both parties’ best interest.
Working Remotely, Changing Locations
Even before the COVID-19 outbreak, working remotely and working from home were both two trends that—especially among younger workers—were significantly on the rise. With technology (such as video chat and collaboration programs) improving and more work being done on computers, the increase in workers working away from a traditional workplace has been far from surprising.
Though working remotely has many advantages, it can also create some additional complications. For example, what happens if an employee moves to a new state, or even a new country? How does remote work influence the need for benefits? These questions can sometimes be difficult to answer. But once again, it remains clear that for an employer to maximize the value they are getting from their employees, they will need to be willing to offer at least some degree of flexibility.
Dynamism in the Workforce
Another Bureau of Labor Statistics study, published in 2019, has revealed that between ages 18 and 52, the average working American will have 12.3 different jobs. This figure is up significantly from what it was in 1960, when the average number of jobs held during this time was less than 4. Additionally, a growing portion of workers admits that they would “seriously consider” working for a competitor if the right opportunity were to come along.
Offering advanced benefits packages—which not only include health insurance, but also life insurance and retirement assets—is one of the most effective ways for employers to reduce turnover and retain their employees for longer periods of time. However, because much of this transitioning is inevitable, employers can also benefit from offering “portable” benefits that can be carried forward even after the working relationship has come to an end. While employers may be worried about making it “too easy to leave”, being willing to offer these reasonable accommodations will ultimately increase the total value of what they are able to offer each individual worker.
When asked to name the characteristics they value most in potential employers, one of the most common responses from individuals under age 40 was “flexibility.” Flexibility, perhaps unironically, can mean many different things. For some, it means being able to work whenever and wherever is most convenient. For others, it means having the ability to change their total compensation package as they’re entering new stages of life.
Many employees, particularly those just out of college, will not be particularly concerned about life insurance when they first start working. But a few years later, when they are considering getting married and considering having children, their values will likely change. It would not at all be unsurprising for this very same employee who—just a few years ago turned down life insurance in favor of a higher salary—is now willing to take a $5,000 pay cut in order to access $6,000 worth of life insurance benefits. These sorts of priority changes are natural and ubiquitous. If employers are unable or unwilling to adapt as each situation demands, they should not be surprised if their valuable employees begin looking elsewhere for work.
New Millennium, New Values
Ultimately, each of these workplace changes are representative of a society that, as a whole, is quickly changing. Technology, social structures, beliefs, and values have all been rapidly evolving. When an employee is shopping around and comparing different employment opportunities, they’ll certainly care about their salary, but they will also care about so much more. In fact, countless surveys and studies have demonstrated that prospective employees want their employers to sincerely “care” about them, even if this means accepting a minor pay decrease.
What does it mean to truly care? This question is one that will vary by situation. But what remains clear is that employers who are willing to provide for their employees and are also willing to be flexible will be the ones that will be best positioned for long-term success.