Over the past two years, both organizations and their employees alike have had to navigate a broad range of challenges at top-speed, constantly shifting strategies, redefining their priorities, and changing the overall layout and functions of the workplace. As a result, the workplace has become an ever-evolving, elusive sphere to define, blurring the borders between physical and virtual, private, and public spaces unlike anything we’ve seen before.
This year in particular was no exception. Following the gamechanger that was the COVID-19 pandemic and the proliferation of remote work that it inspired—which further dissolved work-life boundaries—employers are now finding it increasingly more difficult to avoid additional disruptions from rising social, political, economic, and environmental issues, and are finding that their employees are now struggling with urgent health-related needs outside of what their traditional benefits offerings cover.
For instance, by the end of 2022, we witnessed the mental, emotional, and organizational fallout of a snowballing financial crisis and the unprecedented number of layoffs it’s caused so far, in conjunction with an unceremonious return to the office for most workers, as new survey data shows that workplace mental wellness has reached an all-time low amid growing anxiety over job security, employee burnout reaching levels not seen since the height of the pandemic, a concerning rise in presenteeism, and of course, the sharpest decline in worker productivity since the 1940s.
Even more alarming, however, is the continuation of the Great Resignation, as just over 4 million workers in the US alone are still leaving their jobs each month, according to latest data from the Bureau of Labor Statistics, while new findings from McKinsey show that more than half of these resignations or switch-overs are the result of factors including financial stress and job insecurity, toxic workplace culture and leadership, and insufficient benefits. This is making it increasingly difficult for many organizations to both attain and retain talent amidst nearly a decade-high talent shortage, as more than three-quarters of employers across all industries report difficulty finding the talent they need.
As we are now practically certain to enter into a global recession in the coming year, these talent pools may start to improve. But in order to attract the talent that many are now in desperate need of, it is imperative that employers position themselves as organizations that these prospective recruits will want to work for. And that starts with aligning benefits packages with the current wellness needs of a battered workforce.
How Things Are Going: A Snapshot of the Current State of Employee Wellness
Current survey data reveals a global workforce that has been overwhelmed by stress and a host of mental health issues after two years of lockdowns, COVID-19 restrictions, constant changes to the structure of the workplace, and most of all, a perpetual state of uncertainty.
Research from McKinsey finds that nearly three in five of these workers report worse employee experience metrics, including low motivation and engagement, poor job performance and connections with peers, and poor attendance. Nearly two-thirds of employees are emotionally detached from work, Gallup’s State of the Global Workplace: 2022 Report shows, while about a quarter openly admit to feeling miserable at work. This comes as Gallup reports that just 21 percent of employees are actually engaged at work, while only a third are thriving in their overall wellbeing.
What This Means for Employers
For employers, these statistics are a serious cause for alarm. Not only does stress negatively impact workers’ health, wellbeing, and attitudes toward their work, but it also comes with serious ramifications for the overall efficiency of the organization. This includes poor profitability and retention, as well as bigger financial losses, as research shows that:
- Organizations with miserable workers make nearly a quarter less in profits than organizations with happy, engaged workers.
- Stressed-out employees are four times more likely to want to leave their organization—and nearly three times more likely to do so.
- An estimated one million workers in the US alone are absent every day due to stress.
- Stress and related illnesses, absenteeism, and presenteeism cost organizations as much as $300 billion a year, while mental health issues like depression and anxiety cost the global economy up to $1 trillion in lost productivity a year.
- Work-related stress costs more than $190 billion and €20 billion in annual healthcare costs in the US and UK, respectively.
- A lack of engagement costs the global economy over $8 trillion in lost productivity each year.
Why Wellness Matters
While employers simply can’t and aren’t expected to solve all of the problems that their employees may be facing, they can help to alleviate some of the symptoms or consequences that such problems cause through their benefits offerings. In the past, competitive pay, basic health insurance, and retirement benefits have all been enough to attract and retain talent, and satisfy employees—and thanks to the impending global recession causing many workers to feel a sense of financial and job insecurity, these benefits still hold some weight. But new survey data finds that, for many of today’s workers, their employers’ benefits packages no longer satisfy their needs.
This poses yet another considerable threat to the efficacy of their organizations, as studies show that many employees are likely to leave their jobs due to inadequate benefits offerings, or because they found better benefits or perks through another employer. On the other hand, however, new insights from the 2022 Metlife Employee Benefit Trends study found that nearly three-quarters of respondents say they would stay at their current employer longer if they had a wider and stronger selection of benefits. For these reasons, in conjunction with the ongoing war for talent, new findings from Mercer show that nearly seven in 10 of all large employers are planning to enhance their benefits offerings in 2023—particularly, their wellness benefits.
As the Great Rethink lives on as employees reexamine their career interests, prospects, and by extension, how they want to be treated by their employer versus how their employer is currently treating them, more employers are now investing in wellness benefits to demonstrate that they care about their workers’ wellbeing. These investments are likely to pay off, as new research reveals that nearly nine in 10 employees say they feel more motivated and more satisfied at work when their employer exhibits a strong commitment to their health and wellbeing. Not only that, but employers who already offer wellness benefits and/or implement a wellness program report drastic declines in absences, work-related illnesses, and hospitalizations, as well as significant financial growth and improved performances.
As new data reveals that over eight in 10 employees say they look for employers who are willing to support them and help them achieve strong work-life balance, investing in wellness benefits might just be the key to finding and retaining talent in 2023.
Where Things Are Headed: Trends to Watch
With that in mind, here are some of the top wellness trends that employers should pay close attention to as they look to revamp their benefits strategies ahead of the new year:
- Mental and behavioral health take center-stage. Recent survey findings show that about eight in 10 employees (up to 91 percent of Gen Z workers) say they want to work for an employer that offers comprehensive mental health support as part of their benefits offerings. This comes as roughly a third of workers say that their mental health has worsened over the past year. In response to rising demand, employers have now made improving access to mental health and behavioral care their number one concern, as nearly three-fourths now have wellness initiatives focusing on mental and emotional wellbeing—a statistic that over 90 percent of employee benefits leaders say will continue to grow over the next three years.
According to Mercer’s Health and Benefit Strategies for 2023 survey report, nearly two-thirds of employers plan to enhance EAP services ahead of next year, while about a third plan to offer training to managers and employees on how to recognize behavioral health issues in employees and refer them to the right resources and about a quarter plan to conduct behavioral health anti-stigma campaigns. Furthermore, a large number of employers also plan on offering PTO for mental health days, if they do not already, and seek to encourage open dialogue about mental health in the workplace. Findings from SHRM reveal that over nine in 10 employers also say they now provide mental health coverage, including access to free sessions with qualified counselors as well as access to 24/7 crisis hotlines.
- Financial wellness comes to the forefront. Even before the current economic crisis came into the picture, nearly half of younger workers alone had been living paycheck to paycheck, and cited the cost of living as one of their greatest concerns. According to SHRM, financial stress can result in a 34 percent increase in absenteeism and tardiness, as well as lower motivation and engagement, and costs organizations in the US alone more than $500 billion each year. For this reason, over eight in 10 of both employees and employers alike rank financial benefits as the most important types of benefits that employers can offer.
There are a few paths to take toward improving employees’ financial wellness. According to Employment Hero’s 2022 Wellness at Work Report, most employees say that their employers can best support them through additional pay or subsidies that reduce personal costs. For younger workers, this includes tuition fee reimbursements and contributions to student loan debt. But new research also finds that providing more flexible assistance may be the most efficient way to satisfy workers’ diverse financial needs. In a recent survey examining the value of PTO, findings revealed that while some employees may take advantage of more PTO, others may prefer to convert their accumulated time off into other financial resources based on their needs, such as cash for emergencies, student loan payments, funds for retirement, or healthcare savings. By granting workers this flexibility when it comes to accessing financial support can help them better cope with and mitigate financial stress in the long run.
Another way to support workers financially is by hosting workshops, in-person or online seminars, and financial wellness coaching to improve their ability to manage their own finances. According to new insights from Morgan Stanley, more than half of employees say that working with a financial advisor is the single most beneficial financial tool that their employers can offer.
The biggest—and arguably most common—way that employers can provide financial assistance to their workers is through healthcare and retirement savings and planning benefits. As of 2022, virtually all employers offer some type of retirement savings plan while nearly 75 percent offer a fully-insured health plan. With a global recession on the way, many employers are now focusing on improving healthcare affordability and retirement accessibility for their employees, including providing contributions to retirement plans, providing medical plans with either low or no deductible, and covering 100 percent of healthcare premiums.
- Flexibility remains both a key desire and selling point. According to new findings from the Harris Poll, flexible schedule is the number one benefit that workers say they want most, and employers are increasingly meeting this demand. More than three-quarters of employers say they will allow or continue to allow employees to regularly work from home in 2023, while roughly two-thirds offer or plan to offer hybrid work schedules or a four-day workweek, additional findings from Mercer’s survey report reveal.
This is helpful not only to employees, but to employers as well. For instance, G2i’s 4 Day Work Week whitepaper recently found that over 60 percent of organizations found it easier to attract talent after switching to a four-day work model, while many noted an increase in productivity and quality of work. More importantly is the fact that flexible working hours can greatly reduce and even help to avoid employee burnout, according to senior HR leaders, as employees faced with unreasonable time constraints are found to be 70 percent more likely to struggle with burnout.
Ultimately, in today’s rapid-paced world, employees no longer want to have to organize their personal life around a rigid work schedule when the tools and technology are there to allow them to work under a more flexible and hybrid schedule that will help them to better balance both work and life priorities. And given the benefits such flexibility provides with minimal costs, more employers are adjusting to more lenient working models in the coming year.
- Physical and nutritional health become a priority. After the series of disruptions that the pandemic caused to employees’ diet and exercise regimens, more employers are now starting to recognize the importance of supporting their workers’ nutritional and physical health. Even before the pandemic, it was estimated that nearly two-thirds of workers do not eat healthy, while over half do not get enough exercise; even something as simple as consuming enough water is reportedly a struggle for more than 75 percent of employees. This poses a considerable threat to the prospects of their organizations, as employees with unhealthy eating and exercise habits are found to be 93 percent more likely to be unproductive at work, while employers with unhealthy employees report more sick days, higher healthcare costs, and greater presenteeism.
Thankfully, however, wellness benefits have been shown to not only prevent these outcomes, but even reverse them. More than half of employees who utilize their organization’s wellness benefits report having fewer sick days and say they’re more productive at work. In 2019, roughly eight in 10 employers reported higher productivity and worker performance, as well as a considerable reduction in sick days and healthcare costs, and a six-to-one ROI thanks to implementing wellness programs. As a result, nearly nine in 10 employers now offer at least one wellness benefit.
Common wellness benefits include nutrition education, including free classes or workshops with a trained nutritionist; corporate gym memberships, as well as access to virtual fitness classes including online yoga or Pilates, or subsidies for event registration fees like marathons, charity walks, and tournaments; subsidies for standing desks at work as well as home fitness equipment; and workshops focused on healthy eating, weight management, tobacco cessation, fitness training, the importance of sleep, and establishing and maintaining a healthy routine.
- Employers offer more opportunities for professional and career development. Perhaps the biggest factor driving the rise in quiet-quitting and the continuation of the Great Recession is a lack of career development or advancement, as new findings from Statista reveal that nearly half of employees who quit their jobs between April of 2021 and 2022 cited that as their principal reason for leaving. This can prove costly for employers, as one study from Gallup found that replacements can cost up to 150 percent of a staff’s annual salary, while additional evidence suggests that a lack of progression at work can result in a greater risk of burnout.
On the other hand, many studies show that employers who prioritize employee training and skills development experience higher rates of productivity and employee retention, and earn greater profits than their competitors without development programs. According to SHRM’s 2022 Employee Benefits Survey, nearly eight in 10 organizations now offer opportunities to develop new skills as part of their benefits offerings, with a majority of employers now hoping to expand such offerings heading into 2023. One commonly cited benefit that employees would like to receive from their employers in the coming year is coverage for online skill-development courses, as well as increased access to technology-driven virtual classes, flexible learning opportunities (encompassing video, text, audio, and mobile formats), and traditional instructor-led trainings on topics such as computer and software skills, customer service and communication skills, and HR and work ethics training.
- The scope of employee benefits is expanded. Another growing trend among employers ahead of 2023 is the expansion and diversification of benefits offerings. For instance, just in the past year alone, employer-ranked importance of family care benefits has witnessed a near 20 percent growth, as employers hope to expand family-friendly benefits in the coming months. Such benefits include paid parental or adoption leave, which over 70 and 53 percent of employers say they are currently offering or plan to offer in 2023, respectively; fertility treatment coverage and adoption and surrogacy benefits; on-site childcare or referrals to external childcare services; and benefits to support reproductive health, including family planning assistance, on-site lactation rooms, support for high-risk pregnancies, bereavement leave, and menopause support.
Many employers are also looking into providing targeted health-related benefits to support LGBTQIA+ employees and employees with disabilities, including inclusive family-building support, coverage for tests and treatments including hearing aids, cochlear implants, and other body support devices, and enhanced speech, occupational, and physical therapy benefits, Mercer’s survey report reveals. Many employers are also now considering providing coverage for gender-affirming care, including gender-confirmation surgeries, hormonal therapy, prescription drugs, and gender-affirming therapy, after research shows that such benefits are an effective protective factor against mental health issues like anxiety and depression, and can significantly reduce the likelihood of suicide.
Tips on How to Further Improve Wellbeing at Work
In addition to improved benefits offerings, survey data also reveals trends in employees’ interest in a more inclusive, benevolent, and collaborative workplace—particularly among Gen Z and Millennials, who now make up roughly 40 percent of the working population. New findings from Deloitte show that these workers are disproportionately impacted by stress and burnout, and that the culture at work plays a starring role in determining these outcomes. Overall, over nine in 10 workers admit that their organization’s culture has a “great deal of impact” on their decision to stay with their current employer, including nearly half of millennial, Gen Z, LGBTQIA+ and caregiving workers.
With that in mind, here are some key ways in which employers can improve the culture of their workplace to fit their workers’ needs:
- Practice strong employee benefits communication. Enhancing benefits offerings is only one part of the equation to establishing a more supportive and conducive workplace. Employers who want to set themselves apart from competitors and boast happy and healthy workers will need to put in the work to make sure that their employees are taking advantage of the perks available to them, and that can only be achieved through strong communication. New survey data reveals that nearly three-quarters of workers feel certain that they are missing out on benefits communications, while only about 40 percent feel as though their organization’s benefits communications is easy to understand. Without a solid understanding of where and how to access benefits—and what exact benefits are available to them—employees are less likely to use them, wasting employers’ investments and hurting the organization’s overall prospects.
On the contrary, research shows that when employees receive clear and frequent communication from their employer about benefits, they’re 177 percent more likely to have a strong overall wellbeing and 156 percent more likely to feel valued and appreciated at work. According to a new study by Limra, roughly seven in 10 employees say that they would like to receive news and information about employee benefits at least a few times throughout the year. Additionally, Tracy Watts, senior partner and national leader for US health policy at Mercer, recommends that designating staff members to be on-the-ground benefits ambassadors can further boost usage of benefits, advising that communications is “not just telling people about the benefits, but perhaps including stories about how [others] benefitted from it.”
- Prioritize sustainability and corporate social responsibility. Younger workers are increasingly seeking work—and employers—who align with their values and personal ethics. According to Deloitte’s Global 2022 Gen Z and Millennial Survey, nearly two in five respondents said they have rejected a job or assignment because it did not correspond with their values, while a new Qualtrics survey showed that more than half of workers would not consider working for an employer who didn’t share their values. On the other hand, workers who find their work to be meaningful and who are satisfied with their employers’ societal and environmental impact are likely to stay with their employer for more than five years, and report being more engaged and feeling more motivated at work.
Research consistently shows that climate change remains at the top of workers’ concerns, as many pressure their employers to adopt more sustainable workplace practices and to demonstrate a commitment to serving the environment, including organizing efforts that employees can directly get involved in. Other CSR initiatives that employees cite as important to them include investment in local communities—particularly underserved and underrepresented communities—through donations and volunteer efforts. Some key practices to implement in response to these insights include reducing carbon footprints, switching to recyclable products at work, donating a portion of revenue to charitable causes, and offering employees volunteer time off (VTO).
- Champion diversity, equity, and inclusion (DEI) at work. As employers work toward expanding their benefits offerings to better fit the needs of today’s diverse workforce, a strong majority of workers are now putting the pressure on their employers to drive up their DEI efforts in the workplace. According to a recent report from Built In, three out of four employees and job seekers now prioritize diversity when it comes to choosing where to work, while new findings from GoodHire reveal that eight in 10 of all employees—including nearly 90 percent of employees in leadership positions—say they would consider leaving their job if their employer lacked a strong commitment to DEI.
Among the various ways that employers can promote DEI at work, equity compensation continues to be the most popular strategy among employees. More than half of all respondents and nearly two-thirds of respondents in leadership positions from GoodHire’s survey even went a step further, admitting that they would consider taking a pay cut in order to ensure a more diverse and inclusive workspace.
When it comes to improving access to benefits, many employers are also now starting to address racial benefit gaps and health disparities, with more than half now either implementing or considering implementing specialized mental and behavioral health care support for BIPOC employees, as more than a third begin to implement benefits communications in other languages in addition to referrals, consultations, and search functionalities to help identify appropriate health providers, Mercer’s survey report shows.
- Address accessibility of benefits; expand virtual care options. As employers work toward improving their benefits offerings to reach more employees, another way to increase usage of benefits that employers should pay attention to heading into 2023 is expanding their virtual care options. New data shows that, on average, remote workers struggle with understanding and accessing their benefits significantly more so than their on-site counterparts, with more than half spending more than an hour per week worrying about benefits compared to only a third of on-site or hybrid employees. To address this, Mercer’s survey data finds that a majority of employers will now offer virtual care solutions beyond telemedicine in 2023, including virtual behavioral health and primary care.
While 2023 is shaping up to be a challenging year, by staying up-to-date on these trends and working toward incorporating them into their own workplaces, employers can put themselves in a much better position for dealing with the fallout of the ongoing talent shortage, the continuing reshuffle, and looming economic disasters as they head into next year.