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HOW WILL THE PANDEMIC INFLUENCE BENEFITS OFFERINGS?

HOW WILL THE PANDEMIC INFLUENCE BENEFITS OFFERINGS?

September 25
07:05 2020

Benefits Products & Services

By Thomas A. McCoy, CLU

HOW WILL THE PANDEMIC INFLUENCE BENEFITS OFFERINGS?

Gallagher study provides an early assessment

How will the pandemic influence benefits offerings?

The last few months have been a giant lab experiment in workplace adaptability. Employers had to get used to employees working from home; decide when to bring people back to the workplace; work on making the workplace safe, and then monitor that state of safety every day—all the while trying to address their problem of lost revenue.

“Employers had no playbook for what they were facing,” says Kathleen Schulz, divisional vice president, global innovation leader, organizational well-being, of Gallagher Benefit Services. “They just had to pivot and get it done. Employers have become more agile, and that’s a good thing.”

Workers have faced their own set of challenges. They’ve had to acclimate to a workplace that is dramatically altered by the health crisis; many began working at home for the first time; childcare challenges have been an obstacle to work for many, and everyone worries about the health of their loved ones. All the while, employees have worried about possible job loss or compensation cuts.

“It’s important for organizations to understand what’s going on for individuals at work—physically, emotionally and financially,” Schulz says. “It’s critical to developing a holistic strategy for achieving and sustaining organizational well-being.”

In June and July, Gallagher Benefit Services, the benefits and HR consulting division of international broker Arthur J. Gallagher & Co., conducted a nationwide survey of employers ranging in size from under 100 employees to more than 1,000 from a wide variety of industries. It wanted to gauge the effects of some of the momentous changes taking place and ascertain how the pandemic might shape future employee benefits decisions.

The survey found that 83% of employers have been rethinking their compensation and benefits strategy in light of the pandemic. When asked which specific elements of a total rewards program they consider to be most important as a result of the pandemic, almost two thirds (65%) chose “emotional well-being.”

“By far, emotional well-being was the top benefit of emerging importance during the pandemic,” says Schulz. In second place—named by 47% of employers—was “leave policies.

“Prior to COVID-19, we were already in a place where stress, anxiety, depression and substance abuse were at almost epidemic proportions,” Schulz states. “And that was with a stable economy, soaring stock market and historically low unemployment. Enter COVID-19 with all of its new pressures, and the degree of stress that employees are facing is compounded.

“Not all of us will be physically affected by the virus, but every single one of us is being emotionally affected. Before the pandemic, emotional well-being may not even have been on an employer’s radar, so they had no strategy for addressing it. Now there’s an opportunity for emotional well-being to be a cornerstone of a larger well-being strategy.”

One result of the increasing focus on emotional well-being is that employers are taking a fresh look at EAPs (Employee Assistance Programs), Schulz says. “Normalizing the conversation about mental health and emotional well-being is a good thing. It helps get rid of some of the stigma that seems to have followed EAP programs forever.

“By far, ‘emotional well-being’ was the top benefit of emerging importance during the pandemic.”
—Kathleen Schulz
Divisional Vice President and Global Innovation Leader of Organizational Well-being
Gallagher Benefit Services

“A lot of organizations are asking, ‘Is our EAP the best for what our employees need?’ Today’s EAPs include a lot of new wrap-around services. Technology solutions such as virtual coaching can help employees with stress, anxiety, depression and overall emotional well-being. There’s been a tremendous amount of growth in the EAP industry that I expect to continue.”

Another hopeful finding to come out of Gallagher’s study is that 49% of the participating employers reported an increase in civility or kindness in the workforce. The industries where this trend was the strongest (approximately 60%) were financial services, healthcare and technology.

“We really need to focus on holding onto that,” says Schulz. “We know that those positive emotions—empathy, compassion and gratitude—are good for our health and good for everybody around us. The positive influence of those emotions is valuable for building the culture and building interconnectedness among employees.”

With more employees working from home, it’s clear that they value that interconnectedness, Schulz points out. She expects more organizations to offer the option of working from home on a permanent basis, likely with the use of a hybrid arrangement where they work at home a few days, then come into the office to work and connect with colleagues.

“They are still craving that collaborative spirit of being together in the same place,” Schulz observes. “Several months into the pandemic, there’s a bit of work-from-home fatigue going on. Even at the workplace, though, building a sense of community can be a challenge.

“So many protocols have had to be put in place to ensure safety that employees aren’t getting that social interaction. You can find yourself still on a conference call with a person who’s sitting nine feet away from you.”

Schulz notes that managers throughout an organization set the tone in demonstrating positive emotions. “Our human resources and compensation consulting team is getting an increasing number of requests to train managers in developing positive emotional skills that help build a collaborative culture.”

Almost half of the employers who participated in Gallagher’s survey (47%) say they consider employee leave policies to be more important in light of the pandemic; 26% have already modified their paid leave policies and another 16% are considering doing so. Examples of revised provisions include allowing employees to roll over or cash out unused paid time off (PTO) days and mandating the use of allotted days by a certain date.

“Some of the focus on absence management is driven by the need to comply with government mandates, but a lot of it is the result of companies wanting to provide more flexibility,” says Schulz. “We think it’s important to encourage employees to take time off. It’s critical to their overall well-being.”

Gallagher’s survey participants showed strong interest in three other employee benefits areas related to physical and financial health as a result of the pandemic: medical benefits (39%); physical well-being (36%), and financial well-being (31%).

Just over a quarter of employers surveyed (26%) consider their compensation policy to be more important in light of the pandemic. Close to half (45%)had already reduced working hours of employees (as of the June/July survey date). Other cutbacks that had been implemented as of that date included furloughs (by 29% of employers) and layoffs (also by 29%). Data on these reductions and compensation changes vary significantly by industry.

We live in an era of data, and the effect of the pandemic on business may become the most scrutinized economic event of this generation. Gallagher’s study is one example. Its results confirm the already existing trend—now vastly accelerated—of the close connection between an employee’s personal life and work life. The importance of employee well-being has never been greater.

The author

Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.

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