DEVELOPING A STRATEGY FOR
The pandemic heightened awareness
of the value of time
By Thomas A. McCoy, CLU
A benefits program has traditionally been all about health and money—basically covering an employee’s medical expenses and helping them save for retirement. While fulfilling these needs continues to be the foundation of a benefits plan, employers are devoting increased attention to something more intangible that employees value almost as much: their time.
“Most of our clients are doing a refresh of their time-off policy,” said Tracy Watts, senior partner and national leader of U.S. Health Policy at Mercer, at a recent Mercer webinar.
Polly Nicholas, senior vice president and head of Solutions for Unum Group, pointed out at a recent Unum webinar that a study published in June by the Society of Human Resource Management “showed that leave is the second most important benefit to employees today (tied with retirement benefits), just below medical. That’s quite a shift from where we used to be.”
Employee awareness of the value of time away from work rose significantly during the pandemic, as the distinction between work time and personal time blurred. Childcare and other caregiving presented scheduling challenges. Off-site work options eliminated commute time for many.
Those who couldn’t work from home because their work was deemed “essential,” often in lower paid positions, received recognition from society and their employer that their time is valuable.
“Flexibility is a great place to start for employers with budget limitations.”
Senior Partner and National Leader,
U.S. Health Policy
As the pandemic slowly dissipated, job flexibility—including flexible hours and hybrid work arrangements—has continued its appeal, especially for younger workers. The tight labor market gives added weight to their preferences.
According to The Hartford’s 2022 Future of Benefits report, two-thirds of Gen Z and younger Millennial employees have applied for a new job, or plan to, and one-third of those said they were more likely to change jobs for greater workplace flexibility.
“Flexibility is a great place to start for employers with budget limitations,” Watts noted. Mercer surveyed 450 larger organizations (500 or more employees) and found that 78% of them planned to offer the option of working from home regularly, but not every day, in 2023.
Two-thirds of the employers in Mercer’s survey reported that they would offer flexible work schedules, such as flextime during the day or a four-day work week; 50% planned to offer other benefits or policies to support work-life balance; 45% will offer paid time off to volunteer; and 15% said they would offer unlimited paid time off.
Other generous time-off benefits planned by employers, as reported in the Mercer study, are lifestyle accounts—employer-funded accounts that employees can use for a variety of purposes (to be offered by 12%), and sabbaticals after a specific number of years in service (also by 12%) of employers.
No surprise, older workers have a different perspective on time from that of younger workers. Mercer’s 2022 Global Talent Trends study identifies some non-traditional ways that employers are adjusting time commitments for workers nearing traditional retirement age.
Three-quarters of employers said they are looking at phased retirement options, and 35% are already offering phased retirement. Other employer strategies include offering options for part-time or flexible working after retirement (36%), building their own retiree freelancer talent pool (31%), and actively recruiting older talent (26%).
The WTW (Willis Towers Watson) 2022 Mid-year Compensation Survey confirms the significance of workplace flexibility in attracting and retaining talent—with 84% of employers reporting that they are increasing the flexibility in where employees work (for example, home versus office) and how they work.
“Employers are leaving no stones unturned in their battle to find and keep talent,” said Lesli Jennings, North America leader of Work, Rewards and Careers for WTW. “While making enhancements to compensation programs can support employers’ immediate recruitment and retention efforts, employers recognize they will need to pull levers in addition to compensation and reinforce a connection to the overall employee experience.”
Traditionally, paid time away from work has been based on a set schedule according to job tenure. Alera Group, a national organization of employee benefits-focused insurance brokers, compiled data this year on the most common time-off policies used by the employers who are clients of its member brokers.
They show that new hires received zero to 10 days of PTO bank, zero to 10 vacation days, and zero to five personal days. Those with one to five years commonly received 11 to 15 PTO bank, six to 10 vacation days, and one to five personal days.
For those with six to nine years of service, the PTO bank ranges from 11 to 20 days, 11 to 15 vacation days, and one to five personal days. Those with 10 or more years of service commonly received more than 20 days of PTO, 16 to 20 days of vacation, and one to five personal days.
In addition, the Alera data show that employees generally were offered one to five sick days per year, regard-less of their tenure with their employer.
Alera notes that actual time off granted by employers correlates with their size—larger organizations offering more generous time-off schedules than smaller firms. Those with more than 1,000 employees and those in the information technology sector are more likely to offer unlimited PTO.
We can’t talk about employers’ leave policies without bringing up mental health. The past three years have brought an acute awareness of how difficult work-life balance can be. When employees’ work demands crowd out their need for personal renewal time, the results can be harmful to both the employee and employer.
According to Mercer’s Global Talent survey, 81% of employees feel at risk of burnout, up from 63% before the pandemic. Nearly 60% of company executives rank “high employee sickness/absence rates and remote worker fatigue” in their top five workforce concerns for 2022.
Swapnil Prabha, vice president, Workplace Wellness Solutions at Unum, noted at a recent Unum webinar that her company experienced a 50% increase in disability claims related to anxiety between 2019 and 2021. Unum data also shows that 75% of employees trust their employers to help them manage their stress with quality benefits.
Employees’ expectation that their company will support their mental wellbeing “is only going to increase due to changes in workplace demographics, with more Gen Z’ers entering the workplace,” Prabha said.
Many employers will face conflicting business priorities as they plan next year’s benefits program, Watts predicted. “It’s almost like they have to plan for growth in the morning and then plan for a recession in the afternoon.”
She noted, however, that 70% of employers surveyed by Mercer said that they plan to enhance their benefits program for 2023, and 5% say those enhancements will be significant. Another 16% of the employers surveyed said they enhanced their benefits in 2022. Among the enhancements on their agenda, according to the Global Talent Trends study: 34% plan to add a mental/emotional health benefit.
Watts pointed out that 61% of the 450 companies surveyed by Mercer used an employee survey to determine benefit preferences; 46% said they assessed benefit preferences based on analysis of employee demographics or personas, and 35% said they used input from Employee Resource Groups.
“The bottom line is that if you’re going to invest in benefit enhancement, you want to be sure you’re going to get the return that you’re looking for,” Watts said.
Employers continue to struggle to attract and retain workers. So, in planning for 2023, products and work practices that support work-life balance will be receiving careful attention.
Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.