In light of a volatile economy, companies continue looking for ways to cut costs. One area they should consider revisiting is benefits. We don’t mean eliminating benefits but rather re-evaluating your benefits to ensure your employees find them valuable.
Companies waste billions of dollars on benefits that employees find little value in. The reasons can vary from employees not knowing that the benefits exist to not offering the right benefits that meet the needs of the diverse, multigenerational workforce.
Today’s employees want a hyper-personalized experience with their benefits, so they know they are getting value from their contributions. They want to feel heard, seen, and supported by their employers. And the best way employers can do this is by offering personalized benefits.
The future of employee benefits
According to MetLife’s 2023 Employee Benefits Trend Study, only 61 percent of employees say their companies offer benefits that meet their personal and household needs. Generic benefits packages are underused because they don’t reflect what employees value. Companies aren’t only receiving a lower ROI on their human capital expenditures, but employees feel like their voices aren’t being heard. Additionally, this demonstrates a lack of individual engagement with employees.
Personalized benefits are a way for employers to allow employees to create custom benefits packages that meet their unique needs. For example, one employee might need their benefits to align more with their financial needs, while another might need their benefits to align more with their wellness needs. Employees get the benefits they want from their employers, leading to higher satisfaction and utilization.
The rise of personal benefits is part of a broader shift toward flexibility in the workplace. As employees prioritize a healthier work-life balance and remote work, so are HR teams. Personalized benefits help promote employees’ overall well-being and holistic health—physical, mental, social, and financial—by allowing them to choose the areas they want to prioritize. This puts employees in charge of maintaining a healthy balance between their personal and professional lives. Moreover, personalized benefits are the best way for companies to show employees that the company supports them as individuals rather than numbers on a balance sheet.
Why you should offer personalized benefits
For one, there is a serious demand for them. The same MetLife study found that 70% of employees want customizable benefits. Additionally, our 2021 research study found that 83% of employees would be interested in a benefit like convertible PTO. So, the demand is clearly there from employees.
For companies, personalized benefits increase employee engagement and productivity while reducing turnover. This gives employers an advantage in finding and retaining talent in a tight labor market. When employees have the benefits they find value in, it increases employee morale and satisfaction, ultimately leading to higher productivity.
Flexible benefits show a commitment to each employee’s well-being. Instead of making assumptions about which benefits will do the best, companies should give employees a broad range of options and have ongoing discussions with them about which ones to offer. When companies strive to address employees’ unique needs and concerns, they demonstrate they care about the well-being of their workforce, creating a healthier workplace culture. Instead of creating a high-pressure culture, flexibility through personalized benefits prevents burnout and disengagement by helping employees find a healthy work-life balance.
How you can offer personalized benefits to your employees
There are several ways you can offer personalized benefits to your employees:
- Convertible paid time off (PTO): Almost three-quarters of employees don’t use all their allotted vacation time. Convertible PTO allows employees to redirect the value of unused vacation time toward other financial priorities. These priorities include charitable donations, emergency cash, health savings accounts (HSAs), and retirement contributions.
- Survey your employees. There is usually a 20-30% gap between the benefits employers think employees want and what they actually want. If you want to know if your benefits align with what your employees want, ask them. You can get better information about your employees than from them.
- Look at the data. You likely have data from your benefits providers to see what benefits your employees utilize and which they aren’t. Using this data, you can adjust your benefits offerings, shifting your resources and budget to benefits your employees are more likely to use. For example, if you notice that employees aren’t electing to sign up for life insurance but are signing up for pet insurance, you can adjust your benefits package accordingly.
Employees want more flexibility, especially when it comes to their benefits. Personalized benefits are a win-win for both employees and employers—employees get their individualized needs met, and employers offer benefits that actually get used. Learn more about how PTO Exchange offers personalized benefits through convertible PTO.