The last few years have been tumultuous in the employment and benefits space to say the least – with a global pandemic, the Great Resignation, and quiet quitting. Despite these significant changes that have disrupted the workforce, employers are starting to see some regularity and stability with unemployment rates returning to 4% in May 2024, which is on par with pre-pandemic levels.

This return to some variation of normalcy gives employers an opportunity to refocus their benefits efforts and make sure they’re aligned with what employees are looking for. Here’s what’s trending in benefits and the employment space in 2024.

1. Employees are feeling financially squeezed

With the costs of nearly everything exponentially increasing over the last few years, employees are feeling squeezed, especially considering that 60% of workers say their incomes haven’t kept up with inflation. Prices aren’t increasing at the rates that they were in 2022 and 2023, however, they are still high compared to the last 20 years.

Health care is no exception when it comes to rising costs and the impact on employees. The International Foundation of Employee Benefit Plans (IFEBP) found that employers have projected a 7% hike for health care costs in 2024. With the rise in costs employers face, 16% indicate they will need to implement cost sharing initiatives to manage the costs, further putting employees in a spot that they’ll be paying more for health care.

This, partnered with all the other rising costs has led to employee financial well-being hitting an all-time low in 2023. How can this be addressed? It’s becoming increasingly important for employers to provide affordable access to health care.

One great way employers can help promote financial well-being with their employees is by offering a health savings account (HSA), making contributions, and educating employees on the tax advantages and the full value of the account. With an HSA, accountholders have unmatched flexibility when it comes to how they want to use their funds – they can choose to spend when they need to, save for future expenses, or invest for the future. Employees may need enhanced education to ensure they know what features their HSA has, and how to take advantage of them, and may need to consult a financial advisor to help them choose the best options for their situation.

2. Finances are affecting employees’ mental health and productivity

The interwoven challenges of financial concerns and mental health have been a significant trend in the last year. A startling 50% of US workers report experiencing high levels of anxiety because of what health care will cost beyond what their insurance covers. The reality is, employees are finding themselves navigating financial uncertainties that not only impact their personal lives but can spill into their work day, hindering their ability to perform their best while on the job. Nearly 76% of stressed out workers acknowledge that financial worries disrupt their productivity. Employers must recognize the connections between financial concerns and mental health by helping to implement measures to support their employees mental and financial well-being.

Even if employers are already making an effort to support these key areas of employee wellness, they must find strong ways to communicate their benefits to their employees. Half of all employees report they would feel more cared for if their employer improved benefits communications. This means, employers should reevaluate their communication channels and messaging to make sure employees can not only access important information but understand it. For example, if an employer has a mainly remote workforce, posters or other physical print materials in their office space wouldn’t be seen by many employees. Using emails, intranet postings, or virtual benefit meetings with the HR team would be more effective methods to reach these employees.

3. Employees and HR teams aren’t always on the same page about benefits

It’s well known how important of a role benefits play in supporting employee well-being, attracting new employees, and retaining employees. However, benefits are only as valuable as employees see them. A recent Mercer study found that the HR leaders aren’t fully prioritizing benefits in the way employees want them to be prioritized, with seven out of the top ten benefits being ranked in a different order of importance.

To help combat this, employers should prioritize listening to employees to understand what benefits they value most. By creating an open dialogue, employers have the opportunity to make their benefits budget go further because employees will find more value. It’s also important to keep in mind that employees are individuals. This means, finding ways to offer options and cater benefits to individuals based on what works best for them will increase employee satisfaction.

Upcoming Webinar: Employee Benefit Trends: What’s Next After a Pandemic, the Great Resignation, Quiet Quitting, and a Recession

Interested in learning more on what’s trending in 2024? Attend our 2024 employee benefit trends webinar on Thursday, June 20 at 11 AM Central, where we review the overall trends we've seen these past few years, what the employment environment looks like today, and what to expect for the employment and benefits industry in the future.