The Evolution of Employee Benefits: Meeting the New Needs of the Modern Workforce.

Employee benefits are in the process of experiencing their next significant evolution, adapting to a modern workforce where there are increasing demands for working day flexibility and health-oriented provisions. In an insightful discussion with David Cartwright Forbes, Divisional Director, and Head of Specialist Markets at Gallagher, we explored the rapid changes in the workplace benefits and how they are driving a shift towards more flexible, secure, and employee-driven schemes.

Effective communication and feedback mechanisms are crucial for successful benefits implementation. As highlighted by David, there is a need for clear communication strategies to ensure employees fully understand and utilise the benefits available to them: "If they don't communicate what is available properly, people don't understand what’s available and they don't engage in them; [meaning] that return on spend isn't there."

Traditionally, employee benefits have centred around healthcare, pensions and life insurance. However, these are now being recalibrated to meet new expectations and the challenges of a global workforce. “Healthcare has been number one, [it] always has been,” David observed, “but actually there is a lot more demand now for international cover and private maternity or infertility benefits for example, things you won’t find on the domestic healthcare plan.”

• Healthcare

There is a noticeable shift towards including a wider array of health-related benefits that address an entire family’s needs, such as private routine appointments, private maternity, infertility benefits and things not commonly found on domestic healthcare plans. Demand for international cover is also seeing an increase due to its rich benefits.

• Mental Health Support

Beyond traditional healthcare, there is a significant drive towards incorporating robust mental health support within benefit packages. This includes access to counselling services, mental health days and programmes aimed at reducing workplace stress. The recognition of mental health as critical to overall health is prompting companies to invest in comprehensive programmes that are readily accessible to employees.

• Pension

Changing pension benefits are prompting regular reviews and adaptations by firms to stay compliant and competitive. With many firms taking a heightened interest in employee welfare, ideas around contributory and non-contributory pensions are being challenged, opened up for employee influence, and leading to interesting conversations at interview stage and beyond.

• Product Benefits

Tailored to attract and retain employees, these benefits, which can include electric vehicles and/ or gym memberships, help create a more appealing work culture, boosting employee wellbeing or the working environment. We hear a lot more about wellbeing at work than we ever have before as a society and employers are listening.

One of the central catalysts for these changes was the COVID-19 pandemic, which accelerated the move towards an employee-centric benefits and away from workplace benefits. This shift emphasised the necessity for flexible and secure benefit provisions, addressing the evolving requirements of today’s employees. The global health crisis highlighted the importance of adaptability in benefits, ensuring they remain relevant and supportive in unprecedented times.

The shift is also largely driven by employee feedback. David referred to this, mentioning the idea that “individuals will say I know someone at another firm that’s providing X, Y and Z,” with the feedback from the employee bringing about new updates to benefits to their current employer. One example is the increased demand for mental health services and preventive care: "There's a lot more organisations could be doing to encourage positive mental health... prevention is better than cure." This proactive approach is shaping how companies adapt their healthcare offerings to better support their workforce.

As we look towards the future, adapting employee benefits to meet changing needs and expectations is more critical than ever. Employee benefits are poised for further developments, driven by ongoing shifts in workforce demographics and global economic factors. As David summarises, "We're in a candidates' market... they're letting their feelings known as to what they want to expect."

Thank you to David for taking the time to speak to the One Ten Associates team.