Employee Benefits Trends 2024: What Small Businesses Need to Know

May 31, 2024
Employee Benefits Trends

Today, 47% of employees feel "somewhat satisfied" with their current benefits, and only 31% are "very satisfied."1 Although in-demand employee benefits can ebb and flow based on the year, that doesn't mean you shouldn't change your offerings. By considering adopting some of the emerging trends in employee benefits, you'll make an impression on your workforce that providing meaningful benefits to them is important to you. Since 69% of employees find that a competitive benefits plan is "very important" for employee retention2, providing one can help you attract and retain top talent from all generations. To stay on top of the latest trends, here's what small businesses need to know about 2024 employee benefits.

Generational Differences to Consider with Voluntary Benefits

One thing employers need to be cognizant of when planning their employee benefits is the generational differences in the workforce. For example, a Forbes Survey found that 83% of Gen Z and 84% of Millennials viewed flexible work options as important to job satisfaction, while only 73% and 76% of Gen X and Baby Boomers, respectively, felt the same.3 Meanwhile, all four generations had similar views on flexible parental leave and team recognition. Understanding the demographics and needs of the workforce will allow employers to make more impactful choices based on the trends in employee benefits.

8 Small Business Employee Benefits Trends 2024

With that being said, there are several trends to watch out for this year regarding benefits and compensation. Although some trends have remained the same, others show the increasing importance of personalized care and mental health support. To help you attract and retain talent in a competitive job market, here are the current trends in employee benefits in 2024.

1. Cost-effective Healthcare Options

As inflation continues to impact the healthcare industry, the costs are expected to increase by roughly 8.5% in 2024.4 With these rising costs and increasing demands within the workplace, employee health should be at the forefront of an employer's benefits strategy. Otherwise, employers can face increased claims due to missed appointments, a lack of preventative care and declining physical health. This, in turn, can impact employee productivity and increase sick days, costing small business owners thousands of dollars.

Many employees also agree that cost-effective healthcare or employer-sponsored coverage is an essential benefits offering. Traditional health benefits packages can still be implemented, but determining which options helps to minimize employee expenses is an important consideration. Cost-effective strategies such as cost-sharing arrangements, healthcare analytics and employee wellness investments can also be considered.

2. Financial Wellness Plans

In today's society, 57% of employees say that finances are the leading cause of stress in their lives.5 Stress can cause health issues but can also significantly impact productivity and job satisfaction. There are several ways you can help integrate financial wellness into your benefits package.

For instance, consider a monthly stipend to employees to help invest in fitness studios, classes or wellness programs. This not only helps to foster physical health but also supports their financial health. The stipend can empower employee well-being without the employee bearing the financial burden entirely themselves.

Financial wellness resources can also encompass various components such as retirement savings programs, debt management assistance and budgeting tools. These types of plans help provide employees with guidance and a stronger understanding of how to budget or become more financially literate.

3. Flexible Work Arrangements

80% of employees identify flexible work arrangements as a crucial factor in job evaluation and satisfaction, and 61% have left, or considered leaving, a position due to the lack of flexibility.6 Flexible working is becoming the new norm, and SMBs aiming to remain competitive in attracting and retaining talent should consider adopting this trend if your business needs can allow it.

Flexibility in work arrangements can take various forms, including remote work options, flexible hours, compressed workweeks or even job sharing. Providing employees with work options not only helps to promote work-life balance but also helps to increase productivity and job satisfaction.

However, not all SMBs can offer the same degree of flexibility, so it's important to assess your company and needs based on the industry and job requirements. You need to carefully plan and communicate guidelines clearly to align with business objectives and operational requirements. Setting guidelines and expectations, leveraging technology for collaboration and communication and establishing regular check-ins are also essential for successful implementation.

4. Family-Friendly Benefits

Family-friendly benefits have also emerged as a key consideration for small businesses striving to create a supportive and inclusive workplace culture. These can encompass a wide range of perks designed to help employees balance their personal and professional lives. Some options include parental leave policies, childcare assistance, flexible scheduling options and support for eldercare responsibilities.

With childcare costs ranging from $190 to $766 per week , offering subsidies or access to onsite facilities can be a significant benefit offering for employees looking to start or grow their family.

5. Benefits for Mental Health and Well-Being

Over 90% of Americans believe employer-sponsored mental health coverage is, or would be, an important part of workplace culture. Many SMBs recognize the importance of these benefits, as they can help promote psychological resilience, stress management and other mental health concerns. Some of these benefits may include access to counseling services, employee assistance programs (EAPs), mental health awareness resources or mindfulness or meditation sessions.

There are several options that can help support mental health in the workplace. Many of these resources can help provide employees with the information to seek help and guidance while also reducing the stigma surrounding mental health issues. These resources may include educating your workforce on topics that may be relevant, dietary support information, or consider implementing walking meetings or similar to help promote physical health habits that can help improve mental health. Additionally, remind your workforce of EAP or support through medical carrier.

6. Professional Development Benefits

Professional development benefits encompass various resources and opportunities to foster employees' professional growth and expertise. These benefits may include tuition reimbursement programs, access to online courses and certifications, mentorship programs or workshop attendance. By investing in employees' educational pursuits, SMBs not only can enhance their skills and knowledge but also demonstrate a commitment to supporting their long-term career development. This goes above and beyond traditional benefits and can enhance the overall employee experience while promoting long-term company loyalty.

7. Diversity, Equity and Inclusion (DEI) Programs

SMBs should consider implementing diversity, equity and inclusion programs, including unconscious bias training, diversity recruitment, employee resource groups and initiatives to promote belonging. DEI programs are becoming increasingly sought after, especially regarding Gen Z and Millennial hires. Other ways to support workplace diversity include holidays, benefits and different acknowledgments that support various religions, cultural backgrounds and sexual orientations. These efforts can help raise awareness of biases, attract diverse talent, provide support networks and nurture a culture of belonging. By investing in DEI, businesses create inclusive environments that drive innovation and success while demonstrating social responsibility.

8. More Personalized Benefits Plans

With the varying differences across generations within the workforce, it can be challenging for employers to create a one-size-fits-all workplace benefits package. Therefore, personalization and flexibility are key trends to consider for 2024. These can include things like choosing voluntary benefits, having various healthcare coverage options and aligning benefits to employee preferences (i.e., expanded leave or customizable retirement plans).

Voluntary benefits are a popular trend in employee benefits because they allow employers to utilize a personalized approach. Voluntary benefits could include dental insurance, student loan repayment, financial counseling or even pet insurance. However, it's also important for employers to plan accordingly so that they are not taking on additional benefit costs that may be adverse to the business costs. Working with an HR professional can help you find a balance to assess your current benefits and make sustainable changes that can help improve employee satisfaction.

Work with a professional employer organization (PEO) like TriNet so you can get tools to help optimize and assess employee needs to help you adopt new benefit solutions with less strain and stress. Also, TriNet provides SMBs with access to traditional healthcare and insurance benefits alongside a variety of non-traditional benefits that are cost effective. Learn more about how TriNet can help enhance your benefits program today.

This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.

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3. Ibid.
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