As in the past, with every new year employers look to strengthen their benefit offerings in order to attract and retain talent. And things won’t be any different in 2023, it seems.
In fact, the war for talent will continue to drive benefit enhancements, with a recent survey from Mercer finding that 70% of all large employers are planning improved benefit offerings for 2023.
According to several experts, HR decision-makers will need to lean on competitive benefits packages that focus on prioritizing critical employee benefits in three key areas—financial wellness, family support and compensation strategies, among others—in order to help keep employees in the fold in an uncertain and quickly changing talent market.
A diversified financial wellness picture
Helping employees with their finances should be a major focus for HR and benefits leaders in 2023, says Barrett Scruggs, vice president of employee financial wellbeing at SoFi at Work. And, the support needs to be tailored to an organization’s individual workforce.
“Different employees prioritize different aspects of their financial wellbeing based upon their personal situations and financial needs,” Scruggs says.
According to a SoFi at Work survey, 38% of workers share the top financial goal of saving for retirement, while 27% aim to build an emergency savings fund.
In the coming year, he expects to see employers keep up with their individual employees’ financial goals, with new and personalized benefit offerings, particularly important given widespread concerns about inflation.
Sofi at Work found that the top five financial benefits employees want their company to add, improve or expand are emergency savings funds (64%), retirement matching/401(k) (64%), financial planning tools (62%), budget planning tools (61%) and homeownership assistance (60%).
Scruggs says enhancing these benefits—and implementing others, such as financial education, student loan contribution programs and college saving support through access to education and 529 savings plans—will allow companies to build a supportive culture that enhances job satisfaction.
“Financial wellbeing looks different for everyone, and there is not one benefit that will meet the needs of every employee,” he says. “Instead, companies should offer holistic financial benefits best suited to their unique workforce and assist employees at different life stages.”
As economic concerns continue to deepen among Americans, employers have a “real opportunity” in the new year, Scruggs says, “to alleviate stress and empower employees through tailored financial benefits and assistance.”
Support for families
As part of an emerging trend, more employers began implementing supportive family-friendly benefits like expanded paid family leave, childcare assistance, family-building help and eldercare support, according to Sheri Atwood, CEO and Founder of SupportPay, a co-parenting solution that manages alimony, child support payments and expenses. Along those lines, SupportPay recently began offering a first-of-its-kind employee benefits solution for working parents struggling before, during and after divorce.
According to Atwood, the pandemic has highlighted the struggles employees are facing outside of the office, such as with parenting, caregiving and more.
“While companies are heading in the right direction, there are a number of groups still left behind—like employees who are single parents or those navigating divorce or separation,” she says, adding that in 2023, she expects to see employers continue implementing broader family benefits that address each life stage, and add more features to their benefit programs that meet employees where they are.
Compensation in context
According to the latest Salary Budget Planning Report by global advisory firm WTW, overall salary increases in the U.S. are forecast to rise to 4.6% in 2023, up from an actual spend of 4.2% in 2022. This is as the majority of companies react to inflationary pressures and concerns over the tighter labor market, says Hatti Johansson, research director of reward data intelligence at WTW.
Johansson notes that as economic challenges loom large in the U.S., a fifth of organizations (21%) that are changing salary increase budgets have said they will offer compensation plans and benefit programs that their employees value most.
Importantly, three in four employers surveyed (75%) are experiencing problems with attracting and retaining talent, a figure that has nearly tripled since 2020. In fact, the tight labor market has been an influencing factor in the decision of nearly seven in 10 companies (68%) to increase salary budgets.
“As inflation continues to rise and the threat of an economic downturn looms, companies are using a range of measures to support their staff during this time,” Johansson says. “Organizations should prioritize their actions based on the needs of both employers and employees and pay close attention to market data to inform any changes.”