HR teams have no shortage of information about employees’ priorities as we enter 2023. Over the past few years, employees have been sharing what they want from their employers: more flexibility, a healthier work/life balance, and a wider range of professional development opportunities. At a time when employees are quitting their jobs at a much higher rate than they have in the past, it would be wise for HR teams to listen to these demands. By doing so, they have a chance to distinguish their companies from competitors, attract new people, and improve retention.
The demand for flexibility underlies many of the more specific asks employees have of their employers in 2023. For example, members of increasingly diverse workforces need flexible benefits that meet their unique needs. While some employees are content with traditional benefits such as 401(k) matches, others want assistance with student loans, life planning accounts, and other resources that will help them weather the ongoing economic downturn. Hence, HR teams have to abandon the one-size-fits-all benefits packages many companies continue to provide.
Employees expect more from their companies than ever before. But this doesn’t mean there should be an adversarial relationship between HR teams and employees. Instead, it means the next year will present unprecedented opportunities to forge stronger long-term relationships with the people who drive your company’s success.
Employees Will Need More Robust Support
The contract between employees and their companies has been continually renegotiated over the last several years, from the demand for remote work to the request for more financial support to prioritizing the mental well-being of their workforces. While HR teams are working to address these issues, many company leaders are discovering a lack of alignment with their employees. Take remote work, for instance. While 44% of employees want to do it full time, just 16% of employers plan to offer this benefit.
In other areas, companies are starting to provide employees with the benefits they want: 91% offered mental health coverage in 2022, which is up from 85% in 2021. With inflation still hot (despite finally cooling a bit in recent months) and a significant global economic contraction underway, it’s no surprise that over three-quarters of employees are asking for financial wellness benefits. The top three benefits they’re requesting are retirement planning, investment programs, and emergency savings.
As the economic situation continues to deteriorate, employees expect more assistance from HR teams and company leaders. When they receive this assistance, they will be not only more inclined to stay with the company but also more engaged and productive.
Flexibility Will Be a Key Priority for Your Workforce
Employees don’t want their jobs and benefits to be static. After 3 years of dramatic shifts in how and where employees work, sweeping job displacement and turnover, and relentless economic volatility, employees consider flexibility one of the most vital assets any company can provide them. This is why it’s no surprise that 81% of executives are changing their policies to provide employees with greater flexibility.
But what does this look like in practice? First, there’s the demand for remote work, which a recent McKinsey survey found only ranks behind “greater pay or hours” and “better career opportunities” as a top motivation for seeking a new job. According to the same survey, 87% of employees who are offered an opportunity to work remotely take it. However, the conversation about flexibility is too often reduced to remote work. Companies can also exhibit flexibility in the professional development opportunities they offer; avenues for talent mobility; and, perhaps most importantly, their benefits.
As multigenerational workforces become increasingly diverse, companies have to focus on providing individualized benefits that meet employees’ unique needs. This means having an open and ongoing discussion with employees about their concerns and financial goals, as well as implementing flexible benefits like convertible paid time off (PTO) (which allows employees to redirect their earned vacation time toward other priorities). When companies treat employees like individuals and adapt to their needs instead of the other way around, they’ll foster loyalty, productivity, and a healthy culture.
Companies will Fundamentally Rethink the Benefits They Provide
In 2023, employees will no longer be satisfied with fixed benefits packages. Beyond the demand for financial wellness assistance, mental health coverage, and remote work options, employees expect their benefits to encompass an expanding range of needs and concerns. This is why they’re increasingly requesting benefits such as on-demand pay, convertible (and even portable) PTO, and access to life planning accounts (which are predicted to become more popular this year).
The passage of the SECURE 2.0 Act of 2022 allows employees to allocate money to an emergency savings account and still receive matching contributions. Once they leave a job, these accounts will automatically be converted to Roth accounts or distributed, which allows employees to save and keep cash available at the same time.
Meanwhile, employees will likely move away from wanting unlimited PTO policies and toward accrued time off they can either repurpose (to pay for student loans, make retirement contributions, or allocate to life planning accounts) or cash out once they leave a company. This will be all the more important as quit rates remain high and employees need accrued payouts to bridge them to their next job. Employees are starting to view benefits as a form of currency they can bring from job to job, especially with earned benefits like PTO that accrue over time.
There are plenty of innovative ways for HR teams to help their workforces navigate difficult economic waters in 2023 and meet rapidly emerging employee demands. By providing more robust financial support, offering flexibility, and rethinking benefits, HR teams will play a critical role in talent acquisition and retention in 2023.
Rob Whalen is Co-Founder and CEO of PTO Exchange.