The emergence of employer-sponsored benefits can be traced back to the Industrial Revolution, when they were primarily offered in order to attract more candidates to meet the increasing demand of that epoch’s job economy, as more and more positions remained open and unfilled.
However, these benefits have become mainstream and widely expected by employees over time, and the purpose and emergence of benefits in their current state is now to engage and retain existing employees. This focus on employee engagement helps to prevent employee burnout, reduce employee turnover, and improve a company’s bottom line.
The beginning of employee benefits
The first employee benefits plans offered pension and retirement packages to employees who had worked at the company for a certain amount of time and met several criteria. The purpose of these plans was to ensure that the employee had a successful future when he or she reached an age when performing the duties of the job became difficult or impossible.
While retirement benefits are really only beneficial for the future, employer-sponsored benefits now focus on perks that are helpful in the present. Benefits such as vacation days, paid time off, free lunch, and health insurance packages are helpful to employees on a daily basis, as opposed to when they reach an abstract age 40 or 50 years in the future.
Following the same line of thought, benefits trends in the future will have a focus on improving the experience of the “now.” Below are four predicted trends that will be a focus for the future of employee benefits.
1.Vacation stipends and rewards for taking vacation days
In 2016, CNN reported that 3% of companies offer their employees a stipend to pay for vacations. The thought process behind this is that if employees are enabled to take vacations without the worry or financial stress of having to spend money while on vacation, the employee will come back to work after truly having enjoyed his or her vacation. Some employers are already taking this benefit one step further. CNN writes that FullContact will only provide a stipend if the employee truly disconnects from work.
In the future… Only 3% of companies were offering this benefit at the time when CNN wrote the article, but it is likely that more and more employers will adopt this approach as results from this cutting-edge financial benefit start to come in. Additionally, this idea of a “stipend benefit” could be offered across other verticals, such as a stipend for outside education (a step beyond education reimbursement) or a stipend for weekend activities such as concerts, art shows, or amusement parks.
2.Technologically advanced benefits
It is common knowledge that artificial intelligence is all the rage when it comes to traditionally orthodox industries like recruiting. For example, TechCrunch reported in May 2017 that the AI recruiting tool Mya raised $11.4M in Series A funding in order to expand its services into the industries of retail, warehousing and call centers. Interestingly enough, these industries into which Mya hopes to expand suffer from high rates of employee turnover. While these stats show that AI is popularly used to create new industries, its usefulness and companies’ fascination with AI tools will certainly ensure it makes its way to the benefits that companies offer their employees.
In the future… tools like chatbots and other AI systems could be offered as benefits to provide services to employees. Similar to current EAP, or Employee Assistance Programs, that provide phone support and concierge services for some of life’s troubling experiences, AI chatbots might make mundane tasks worries of the past for employees who use them. Think of a chatbot that would respond to and facilitate an employee’s request: “book a car for tomorrow,” or “order toilet paper to be delivered next week.” Similar technology that already exists could be offered by employers to improve the lives of employees.
3.Faster payroll processing
In line with technologically advanced benefits, more efficient and employee-friendly payroll methods might become top priorities for employers who wish to engage their employees. In the (far) past, employees who worked at tasks such as oil digging, railroad building, or other clichéd “American” jobs in the 1800s and early 1900s were paid daily for their work, usually in cents. It wasn’t until the 1950s that the first electronic computer system LEO (Lyons Electronic Office) was developed for commercial business applications.
In the future… while current payroll professionals debate the use of weekly versus biweekly payroll schedules, the daily payments of the past will make a return. Payroll outsourcing is becoming increasingly popular, and those payroll processors should adopt advanced technology in terms of daily payments in order to put their services ahead of the competition.
4.Radical student loan assistance
As the current $1.4 trillion student loan crisis is a hot topic for many policy makers, current HR and benefits departments are already implementing student loan refinancing and educational assistance reimbursement for employees. However, both these benefits essentially affect the future. With refinancing of loans, that loan still must be repaid until it is paid off sometime in the future. With reimbursement, the employee must pay either out of pocket or with loans for his or her education before receiving reimbursement in the future, which is almost always contingent on many things such as grade-point average and employment status at the time of course completion.
In the future… radical options for educational assistance that affect an employee’s “now” should become the norm. These could manifest themselves in several ways, such as up-front financing for education courses or complete forgiveness of a student loan (i.e., a company pays off its employee’s student loan in full) regardless of where it came from.
As clichéd as it is to say this, only time will tell if the future of employee benefits will follow suit in these ways. However, it is no mystery that benefits will change, nor why they will change. Employers want to offer their employees benefits both to attract more applicants and to engage the employees they already have in efforts to improve their employee retention rate and save time and money. By adapting to employees’ changing needs, companies can engage and retain their employees by offering unique and diverse benefits.
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Seth Loftis works at DailyPay, Inc., a financial solutions company dedicated to reducing employee turnover by improving the financial lives of employees. Employees can receive their wages days before their scheduled payday at no cost to their company or change to their existing payroll system.