If 2022 was the year of the pay rise as businesses reckoned with inflation at 40-year highs, 2023 should be the year of employee benefits that embrace a more holistic approach to supporting employee wellbeing. This will help boost staff morale, retention and recruitment in what is fast becoming an age of uncertainty.
Such an approach will be necessary as the macroeconomic environment remains frosty. Inflation is expected to start to fall at some point next year, but will still likely feature heavily in our personal and work lives. Likewise, hybrid working is here to stay. Although some companies, have moved back to an all-in-the-office position, hybrid work’s flexibility remains attractive for both employees and employers.
A recent analysis of Google data of the world’s biggest economies found that trips to workplaces were still well below their levels before the COVID-19 pandemic began in early 2020.
Despite this flexibility, companies are still facing pressure to increase salaries, with a fifth of British businesses giving staff additional benefits, such as travel subsidies, shopping vouchers and free parking to help with the cost of living.
In addition, our own research at Unum, conducted in conjunction with Censuswide, found that 35 per cent of employed workers — an estimated 9.9 million people — have had no cost-of-living support from their employer in 2022 at all. Moreover, nearly one in five employees expect to look for new jobs with better benefits or higher salaries in 2023.
All this places a great deal of pressure on businesses to be proactive. It’s simple to reach for the salary lever, but bosses should be thinking about the problems holistically. Separate Unum research earlier in 2022 into the so-called boomerang employee phenomenon (where workers quit their employer only to return later) found work culture and employee benefits were the most important reason for employees’ return (36 per cent).
Although higher salary and promotions were also important factors in a worker’s decision to ‘boomerang’, it’s extremely promising to see employees really caring about where and how they work, rather than just cold hard cash. And, as we all know, pay can only rise so much before increases become unviable.
As such, employee benefits should be the top of most managers’ priorities as we enter into 2023 alongside the ongoing question of ‘how do I make my company a great place to work?’. For some that can feel like an abstract approach in a world where we are targeted on delivery and bottom line, but the two go hand in hand.
Some employers boast about their table tennis tables, slides and other quirky fixtures. But if in doubt, managers should think of the basics: how are you helping the financial and mental wellbeing of staff? Employers can offer mental health pathways, employee assistance services and easy, direct access to medical support to help allay workers’ concerns.
The level of such anxiety is bigger than you might think – 61 per cent of employees in our survey indicated they were worried about managing financially due to financial pressures. In other words, as we head into 2023, there’s no bigger issue for employees than the cost of living.
The Office for National Statistics’ (ONS) most recent labour market statistics reported the employment rate stayed high at 75.5 per cent. However, the number of economically inactive people continued to grow in the 3 months to September 2022, exceeding 2.5 million — a record high.
Not only this but the number of UK vacancies, although down from the previous 3-month period, still exceeds the number of unemployed people actively seeking work. Not only does long-term sickness have a terrible impact on each individual employee, a labour market where vacancies exceed people available to take them cannot afford to lose any more workers to ill health.
That’s why promoting financial, mental and physical wellbeing is so important. New financial worries may compound employees’ existing health concerns and anxieties. That makes it more important than ever for employers to provide health and wellbeing support as part of a holistic employee benefits package.
Ultimately, doing so benefits employers, employees and wider society, so companies need to step up where they can. Higher salaries (at least not alone) simply won’t counter the problems employees are likely to face next year. 2023 will therefore be the year of employee benefits because it must be.