Introduction
The 2022 Employee Benefits Market Outlook explores themes critical to the employee benefits sector. The goal in drafting the Market Outlook is to gauge where the industry may be headed in 2022; however, the best way to predict the future is by first understanding the past. In that spirit, the Market Outlook also reflects on trends from last year that laid the groundwork for 2022 and beyond.
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Summary
To say the last couple of years have been unprecedented would be an understatement. Due to the COVID-19 pandemic, virtually every aspect of the workplace has changed. Many employers have been forced to grapple not only with a scarcity of workers and reduced revenue but also with strained employee health and well-being to an extent never before seen.
In fact, a renewed focus on employees will likely be the cornerstone for a successful 2022. That’s because an increasing number of employees have become disillusioned with the status quo—workers are now demanding more from their employers. Should their current employers fail to provide sufficient value in terms of salary, benefits and upward mobility, workers are more willing and able than ever to find employers who will.
The reality of the current labor market is that employees have higher expectations and greater leverage than ever. They want better job fulfillment, access to meaningful benefits and increased scheduling flexibility. Of course, many employers are more than willing to provide employees with perks that will improve their job satisfaction. The problem is that while employee expectations have risen, benefits budgets have not.
Moreover, even historically adequate benefits budgets may not be sufficient this year. Health care costs are set to rise considerably as a greater number of patients seek services that were deferred during the pandemic. This leaves employers in a position of needing to rein in spending while still providing competitive benefits offerings to attract and retain top talent.
We believe solving this dilemma will be the key to success in 2022 and beyond. Employers need to think creatively about how they can accommodate employee needs and desires while also controlling costs and ensuring worker health and wellness.
As part of this effort, employers are expected to reconsider how and where they invest their benefits dollars. For instance, employers may consider utilizing alternative health plans, expanding telemedicine offerings or providing more targeted voluntary benefits. Ultimately, what works for one employer might not work for another. Employers will need to evaluate their unique circumstances before settling on a given approach.
As you read on, ask yourself, “Is my workforce susceptible to any or all of these trends?” Then, reach out to discuss these trends for a conversation about the next steps. Together, we can rise to the challenges and opportunities presented in the new year.