A look at recent trends in employee benefits shows that as healthcare costs rise, employers are opting to provide more health and wellness benefits and less of other types of perks.
Employers are spending more money to keep their employees healthy, even if it means sacrificing other benefits: That’s a key finding in the Society for Human Resource Management’s 2014 Employee Benefits report [PDF], released earlier this week at SHRM’s annual meeting.
The survey of 510 HR professionals found that the need for employers to maintain key benefits in areas where costs are rising—mainly healthcare and wellness—meant fewer resources were available to invest in other, less in-demand benefits.
“This need to counterbalance may be the main reason the latest findings demonstrated an increase in the percentages of organizations offering several types of healthcare and wellness benefits, yet a decrease in many other categories of employee benefits,” Evren Esen, SHRM’s director of survey research, said in a statement.
Five-year trends uncovered in the survey show that as more healthcare costs have shifted from the employer to the employee, more organizations are offering health savings accounts (HSAs) and contributing to them. In 2014, 45 percent of employers offered HSAs, compared to 33 percent in 2010; 32 percent contributed to HSAs in 2014, up from 15 percent in 2010.
To keep employees productive and reduce healthcare costs, employers are also spending more on preventative health and wellness benefits such as health and lifestyle coaching, rewards for completing health and wellness programs, quit-smoking programs, and healthcare premium discounts for completing an annual health-risk assessment.
“It may take three to five years before they see a difference,” Esen said of preventative programs in an interview with the Washington Post. “But it shows a return.”
Perks that have seen a decline because of underuse included undergraduate tuition benefits (down from 61 percent in 2013 to 54 percent in 2014), subsidies for using a personal car for business (down from 43 percent to 26 percent), and long-term care insurance (down from 31 percent to 24 percent).
SHRM also asked employers about a number of new benefits and got some interesting results: 91 of respondents said they provide employees with a break room or kitchenette, 42 percent offer a phone subsidy for business use of a personal cellphone, 20 percent provide free snacks and beverages, 4 percent have electric vehicle charging stations, and a handful (less than 1 percent) offer divorce insurance and grooming subsidies.
“The workforce is constantly evolving, and these shifts influence how employees perceive their benefits plans,” SHRM said in the report. “The marketplace is also constantly undergoing change, so benefits programs must be regularly assessed to make sure that employees understand the value of their benefits packages and that the organization is remaining competitive in the marketplace.”