What will the post-pandemic future of work look like for small and midsize businesses (SMBs)?
As companies design their return-to-work policies, SMBs are facing a once-in-a-generation opportunity to rethink their employee benefits strategies.
After all, employee benefits play a critical role in how companies of all sizes attract and retain top talent. While SMBs might avoid offering certain benefits because of cost, the most strategic ones are investing resources in the benefits employees say they want and need—because doing so is good not only for their workforce but also for growing the business.
“Childcare enhancements, home office stipends, reimbursements, telemedicine and flexibility—these were some of the top benefits we saw take center stage in 2020,” says Bhushan Sethi, PwC’s global people leader. “As we approach a post-shutdown world, we can expect these to carry over. But, it’s also an opportune time for employers to take a fresh look at their rewards and benefits based on employee preference.”
After more than a year living and working during the COVID-19 pandemic, it’s become abundantly clear that people need care in order to work. That’s because nearly every employee at every age and life stage (not just during pandemics!) will need to find care for either themselves or a loved one. Care is a universal need that comes in all shapes and sizes, like working parents with school-aged children; younger workers about to start families; middle-aged workers caring for an aging or ill parent, grandparent, or spouse; and pet parents of four-legged family members. It’s personal.
SMBs are more often investing in care as a critical component of their employee benefits strategies. Here are three reasons why.
Care Benefits Are a Must-Have: Competitors Offer Them, and Employees Demand Them
In a recent study by the Principal Financial Group, SMBs cite affordability as the primary factor when deciding on what employee benefits to offer. But, they also say their ability to recruit and keep top talent is the next most important factor.
While SMBs do face tension between controlling costs and investing in talent, the COVID-19 pandemic has exposed an undeniable reality for any business: To attract and keep the best and brightest people, care benefits are mandatory, not optional.
As small business job growth picks up and returns to its pre-pandemic peak and people make the return to work, employees know that care is mandatory, too, especially working parents, comprising about a third of the U.S. workforce, or an estimated 50 million workers, who were thrown into an unprecedented situation throughout the COVID-19 crisis. And their scars run deep. In a post-pandemic world, they’ll likely never tolerate working for an employer that doesn’t support their care needs.
In study after study, we see the negative economic impact of forcing people to choose between care and their career. Is this really a fair choice? One survey found that nearly 20% of working parents had to leave work or reduce their hours solely due to a lack of child care during the pandemic. As of this article’s publication, millions of working parents, including an alarming 1.5 million women, still remain out of the workforce.
Employees often hear about how big companies like Starbucks and Amazon are taking steps to make big, family-friendly enhancements to their benefits and policies. This doesn’t mean that SMBs can’t follow their lead. In Care.com’s Future of Benefits report, in which we surveyed 500 HR leaders and C-suite decision-makers from companies of all sizes across the United States, 63% said they plan to increase their childcare benefits, and 41% plan to expand their senior care offerings.
Care Benefits Offer Flexibility for Parents and SMBs
Care benefits aren’t one size fits all. They can be tailored to fit the needs of both employees and the business. SMBs worried about resources have lots of creative options at their disposal to offer either full or partial care coverage to their employees.
SMBs can offer several family-friendly care benefits and policies to their employees, including:
- Access to online platforms to find care for children, adults, seniors, pets, and more;
- Subsidized backup care;
- Gender-neutral paid family and medical leave programs;
- Flexible childcare spending accounts; and
- Discounts at childcare and senior care centers.
In addition, there are lots of other low- to no-cost options that support employees in taking the time they need to care for themselves and those they love. For instance:
- Building flexible work schedules
- Offering unlimited paid time off
- Expanding paid time off to care for a child or family member
When offered, employees actually use these benefits, too. SMBs consistently see high enrollment and utilization rates of care benefits across their workforces, according to internal Care.com data.
Care Benefits Impact Growth—And Are a Business Imperative
Nearly all (98%) of the HR leaders we spoke with for our research said they plan to newly offer or expand at least one employee benefit this year as a result of the pandemic. They’re prioritizing the benefits and policies workers deem most essential, like child and senior care benefits, flexible work schedules, and mental health support.
Their reasoning behind this benefits strategy was not purely altruistic. The dysfunctional situation caused by the pandemic was taking a toll on employees’ lives and on business performance, such as through decreased productivity and retention, increased absenteeism, burnout, and declining mental health.
Just as larger employers are realizing they can no longer afford not to offer care benefits, SMBs, too, are seeing the value of investing in care as central to their strategic growth plans. More than half (53%) of the HR leaders we talked to said increased employee productivity was a potential positive impact of care benefits. And, 59% cited improved mental health as one of the primary outcomes of caregiving benefits.
“Give employees the benefits they value, and they’ll be more satisfied, miss fewer workdays, be less likely to quit, and have higher commitment to meeting the company’s goals,” says Joe Lineberry, a senior vice president at Aon Consulting. “The research shows that when employees feel their benefits needs are satisfied, they’re more productive.”
So, while neglecting to offer employees the benefits they want might appear good for the bottom line in the short term, in the long term, it will backfire. A happy and healthy workforce is a productive and loyal one. And if 2020 showed us anything, it’s that, regardless of size, companies thrive and grow when they invest in their people.