Benefits and Compensation, Learning & Development

How Flexible Benefits Can Help Companies Meet New Employee Demands

While shocks like COVID-19 and the current economic crisis are immensely destructive, they can also lead to healthy realignments of values and creative solutions to old problems. For example, as millions of employees have dealt with dramatic changes in how they work over the past 2 years, they’ve reassessed what they want from employers. The companies in the strongest position to succeed over the next several years are the ones that have open discussions with employees about their needs and actively seek to meet them.

flexible benefits

With tight labor markets, dismally low engagement rates, and high turnover, it has never been more important for HR leaders to reassess their benefits programs to ensure employee well-being and encourage retention. It’s not just enough for a company to offer a competitive salary; it has to provide ample professional development opportunities, workplace flexibility, and a culture of well-being in which all employees feel valued and supported as individuals.

Employees are increasingly focused on work/life balance, but this doesn’t mean companies have to sacrifice productivity to keep their workforces happy. By helping employees balance the demands of home and work, HR leaders will improve morale, retain employees, and ultimately improve productivity.

Why Flexible Benefits Are Vital for Today’s Workforces

The demand for flexible work options has increased dramatically. McKinsey estimates that 80 million Americans are engaged in some form of remote work, while 87% who have an opportunity to work remotely take it. A 2022 survey conducted by the Society for Human Resource Management found that the proportion of organizations offering flexible work benefits surged from 49% in 2019 to 83% in 2020 and 2021. While this shift was spurred by the pandemic, remote work clearly isn’t going away.

While HR professionals often think of flexibility in terms of how and where employees work, they should broaden this concept to include the benefits they offer. Employees want the ability to craft their benefits packages around their unique needs, which is why the most useful benefits are the ones that can be adjusted individually. Consider a policy of accrued time off that employees can use (or not use) as they see fit versus unlimited paid time off (PTO). Unlimited PTO sounds like it offers flexibility, but in reality, the stipulations around an unlimited PTO policy (such as manager expectations and unclear policies) don’t make it flexible at all. 

Accrued PTO, on the other hand, can be redeemed for pay at the end of the year or repurposed toward other employee priorities (such as retirement contributions, health savings, or life planning accounts). This is just one example, but it demonstrates why HR teams have to make sure benefits are actually flexible.

Professional Development Opportunities Are Critical

Another essential form of workplace flexibility is the availability of professional development opportunities. Employees don’t want to feel like they’re locked into narrow roles at work; they want to try new things and find a job that puts their skills to the best-possible use while also looking for opportunities to advance their career. They’re also willing to learn new skills to make this happen. The global economy is only becoming more competitive, and the labor market is already showing signs of slackening (the number of job openings decreased to just over 10 million in August), which is why employees recognize the need to keep pace.

According to a recent PwC survey of over 32,000 employees, 77% are “ready to learn new skills or completely retrain.” This represents a tremendous opportunity for employees and employers alike. Despite the cooling labor market, it’s still extremely difficult for companies to find talent. Meanwhile, high turnover rates are disrupting productivity and imposing significant hiring and onboarding costs. When HR teams focus on training and professional development, they’ll solve many of these problems simultaneously: They’ll ensure employees are in the right roles while offering a form of flexibility that will keep those employees around.

Gallup reports that a major element of employee engagement (which sits at just 20% worldwide) is the “opportunity to do what I do best every day.” By prioritizing professional development, HR teams will provide these opportunities.

How Flexibility Contributes to a Healthy Workplace Culture

Flexible benefits and professional development programs have a direct impact on the resources available to employees, how they work, and their job responsibilities. But flexibility has a more fundamental effect on your workforce: a healthier culture. When companies strive to address employees’ unique needs and concerns, they demonstrate they care about the well-being of their workforces. Instead of creating a high-pressure culture, workplace flexibility prevents burnout and disengagement by helping employees find a healthy work/life balance.

When HR teams use flexible benefits and talent mobility to develop a culture of well-being at their companies, they won’t just reduce turnover; they’ll increase productivity. Flexible resources like convertible PTO put employees in charge of maintaining a healthy balance between their personal and professional lives. Too many HR leaders assume they know what employees want, but this is always a mistake. Instead, survey your workforce to determine which benefits will provide the most assistance.

Although this is a difficult time for HR professionals, it presents unprecedented opportunities to build stronger relationships with employees. Just as employees have radically changed how they view the intersection of life and work, forward-thinking HR leaders should do the same.

Rob Whalen is Co-Founder and CEO of PTO Exchange.

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