2021 Future of Benefits Study

2021 Future of Benefits Study: Employee Benefits Trends and Silver Linings of the Pandemic

Our latest study delivers new insights into the silver linings of the pandemic and the employee benefits U.S. workers value most.
Contributors
Jonathan Bennett
Jonathan Bennett, Head of Group Benefits, The Hartford
Katie Dunnington
Katie Dunnington, Head of Absence Management, Group Benefits, The Hartford
Adele Spallone
Adele Spallone, Head of Clinical Operations for Workers’ Compensation and Group Benefits at The Hartford
The Hartford’s latest Future of Benefits Study, taken nearly a year after the onset of the pandemic, offers a glimpse into the future workplace and trends in employee benefits. This study, which was fielded in February 2021 – and previously in March and June of 2020 - is part of The Hartford’s ongoing effort to deliver new insights about U.S. workers and their benefit preferences, as well as trends in the benefits employers provide to their workforce.
 
Despite the challenges U.S. workers and employers experienced over the past year, our study found some silver linings emerge amid the pandemic in employee benefits, workplace culture, mental health and employee engagement. As the country begins to move forward into different phases of reopening and more employers transition their workforce back to the workplace, the additions, adaptations and attitudes help define an emerging road map. One that leads us into the new realities of workplace culture and benefits.
 

Paid Leave Expands, but Workers Have Concerns Taking Time Off

The pandemic underscored the need for paid time away from work, and employers have responded. The study showed that 75% of employers have expanded their paid leave and PTO programs beyond state or federal requirements. The most common benefits added last year were paid medical leave and sick time:
 
  • Medical leave: 46%
  • Sick time: 46%
  • Family leave: 39%
  • Parental leave: 30%
  • PTO/vacation time: 30%
2021 Future of Benefits Study Infographic 1
However, our data shows that some employees believe there is a stigma associated with taking a leave of absence. In fact, 31% of employees say they are fearful of workplace repercussions for taking leave, such as getting fired, laid off, skipped over for a promotion/raise or reduced hours. And 29% believe there is a negative perception associated with taking leave.
 
The need for paid time off for medical leave or caregiving is not going to diminish once the pandemic is over – and neither is the complexity of leave management and compliance for employers. As the leave landscape continues to rapidly change, employers face a variety of challenges in administering the many types of leaves to fully support their workers.
“The complexity has become exponential, and we’re here to help.”
 
– Katie Dunnington, Head of Absence Management for Group Benefits at The Hartford
 

A Renewed Focus on Bedrock Benefits

The crisis helped people focus on what’s most important when it comes to the benefits they’re offered. People were faced with situations they never thought would happen to them, which created a greater focus on the foundational employee benefits that can provide financial support when people need it most.
 
2021 Future of Benefits Infographic 2
In the most recent open enrollment, a majority of U.S. workers chose voluntary benefits that help protect their income, especially in light of rising medical and hospital costs and high deductible health plans. Participation in these bedrock benefits, such as life and disability insurance, and hospital indemnity and critical illness insurance, was higher. And many employees said these benefits were new selections for them:
 
  • Critical illness: 35% new selection
  • Hospital indemnity: 32% new selection
  • Accident insurance: 24% new selection
  • Life insurance: 21% new selection
  • Short-term disability: 14% new selection
  • Long-term disability: 13% new selection
Benefits used to be more about attracting and retaining talent, and this has shifted to the realities of taking care of your workforce. Gone are the days when attracting new talent meant offering in-office perks like ping pong tables and nap rooms. The future of benefits is about a renewed focus on the benefits that keep employees healthy and productive.
“We all have a role to play – employers, benefits providers and brokers – in continuing to accelerate these positive shifts and evolve our ways of business to meet the changing needs of today’s workforce.”
 
– Jonathan Bennett, Head of Group Benefits at The Hartford
 

Employers Step Up to Address Mental Health Concerns

The move toward a more compassionate and inclusive workplace was clear in the data. A majority of employees (59%) said their company has been more accepting of mental health challenges in the past year, and 58% of employees say their company provides employees the schedule flexibility to get the mental health help they need.
 
2021 Future of Benefits Infographic 3
Despite the progress, however, mental health continues to affect employees and their productivity. Today, 27% of U.S. workers say they struggle with depression or anxiety most days or a few times a week, which is up from 20% in March 2020. The numbers are higher among younger workers:
 
  • Gen Z/Younger Millennials: 52%
  • Older Millennials: 38%
  • Gen X: 26%
  • Baby Boomers: 10%
U.S. workers say their mental health affects their productivity at work in the following ways:
 
  • Trouble focusing/concentrating: 61%
  • Feeling irritable/angry: 46%
  • Missed time (late to work, leave early, missed days, unexpected absence): 29%
  • Unable to collaborate: 19%
  • Missed deadlines/meetings/quotas: 18%
Employers recognize the toll the pandemic has taken on workers, with employers citing virtual fatigue and workplace burnout due to COVID-19 as significant workplace issues. If not addressed, it could lead to unexpected or more frequent work absences and injuries on the job. Employers have an important role to play in combating the stigma around mental health in the workplace and encouraging employees to seek the help they need.
 
Of the employers we spoke to, many indicated that they have been raising the visibility of these programs for general awareness to educate workers and encourage employee assistance program (EAP) use. And 70% of employers indicated they have seen an increase in the use of their EAPs in the past year.
“While the pandemic has brought greater attention to the mental health challenges many workers face, it has also shed light on the ways employers can support their teams’ wellness with resources, help and education.”
 
– Adele Spallone, Head of Clinical Operations for Workers’ Compensation and Group Benefits at The Hartford
 

Digital Enrollment and Education Accelerates

The pandemic accelerated the shift to digital benefits enrollment. This gave employers an opportunity to reach their employees through new forms of communication. By testing and evaluating the effectiveness of a variety of new channels – all in partnership with their insurance and technology providers – they were able to make benefits education more accessible and understandable.
 
  • 41% of employers said it’s their full responsibility to make sure employees understand their benefits
  • 68% said educating employees about benefits is a challenge
  • 37% said employees don’t understand enough about the value of benefits to justify the cost
2021 Future of Benefits Infographic 4
Employers and employees have signaled a strong desire to make benefits enrollment a more personal and tailored experience. Even in the best of times, insurance benefits can be confusing to employees. When it comes to what insurance benefits they should buy, 58% of surveyed workers would like a personalized recommendation on what they should select. Employers are increasingly comfortable with sharing data to help create these personalized experiences. In fact, 76% of employers (up from 70% in June 2020) say they would be open to sharing basic employee information with insurance carriers to provide more personalized recommendations for their workers. Providing a mix of digital tools and personal guidance can help employees understand their options and maximize their benefits.
 

Read the Full 2021 Future of Benefits Report

For a more detailed look at our findings and employer takeaways, you can access and download these helpful resources:
 

Study Methodology

The Hartford’s 2021 Future of Benefits Study was fielded from Jan. 11-Feb. 19, 2021 and included 617 employers and 1005 employees. The previous two waves of the research were fielded in 2020. The first wave was fielded from Feb. 27-March 13, 2020, just before the pandemic escalated in the United States, and included 761 employers and 1,503 employees. The second wave was fielded from June 15-June 30, 2020 and included 567 employers and 1,038 employees. The employers surveyed were HR professionals who manage/decide employee benefits and employees surveyed were actively employed. The margin of error is employer +/- 4% and employee +/-3% at a 95% confidence level.
 
 
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