New era, new values
The past two years have brought a series of monumental events to the world. Leading the way was the COVID-19 pandemic, which profoundly affected how people worked and lived. Even though lockdowns have been lifted and most aspects of life are back to normal, for many, recovery isn’t complete.
Added to this, in 2022 alone, there’s been a devastating war in Ukraine, global inflation, rising gas prices, a growing wave of gun violence in the US, and a looming recession. Even some supply chain problems — like the baby formula shortage in the US — have gone beyond being mere inconveniences to affecting many families’ well-being.
It’s become apparent to employers that their old model of benefits is no longer sufficient. The dramatic impact of the events of the past two years has created a very different employee mindset. It has torn up the employer-employee contract that had, until now, endured.
This shifting landscape is reflected in employers' challenges about what their organizations will face in the year ahead. It's telling that three out of their top five concerns are about their employees — attracting them, retaining them, and ensuring they're mentally and emotionally healthy.
Benefits, empathy, and workplace flexibility are close behind salary in terms of what matters most to workers when evaluating employment opportunities.
Whether they realize it or not, many employers have already made strides toward providing benefits and policies that employees need. They were forced to do so during the pandemic, which was a difficult time for everyone and prompted many employers to extend more workplace flexibility and emotional empathy toward their workforces. As a result, the Guardian Benefits Value IndexSM (BVI), which measures employee sentiment around how much they value their benefits, is the highest it's been in a decade.
With these concerns in mind, employers are turning their attention to their organizations' benefits, policies, and programs to ensure what they're offering meets employees' needs.
Employees are responding positively to employers' efforts in adapting to the trying circumstances of the pandemic. Workers appreciated the examples of empathy they saw their workforce take on such as gains in flexibility, investments in technology, and additional mental health resources that were added during the pandemic, and they don't want them to be endangered with the return to a new, post-pandemic normal. It’s in employers’ interests not to abandon that more empathetic mindset. Why is empathy important? Our research found the organizations that have helped drive up the BVI score are the same ones that have shown more empathy. They're proactive about the issues we’re addressing in this report. Of course, employees still want traditional benefits like a strong retirement plan and health care. But in a period of instability, they need more from their employers than resources and tools. They seek emotional empathy on every level so they feel better equipped to cope with future life and current events, from the routine to the extraordinary — at least to the extent that they can control. For those who have a choice, employees will want to work for organizations that do this successfully.
Understanding how employees feel and what brought them to this point is essential to building a work culture that provides meaningful support for employees, not only through benefits, but by making them feel a sense of belonging at work. This report examines how organizations can begin to accomplish that.
The anxious American workforce: How did we get here?
Much has been written on how the pandemic was an unparalleled inflection point for working Americans. In fact, more than two years after it began, half still rate the COVID-19 pandemic as the top source of stress in their lives.
In part, that’s because the pandemic contributed to greater loneliness and isolation.2 Indeed, many working Americans report experiencing more mental health issues in the past two years alone.
This has serious implications for well-being that we’re already seeing. Drug overdoses were up 30% in the first year of the pandemic.3
Of course, there are other factors that have also impacted employees’ mindset around their working lives and overall well-being. For example, economic uncertainty has contributed to diminished financial confidence and higher anxiety.
Americans are more likely today than they were a year ago to report being very or moderately worried about their finances.4
Another factor is current events and the stress they create. Nearly 9 in 10 Americans (87%) said inflation was a significant source of stress, followed by supply chain issues (81%). Eighty percent said Russia’s invasion of Ukraine concerned them.5
These stressors come on top of coping with a lingering pandemic. While life has always been unpredictable, this perfect storm of stress has created a mentality that the next crisis may be just around the corner, and we probably won’t be prepared for it.
New realities alter the employee value proposition
Uncertainty fuels stress, and stress fuels anxiety. The result? We’re seeing record-high levels of unhappiness, according to the 2022 Gallup Negative Experience Index.6
In the workplace, this manifests itself as burnout, low employee engagement, and job dissatisfaction. Just under 6 in 10 workers (58%) describe themselves as very happy at their jobs. More than 40% are only moderately happy or unhappy, meaning they’re at high risk of leaving.
Nearly 3 in 10 workers say they’re very or somewhat likely to leave their job in the next year.
Indeed, the Great Resignation is far from over. One potential reason is that, increasingly, workers don’t feel their employers care about them.
There’s also a connection between whether employees feel their employers care about their well-being and how well employees feel their employer handled the pandemic.
Among employees who said their employers handled the pandemic well, more than three quarters of them also strongly agree their company cares about them.8
This has resulted in a new value proposition among employees in what they need and want from their employers. Attracting and retaining talent today is not only about offering the right products; it’s about ensuring that employees are aware of what’s available to them and engaging with benefits that can help them lead healthier, more secure lives. That, in turn, helps them understand that their employer cares about them — especially key during turbulent times.
One way employers can begin to turn the tide is by grounding every benefits and policy decision they make in empathy. This is somewhat of a departure from the past, where flashy perks designed to make the workplace as convenient as possible ruled the day. But the circumstances of our changed world, which have led to declining mental health and an undercurrent of uncertainty, demand nothing short of a radical new approach to workplace
benefits and culture. Why is empathy important? Because organizations that are perceived as caring enough to do something about it will be successful in attracting and retaining their workers, and helping them thrive.
1 in 5 workers quit their job in the past two years due to inflexible hours
Before the pandemic, remote work and flexible schedules had been gaining momentum among employers, but mostly as perks granted only occasionally or on a small scale. Most employers couldn’t conceive of implementing them on a larger scale out of concern that productivity and workplace culture would suffer.
The pandemic rapidly turned that notion on its head. While this arrangement presented some challenges, for the most part organizations adjusted successfully.
For many employees, one silver lining to emerge from the pandemic was improved work-life balance due to greater workplace flexibility and emotional empathy on the employers’ part around where, how, and when they worked. Employees want to preserve that; as a result, there’s been a major sea change in their expectations.
The choice to work remotely informs employees’ overall desire for greater flexibility in all areas, including scheduling. While flexible scheduling existed long before the pandemic, more companies adopted it during COVID-19 to better fit employees’ changing needs. In fact, there has been a 20% uptick in companies prioritizing flexible schedules since 2019.9
This change in lifestyle and workstyle is so important to the workforce that it’s considered the most important benefit that an organization can provide outside of salary and standard benefits. A significant factor is the strong tie between flexible work schedules and better emotional health.
”The technology available to make hybrid work a possibility has been around for some time,” says Dean Del Vecchio, CIO and Chief of Operations at Guardian. “Employees have rapidly adopted communication and collaboration technologies in a way that is now a fundamental expectation of the workday.”
“Expectation” is the operative word. Indeed, especially for younger members of the workforce, career flexibility is contingent to them staying at their jobs.
A total of 4 in 10 employees say they’ve left or are considering leaving their jobs due to inflexible hours or the inability to work remotely. For members of Gen Z, that rises to more than half.
Clearly, this is an area in which employers should strive to be competitive because it’s a powerful talent recruiting and retention tool. In fact, more than a third (34%) of employees say flexibility is a top reason why they choose to stay at their current job. It also impacts their mental health.
A majority of employees who can work remotely at least part time have high self-reported emotional health.
While not without its challenges, workplace flexibility — when, where, and how employees work — is a major priority for most workers, who are driven to seek autonomy and independence in the post-pandemic workplace. Moving forward, employers will need to assess how to foster community, keep remote workers engaged, and provide strong mentorship and coaching when not in person.
Employees who can work remotely are two-thirds more likely to report high overall well-being.
Employers feel the impact of the mental health crisis
When it comes to the current state of workforce mental wellness, “crisis” is not too strong a word to describe it. One in 5 adults experience mental health issues annually, making it among the most pressing topics of our time and a top priority for benefits decision-makers.10
Fewer than half of full-time US employees rate their mental/emotional health as very good or excellent.
Several factors impact employees’ stress levels, but their top sources of stress include the COVID-19 pandemic (50%), money/finances (44%), and the economy (38%). This stress takes a toll on their mental and physical well-being and can affect them directly or indirectly, as when a member of their immediate family experiences stress-related disorders.
In addition, more than a third of employees (37%) say they or a member of their immediate family have experienced sleep issues and 29% say they’ve experienced elevated stress. However, a significant number of workers don’t get any assistance with the mental and emotional health issues they experience.
Reasons for not seeking help are varied, but stigma and cost were the biggest factors. More than 1 in 5 employees (22%) said they weren’t comfortable seeking help for mental health issues, while 18% said it wasn’t covered by insurance. Still, many likely don’t know where to turn because they don’t see viable options available to them through work.
While 7 in 10 employers believe they address employees’ emotional health extremely well, fewer than half of employees rate their company’s current benefits as very good or excellent.
If left unchecked, a host of consequences could occur, from short-term effects like burnout, low employee engagement, and attrition, to long-term effects like a shrinking talent pool due to more people experiencing serious mental and physical health issues. This will exacerbate the challenges employers are already experiencing with talent attraction and retention.
Robust mental wellness benefits are tied to better outcomes and greater employer loyalty
Fortunately, employers are realizing the tremendous need for improved mental and emotional health benefits. Almost a third (30%) of employers cite workforce mental and emotional health as among the biggest challenges their organization will face in the coming year, and nearly 6 in 10 (59%) say addressing their workforce’s mental health is a top priority.
Considering just over a third of organizations offer clinical mental health resources covered by insurance, there’s a clear need for improvement. Employee preferences confirm that: 6 in 10 employees say behavioral/mental health services available through work would be valuable. This was tied with physical wellness resources as their top choice for benefits.
There’s also room for improvement in how prepared managers can be when it comes to identifying and responding to their workforce’s mental health needs. While just over 6 in 10 employers (62%) believe their managers are well-equipped to recognize and respond to mental health issues, just over half say they provide training to managers and supervisors, and a quarter don’t provide training at all.
As difficult as these conversations can be, they’re necessary. Attention must be paid to employee mental health, since mental health is worse among employees who don’t feel that their employer cares about their overall well-being.
There’s also a strong tie between better mental health support and employee loyalty.
Just over half of employees who say their organization supports employee mental health want to stay at their job more than 10 years compared to 36% of those who don’t think their organization adequately supports mental health.
Yet for employers looking to boost their mental wellness offerings, what does success look like? Overall, mental and emotional health resources are underutilized; just under a third of employers (31%) consider their mental health-related resources to be used “very well.” Therefore, rather than examining utilization, a combined look to improved employee outcomes (44%), reduced absenteeism (40%), and employee retention rates (31%) should be used as their top ways of measuring success.
Workers who feel their employer supports workforce mental health are more than twice as happy at their jobs as those who don't feel supported.
Generous paid leave policies help employees balance work and health needs — either their own, or a family member’s
Paid leave is an important benefit because it helps alleviate financial pressure on employees so they can take the time they need to recover from an illness or disability, or help a loved one do so. This helps reduce anxiety around returning to work and increases the chance of a positive outcome.
Pre-pandemic, absence management and paid leave policies were rarely on senior leadership’s radar, residing almost exclusively within HR departments’ domain. However, 80% of employers agree the pandemic significantly raised senior leadership’s awareness of the importance of leave management due to the number of employees who needed to take extended leave due to COVID-19 — either for themselves or to care for a sick family member.11
Specifically, 3 in 4 employers changed their unpaid leave policies to paid due to COVID-19. Other leave management changes prompted by COVID-19 included: brand new or separate COVID-related policies, an expansion of definitions within current policies, increased benefit levels, waived waiting or elimination periods, and the increase of benefit durations.12
Improving financial benefits related to leave is critical, as caregiving almost always has a negative effect on the caregiver’s personal finances.
Caregivers are also likelier to experience mental health issues than non-caregivers.14 And with an aging population and longevity trending upward, the number of caregivers in the US is poised to increase. Employers that are seen as desirable will, therefore, address caregiving in their benefits policies.
Time off to provide care to a relative who is ill or incapacitated was the top choice among workers that, if offered by a prospective employer, would make them want to work for that company.15
Notably, women were more likely to prefer family benefits like paid parental leave: a quarter of women (25%) said they’d give parental leave heavy consideration when choosing a job. Only 14% of men said the same.16
Improving paid leave policies also extends to the kind of experience employees have when taking a leave of absence. For many, this means adopting digital options to enhance the employee experience and make it easier for them to stay in touch with their employers during the leave process.
Employers offering self-service tools are twice as likely to report a more positive employee leave experience.
Beyond technology, improving the employee leave experience begins with aligning it to an organization’s culture. “It’s important to review the organizational philosophy around leave and examine what type of education and training is provided to HR staff, supervisors, and employees,” says Garlande Patz, Sr. Absence Management Solution Practice Leader at Guardian.
One in 5 full-time working Americans had to take an extended leave of absence in the past two years to care for themselves or a family member.
People want to work for organizations that care
How inclusive and empathetic an organization’s culture is can have a profound effect on workforce well-being. That’s because workers who feel their employer cares about them also feel empowered to bring their whole, authentic selves to work. That level of psychological safety positively impacts their emotional health and overall well-being.
Employees who are a part of a corporate culture that values inclusion, supports diversity, and encourages empathy generally report 70% higher well-being than others.18 They’re also 25% less likely to experience anxiety and depression.
This is key because members of communities that have traditionally been underserved from an employee benefits and culture perspective — such as LGBTQ+ workers, those with permanent disabilities, and parents of special needs children — are nearly twice as likely to have low well-being.
One way to close this gap is by developing robust diversity, equity, and inclusion (DEI) policies. Not only has prioritizing DEI been shown to help organizations’ bottom line, there’s also a strong connection to employee retention and loyalty.
In addition, employees increasingly want to work for organizations that reflect their values and demonstrate a commitment to the greater good. Fourteen percent say that the fact that their organization's business practices and values promote a positive impact on society is a primary reason they stay at their current job. This is especially true for younger workers, particularly Gen Z and young millennials.
Members of Gen Z are almost twice as likely as members of Gen X and Baby boomers to say they’d want to work for or stay at an organization if its business practices and values promote a positive impact on society.
Creating a culture of inclusivity and emotional empathy doesn’t necessarily require significant resources. Establishing Employee Resource Groups (ERGs) and Corporate Social Responsibility (CSR) initiatives, for examples of empathy, on even a small scale can go a long way toward making employees feel cared for and part of something bigger than themselves.
83% of workers who say their organization’s culture is flexible and empathetic also say their employers encourage their engagement in charitable giving and volunteerism. That kind of civic engagement is only encouraged in 22% of workers in an organization that lacks flexibility and empathy.
A corporate culture that makes employees feel cared for, included, and where they’re encouraged to be civically engaged boosts overall well-being, happiness, and loyalty. This can take many forms, from social justice responses to CSR to ensuring language in communications is inclusive and representative of all employees. No matter what direction an organization takes, building a flexible, empathetic culture empowers employees to be their best selves at work and in life.
Workers who feel their employer cares about their well-being are more likely to want to stay at their job for 10+ years (58% vs. 31% of those who don't feel their employer cares).
Workers who understand the value of their benefits are more likely to appreciate them
Another way organizations can demonstrate examples of empathy is by ensuring employees have a better understanding of their benefits. Having a clear sense of the value of their benefits and how they can help equips workers to better protect themselves and their families, which, in turn, helps them feel that their employers care. That also improves their satisfaction and overall well-being. Fortunately, employee satisfaction with their benefits offerings is on the rise.
This indicates employers are doing many things well when it comes to benefits packages, such as adding more voluntary and supplemental health products. More options have helped boost employees' perceived value of their benefits, but there's still room for greater understanding and participation. This can be done by consciously building a better benefits experience.
Workers who strongly agree their employer cares about their well-being are 4x as likely to report high benefits understanding than workers who disagree.
Workers who report a positive enrollment experience are 30% more likely to want to stay with their employer 5+ years than those who report a negative experience.
A better benefits experience, with enhanced decision support and digital options, improves workforce satisfaction
An important step in improving employees’ benefits experience is increasing benefits digitalization, but keeping employee preferences at the forefront of the strategy.
With the widespread move to remote work during the pandemic, more than a third of employers said COVID-19 accelerated their organization’s use of benefits technology. That was an important step in narrowing the gap between how employees prefer to enroll and how they actually enroll in benefits. Nearly 7 in 10 employees (68%) prefer to enroll in benefits via a digital method, and 73% of employees reported doing so.
That’s good news, since a digital enrollment experience is correlated with higher benefits and job satisfaction.
48% of workers who say their employer provides a highly digital benefits experience want to stay at their jobs 10+ years compared to just over a third of workers who say their organizations’ enrollment methods are highly paper-based.
Benefits technology that aids in decision support should also be on employers’ radar as it helps employees make the right selections during Open Enrollment. Since only about 1 in 5 employees (22%) report being extremely confident in their benefits choices, the use of data to improve benefits decision-making is key to boosting employees’ confidence in their selections and, by extension, their well-being. Confidence in benefits choices and
better understanding of benefits are strongly tied to how cared-for employees feel.
Among workers who strongly agree their employer cares about their well-being, two-thirds are highly confident in their benefits selections.
However, there’s room here for significant improvement on the employers’ part in communicating with and educating employees about their benefits options.
A minority of workers (47%) say their organization's benefits communications
are not very effective in helping them make the right choices.
Employers should evaluate their benefits education and communications strategies periodically to ensure they provide sufficient guidance for all employees. They must consider demographic factors to ensure their communication methods and channels suit employee preferences and demographic differences. This is another key way to help employees feel supported and included. After all, the more workers are aware of what their employers provide and the better they understand how these benefits can help them in their daily lives, the more likely they are to feel their employers care.
Creating an empathetic culture for a new era
As the scenarios throughout this report illustrate, every employee has their own set of circumstances and priorities shaping who they are and creating unique pressures that can impact their work and well-being. Their values in an employer have therefore shifted, and the employers who will succeed are the ones who’ll put employee needs first, making workers feel a sense of support and belonging at work.
The common thread running through the benefits employees expect today is empathy.
Fortunately for employers, adapting their benefits, programs, and policies to fit employees’ changed expectations can be a powerful and effective way to attract and retain talent.
Benefits are a top reason why employees stay at their current jobs (ranked 3rd behind compensation and enjoying the work).
Why is empathy important? Read on for ideas on how to build a benefits program driven by empathy that will help make employees feel supported and create a culture of caring in your organization.
Paid leave
Paid family and medical leave policies permit workers to take time for parental bonding or to care for sick/injured loved ones.
Paid sick leave allows employees to receive pay when they are sick and unable to work or should not be working around others.
Flexible workplace arrangements
Telecommuting: For many employees, the option to work remotely at least part time is a must-have. Investing in collaborative technology and communicating regularly with employees helps maintain connection and can boost productivity.
Flexible scheduling allows employees to adjust their work hours to accommodate their personal lives, such as caregiving responsibilities, child care, or health conditions.
Effective benefits communication
Raising awareness: Employees desire more information about their benefits choices, especially early and late career workers who are interested in more targeted guidance based on their career stage. Look into providing employees with the opportunity to meet with a benefits advisor.
Omnichannel: Given employees’ different needs and preferences, an omnichannel approach to benefits communications is likely the most effective way to reach all employee segments where they are.
Mental health resources
Mental and emotional health resources, from access to counselors to meditation apps, are key to helping employees cope with stress.
Telehealth offers medical and dental consultations, evaluations, diagnosis, and treatment using a variety of digital and online channels. Virtual access to health care professionals is particularly appealing to busy single parents, persons with disabilities or restrictive health conditions, and those living in areas where access to health care is limited.
Corporate culture
Diversity, equity, and inclusion (DEI) strategies provide a framework of resources and policies that can help ensure all employees feel supported and included. Prioritizing DEI is tied to higher employee engagement and satisfaction.
Social justice responsiveness has rapidly become an important area of focus for organizations as employees increasingly desire and expect their employers to take a stand on important issues. Developing a strategy that aligns with your company’s values and strengths will help determine appropriate ways to respond.