Employers increased investment in benefits during pandemic but many employees did not feel supported

Research shows disconnect in employer benefits communication and employee engagement with benefits on offer

Despite a majority of companies (69%) increasing their benefit spend considerably during the pandemic, just half (55%) of employees felt they received the support they needed at the right time. The latest Mercer Marsh Benefits (MMB) report, The Digital Revolution – Accelerated approaches to employee reward, wellbeing and engagement, shows a clear disconnect between what companies are doing to support their people and how it is perceived by their employees. While most companies (88%) moved quickly to adapt their benefits in response to the pandemic, only 22% of employees realised that their benefits had changed and four in ten felt their employee experience was worse as a result of the pandemic.

According to the MMB research, employers increasingly became providers of wellbeing as well as work during the pandemic. Of those that changed their benefits during the pandemic, six in 10 changed their value added benefits and four in ten changed their core benefits, while 83% of respondents introduced new wellbeing offerings as a direct result of the pandemic. Despite the overall lack of understanding of many of these changes on the part of the employees, those that did notice a change appreciated the increased provision of mental wellbeing support the most, illustrating the continued mental health impact of the pandemic.

David Dodd, Partner, MMB, said:

“While the pandemic caused businesses to pivot their benefits offering at a pace not previously thought possible, employees are yet to notice an improved experience. Better communication is needed to close this gap, as well as delivering more relevant, personalised benefits, ideally through a consumer grade digital experience.”

Mr Dodd added: “When employers get it right, the results are tangible and visible through greater workforce engagement. In this period dubbed the great resignation, ensuring the workforce feels supported and heard is not only important in fostering a positive culture, it is also key to effective talent retention and attraction.”

Justifying the spend

According to the MMB research, the increased investments in benefits means that more than six in ten employers are now spending between 16% and 25% of base salary per employee. But despite this significant spend just over half of companies (55%) report on benefit take-up levels, and so are lacking the insights into return on investment. With 84% of company respondent seeing more C-suite involvement in the benefits design and communication, being able to make a compelling business case to secure budgets is becoming a key priority for HR.

Mr Dodd said: “If employees are not perceiving the value of their benefits, there is a danger that when this spend comes under greater scrutiny, justifying budgets will become increasingly difficult. For many the collection of this data remains a challenge, but a challenge that simply has to be overcome if true success is to be achieved.”

How companies plan to adapt to the continued workforce challenges created by the pandemic is clearly illustrated in MMB’s recent research with REBA, where 62% of employers say they plan to align their benefits offering to reflect the changing needs of their workforce. A further, 58% plan to increase the use of data analytics to inform future benefits strategies and 49% look to make benefit offerings more digital.