The headline of a recent Fast Company story is shocking to anyone who believes that traditional employee benefits will never change. The headline reads: “most corporate benefits are irrelevant now.” That is a pretty strong statement that Fast Company contributor Jordan Peace went to great lengths to defend.
Corporate benefits being irrelevant is hard to swallow. But it is an idea that must be considered. Given that the COVID-19 pandemic has transformed how businesses operate, it is reasonable to assume that benefits packages are going to be affected in both the short and long terms.
At the core of Peace’s argument is the assumption that companies will allow their workers to continue working at home perpetually. If that truly is the case, employee benefits may have to be shifted from a long-term focus to more immediate needs.
Traditional Benefits Packages
BenefitMall is a Dallas company that acts as a general agency for brokers in the employee benefits arena. They represent more than 120 carriers, many of whom offer traditional products like health insurance, vision and dental programs, life insurance, and 401(k) retirement plans.
All of these traditional products are more long-term in nature. Health insurance is long-term in the sense that it covers both immediate and future needs. It covers both ordinary illnesses and long-term hospitalizations. And of course, 401(k) plans are all about securing long-term financial needs in retirement.
Peace proposes that companies are going to have to start looking at benefits programs that address the immediate needs of their workers. One example he cited was the work-at-home mother who is more focused on childcare than retirement. This fictional mother could be the real mother of the future if states ultimately decide to forgo reopening schools.
Extra Perks Are Irrelevant Too
Peace also touched on some of those extra perks that companies offer on top of traditional benefits. These are perks like gym memberships, free in-office snacks, and coffee, ping-pong and billiard tables, etc. These are all part of a company’s overall benefits package. But if employees work from home permanently, these extra perks become meaningless.
Will a company replace in-office free coffee with coffee deliveries to employee homes? It’s doubtful. Will employees keep using gym memberships if social distancing requirements remain intact? That is doubtful as well. Suddenly the extra perks don’t matter all that much.
What People Might Need
It’s one thing to look at traditional benefits packages and see how they are less valuable in the COVID-19 era. But forward-thinking companies will not stop there. They will ask what their people actually need. They will look for innovative products they can add to their benefits packages, products that will give them the edge in hiring and retention.
At the start of the year, experts were talking about student loan repayment benefits. Although things have been put on hold by the pandemic, such benefits are still on the table. Companies are looking at ways to help their employees pay down their outstanding loans by creating a program that combines contributions from both employee and employer.
Childcare is an obvious need for families with two working parents. Perhaps some companies will start offering benefits that ease the financial burden on families. Maybe they will form partnerships with local daycare centers to provide reduced-cost care for employees. No one really knows what new childcare benefits will look like, but it is hard to believe they are not coming.
Working from home presents new and immediate needs for employees. If traditional corporate benefits truly are dead, they are likely to be replaced by more immediate need benefits.