In 2024, post-COVID-19, employers face ongoing challenges in talent acquisition and retention. Despite a slightly cooling labor market, competition for skilled individuals remains intense. Employers must adapt with agility, addressing rising health care costs and inflation while providing essential benefits. HR professionals are incorporating AI strategies and staying compliant with evolving standards. Understanding key trends for 2024 is crucial for organizations aiming to attract and retain a talented workforce in this dynamic environment. Dig into the top six trends below, or connect with our Employee Benefits Division to build a plan that meets your unique business goals.
3 Employee Benefits Trends in 2024
Attracting and retaining employees has challenged employers since the onset of the COVID-19 pandemic. In 2024, the labor market is expected to cool slightly; however, competition for talent will remain. As such, employers must remain agile and adapt to developing labor and market trends that will shape the market in 2024. In particular, current labor challenges are forcing employers to find ways to balance rising health care costs and inflation while providing employees with benefits they value and need. Understanding this year’s key employee benefits trends can help employers attract and retain talented individuals in an evolving labor market.
1. Balancing Flexibility With Return-to-Office Mandates
Many employers responded to 2023’s tight labor market by offering remote and flexible work opportunities. As some employers begin issuing return-to-office mandates in 2024, organizations that are rigid in their policies may risk losing talented individuals and DEI efforts. They may also struggle to attract new employees from a smaller talent pool. As such, in 2024, proactive employers will focus on balancing employee expectations and needs with the benefits of having employees in the office. For instance, they may offer hybrid work options as a compromise for employees who are happier and more productive with flexible work arrangements.
Additionally, employers are increasingly focusing on creating safe, empathetic, and transparent workplace environments to promote employee well-being as they return to the office. Some employers are also offering incentives for in-person employees, such as:
- Commuter benefits
- Child care benefits
- Catered meals
2. Prioritizing Preventive Care Services
In 2023, record-high inflation and skyrocketing medical care costs prevented numerous employees from seeking necessary preventive care for fear of incurring medical debt. However, avoiding medical care can worsen long-term health outcomes and increase costs for both employers and employees by preventing the early detection of serious illnesses. As employers struggle to mitigate rising healthcare costs in 2024, many will focus on keeping employees healthy and providing benefits education to help guide them on their journeys to be educated healthcare consumers, maximize their benefits, and understand the importance of routine care.
3. Increasing Personalization and Flexibility
The modern workforce is comprised of four or five generations of workers from various backgrounds. In 2023, many employers struggled to find a benefits plan that satisfied their entire workforce. According to the Life Insurance Marketing and Research Association’s 2023 Workforce Benefits Study, nearly a third of all employers said that meeting the needs of their multigenerational workforce was a primary challenge. In 2024, employers will increasingly offer personalized and flexible benefits to address the unique needs and expectations of individual employees. The following are popular options for benefits customization:
- Flexible spending accounts
- Flexible work arrangements
- Customized retirement plans
- Convertible paid time off
- Domestic partner benefits
- Broader medical coverage
- Expanded leave
- Diverse wellness programs
- Personalized learning and development opportunities
See how we can offer customized Employee Benefits solutions here.
3 HR Trends in 2024
In today’s market, HR professionals must adapt to the changing expectations of organizations and employees amid difficult economic conditions. As such, proactive HR leaders and professionals will approach 2024 with strategies that incorporate artificial intelligence (AI) into everyday operations, satisfy employee demands for greater compensation and flexibility, and conform to evolving compliance standards. Organizations will benefit from putting people first and responding to what their workers need.
1. Artificial Intelligence
In 2023, AI exploded in popularity. Many employers adopted this technology to streamline operations, enhance workflows and improve customer experience. Looking forward, employers will increasingly leverage AI in workforce and organizational operations. As such, AI will likely play a greater role in helping employers and HR professionals make employment decisions, complete repetitive tasks and evaluate organizational data.
However, as AI becomes commonplace, employers will have to shift their focus to prioritize ethics and compliance-related issues associated with this technology. This will likely include addressing how data will be used with generative AI, who will use the technology, and how best to comply with changing laws and regulations. Furthermore, employers will continue to focus on issues of transparency, privacy and potential discrimination when using AI in 2024.
2. Skill Gaps and Skills-based Hiring
Going into 2024, employers are still struggling to find talent with the right skill sets. Although the most recent labor report by the U.S. Bureau of Labor Statistics found there were 6.3 million unemployed individuals, pervasive skill gaps continue to challenge employers looking to attract top talent. This year, employers may refocus their hiring efforts on finding employees with the right skills rather than a specific experience or education. This concept, known as skills-based hiring, evaluates candidates based on their skills and capabilities rather than traditional qualifications, such as degrees or experience.
Organizations that provide robust learning and development initiatives can consider hiring workers who are an excellent fit and training them on specific skills or tasks later. By recognizing workers’ abilities to learn and develop, this hiring method allows organizations to find skilled candidates for their open roles instead of trying to mold candidates to a set job profile.
3. Competitive Compensation
Although the labor market has eased somewhat from previous years, employers predict attraction and retention challenges will persist into 2024. Many employers will respond with competitive raises to help their workforce manage the increasingly high cost of living. According to the latest Salary Budget Planning Survey by consulting firm Willis Towers Watson, U.S. employers are planning an average salary increase of 4% for 2024. This is slightly down from the 4.4% average salary increase budget in 2023 but higher than the 3.1% salary increase budget in 2021 and 2020. Employers are also embracing benefits, such as workplace flexibility and broad health care coverage, to improve the employee experience and boost attraction and retention.
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