Benefits are just as important -- and for some, more important -- than compensation. A good benefits package can make or break landing and keeping good talent. Today, it's not enough to just have good benefits; you need benefits that meet the evolving needs of your workforce. The best way to achieve this is with flexibility.
Not every employee in a multigenerational workplace has the same needs when it comes to the benefits they want or need, so a "one-size-fits-all" benefits solution doesn't work. Employees' needs are constantly evolving, so your benefits program should keep up with changing demands, even if it means offering more "non-traditional benefits" to better address specialized needs. This is where flexible benefits come in.
The Future of Benefits is Flexibility
Rethink PTO with flexible benefits
"Flexibility" has been an HR buzzword for the last few years, thanks to the pandemic. However, while many HR professionals think flexibility simply means how and where employees physically work, flexibility can also apply to benefits. Flexible benefits are a modern approach to offering customized benefits for employees. They are unique because they can be personalized to meet employee needs while saving the company money on its benefits programs. What's more, flexible benefits can help you address the needs of all the generations in your workforce, especially as employees want to take more control over their benefits.
Paid time off (PTO) is the ultimate flexible benefit. PTO becomes valuable the second an employee earns it. However, surveys show much of it goes unused. As the graph below shows, employees have an average of 9.5 days of unused PTO each year, which costs companies billions of dollars in payouts.
Instead of thinking about PTO in the traditional sense, think of it as overall earned compensation. Hence, unused PTO is like a currency that employees can extract value and use for benefits that matter to them. Employees can convert their unused PTO into anything they deem valuable, like retirement contributions, leave sharing, charitable donations, student loan payments, and more. The idea is for employees to take full advantage of the PTO they've worked hard to earn.
Custom benefits packages for employees…
Not all your employees will take advantage of all parts of your benefits program. With flexible benefits, they can craft benefits packages around their individualized needs. For example, if your employees want to boost their retirement savings, they can convert their unused PTO to retirement contributions. Conversely, if your employees want to donate their unused PTO to a coworker needing extra PTO, they can also do that. The PTO your employees earn is theirs to use however they want, giving them the ultimate flexibility. Plus, employees feel like they are receiving the support they want from their employers to help them with various wellness and financial initiatives — 70 percent say that having a flexible leave benefit would make them feel more valued.
…And increased productivity for employers
While flexible benefits can be good for employees, they are also valuable to employers in six important ways.
- Cost savings
When employers can use their PTO instead of losing it or granting a payout, it reduces the liability of the PTO balance sheet.
- Healthier workplace culture
Flexible benefits demonstrate that you care about your employers' needs through benefits that emphasize work-life balance and wellbeing.
- Attract and retain talent
With flexible benefits, you can drive employee engagement and loyalty.
- Employee satisfaction
If employers treat PTO like a currency with a value attached to it, employees are more likely to feel satisfied because they can use it in a way that benefits them. In fact, 83 percent of workers would be very or extremely interested in converting PTO into other financial resources.
- Commitment to diversity, equity, inclusion (DEI)
Flexible benefits show an organization's commitment to DEI as they cater to the individualized needs of diverse workforces.
Unlock the full value of unused PTO
If you want to attract good talent, you need to offer a flexible benefits package that helps meet the individualized needs of your employees. Employee needs are constantly changing, and benefits programs need to catch up. Allowing employees to convert their unused PTO into the most worthwhile personal need or cause will increase employee satisfaction, retention, and cost savings.
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