How employers are changing their benefit offerings as a result of the Covid crisis

clock • 9 min read

Key points

Business case

  • Employers need to be thinking of out-of-the box ways to ensure suitable benefits for staff
  • There are a multitude of options to provide full benefits services without an office space
  • But the extra mile will need to be taken by all businesses

Covid-19 has had a seismic impact on regular office life. Nick Martindale looks at how employee benefits provisions are expanding to reach the new normal

The Covid-19 pandemic is challenging almost every business in the country. Many found themselves having to face up to an extended period of time when staff could not access the office at all, while employees were thrust into a world of remote working without the usual office support structures.

Aside from the practical ramifications, this also had significant implications for employee benefits. According to a study by Howden Employee Benefits & Wellbeing, almost three-quarters (72%) of employers said they would be reviewing their employee benefits provision for workers as a direct result of the national health emergency.

There were also practical issues which had an immediate impact. Broadstone head of professional services Andrew Mobberley says: "Some of the main implications included issues such as the delivery of medical-related benefits which, in the main, stopped.

"This meant employers and employees via tax were paying for a benefit that could not be accessed. Voluntary benefits like Cycle2work and tech purchase schemes became the hottest benefits overnight, although the ability to supply some of these specific benefits became difficult due to stock levels.

"Given that these benefits are employerfunded, they also often became harder to access as employers wanted to retain cash."

The trend towards remote working - and effective closure of much of the UK and other destinations - meant there was a reduction in demand for holiday purchase, to the point that many employers were faced with staff building up significant amounts of owed leave.

Gallagher UK chief executive of employee benefits consulting division Nick Burns says: "In a bid to limit swathes of people booking holidays over the same period in the final quarter of 2020, 70% of employers we recently surveyed intend to allow employees to carry over some or all unused holidays into 2021.

"Half of these will cap the number of days to be carried over, with the average cap standing at ten days.

"It will be important that employers keep an eye on the changing demand for annual leave as coronavirus-related restrictions return more strictly, as the balance in the distribution of labour hours, as many put off utilising annual leave days simultaneously, could very easily become skewed to businesses' and employees' detriment."

Remote HR challenges

Remote working itself has created challenges for HR and employee benefits professionals. Despite many employees welcoming the release from commuting and having greater flexibility, being isolated at home without a regular routine can cause issues.

"Working remotely for long periods of time can lend itself to bad working habits," points out Unum UK HR director Natalie Rogers.

"For example, late-night emails can make employees feel pressured and can be a trigger for workplace stress. Other issues following Covid-19 might include employees feeling more isolated, increased alcohol consumption and fear of meeting people. "Employers can help by pointing staff to professional mental health support where they can and where it's needed."

As a result, benefits offering an element of mental health support are very much in vogue. A study carried out by the Reward and Benefits Association found 90% of employers are now offering more mental health support as a result of the pandemic, with 70% stating they would be increasing investment in this over the next 12 months.

Winckworth Sherwood partner Louise Lawrence says: "Support comes in many forms and has included sessions on resilience and mindfulness, exercise classes and online yoga, along with access to wellbeing apps, digital GP appointments and free counselling sessions.

"In addition, employers have reassessed how they engage with their employees who now find themselves working remotely, and have been holding virtual coffee breaks, team socials and organising buddy systems."


For those who are struggling to cope, employee assistance programmes (EAPs) can also help staff access the support they need. "They may be included in existing benefit packages or they may need to consider a standalone EAP," says Towergate Health & Protection head of specialist Debra Clark.

"I would suggest this is a whole-of-workforce requirement for employers. Access to mental health first-aider training through their benefits provider is also an option to consider."

It is also vital to let staff know what support is available, says Premier head of risk and healthcare Allyson Gayle.

She says: "From a company perspective, much more effort needs to go into communicating with staff when you are not seeing them regularly in an office or workplace.

"There also needs to be more focus on what companies can do to assist staff with isolation. Not having the office dynamic is hard and it makes it difficult to maintain the company culture."

Nor should physical health be neglected. Nuffield Health professional head of emotional wellbeing Brendan Street believes organisations need to pay as much attention to remote working set-ups as they would for employees in an office.

"Organisations need to offer a blend of physical and remote services to employees to ensure they continue to receive the same support they did in the physical office, such as desktop assessments, to enable suitable ergonomic set-up while at home, as well as access to remote services such as virtual GP or online emotional wellbeing services," he says.

"Employers should check display screen equipment assessments are completed and, if possible, provide access to face-to-face and remote physiotherapy services to help both prevent and treat musculoskeletal issues."

Bespoke health benefits

Aside from the challenges of remote working, there has been a greater demand for healthrelated benefits in general as a result of the pandemic. Gallagher's 2020 benefits strategy & benchmarking survey found that for the first time more than half (54%) of employers are now surveying staff about benefits and wellbeing in 2020, up from 26% in 2019.

"There has definitely been an increase in demand and this includes consideration for prevention - such as webinars, educating staff on tips to be as healthy as possible, increased demand in flu vaccinations, lifestyle and fitness support with access to exercise classes, healthy cooking and eating, and cycle-to-work schemes," says Clark.

"There has also been renewed interest in traditional health and wellbeing benefits, such as group life, group income protection and private medical insurance as people recognise the enormous pressures being placed on the NHS."

The pandemic has also highlighted the need for employers to offer provisions that are appropriate for their specific demographics, adds Mobberley.

"There will be some employers who don't offer death-in-service as a benefit and, as a result of the pandemic, may have lost an employee," he says.

"In times of distress clearly having a benefit that will help support the family financially while grieving is absolutely key. We are seeing some employees can be off with ‘long Covid-19', which is debilitating for significant periods of time. Again, having a benefit that supports an employee financially while they try to recover is critical."

Financial health is another area that has come into focus, as the pandemic impacts on the economy more generally and people start to realise how vulnerable they could be to unexpected events. "The spotlight has been cast on how employers can help with financial wellbeing," says Buck head of defined contribution and wealth Mark Pemberthy.

"Financial education can help employees feel more confident about their finances and give them the tools to cut costs and boost savings. Short-term help, such as providing wage advances and helping to refinance problem debt, can ease concern and boost mental wellbeing."

Buck has seen an increase in interest from employers to help staff build up short-term savings, he adds, which would give them more resilience to future shocks. "This is a significant change of focus from the more traditional view of only supporting employees in saving for retirement," he adds.

Any shift in attitude, though, is in its early stages, believes Burns: "Financial advice, to empower employees to make their own decisions with regards to savings, is very rare.

"As a result, many UK adults have limited savings and experience huge amounts of financial stress. This is an obvious area for improvement, which would impact not only on employees' personal financial wellbeing, but also the wider organisation's wellbeing."

There is some evidence that employers are looking to provide non-monetary benefits as a means to motivate staff.

"A personal favourite of mine that we have seen a lot of more recently is using the forced downtime to explore additional training and development opportunities," says Castell Wealth Management founder James Lindley.

"These opportunities are often outside those usually available to them within the workplace, and serve as a robust means to increase employee loyalty. We have done the same ourselves, offering to pay for any additional training or exams for staff that they enrol in prior to the end of 2020."

Lifestyle benefits

Lifestyle benefits can also help here, although there is some evidence that these are less valued in the current climate. Patsy Langridge, MetLife and AXA international employee benefits joint venture firm MAXIS GBN's global director of marketing and digital, says: "Our recent research found that many employees are searching for more security and protection in the Covid-19 era and are looking to move away from lifestyle benefits.

"Some 33% of employees surveyed said that they would like their employer to focus on health over lifestyle benefits as their main expectation for employee benefits."

Workplace culture firm O.C. Tanner Europe's managing director Robert Ordever believes it is more important now than ever to make employees feel special: "The most valued benefits have become the ones that help connect employees to purpose and to each other.

"Meal vouchers to share with family, recognition for great work, being asked to join a team to work on a new, exciting project - rewards and benefits such as these are far more valued during a time of social distancing and isolation. Providing powerful moments of connection will hold their value for a long time to come."

Mobberley also has a warning for employers who may be tempted to cut employee benefits as a first response to a worsening economic climate: "We are not seeing firms cancelling benefits yet but, in sectors hit hard such as hospitality and retail, it is more than likely benefits will be scaled back across all roles.

"Employers will consider non-contractual benefits in the first round as well as those benefits that typically cost the most, such as private medical cover and income protection.

"The balance is that employees really value these and, from a morale and engagement perspective, do employers want to start taking away benefits when they want employees to be fully engaged?"

Key points

Business case

  • Employers need to be thinking of out-of-the box ways to ensure suitable benefits for staff
  • There are a multitude of options to provide full benefits services without an office space
  • But the extra mile will need to be taken by all businesses

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