Managing ever-increasing costs while creating a competitive benefits package and an effective annual enrollment is a tough task for most employers — and that was before the new challenges of the coronavirus.
How can you continue to protect your most valuable resource — your employees — if your business is struggling? Who’ll pay insurance premiums if employees are laid off or furloughed with no income? When can you get employees (and customers) safely back into the office? And what will this fall’s benefits package look like?
Unum, Colonial Life’s parent company, asked nearly 300 employers across the U.S. how they’ve been managing the COVID-19 crisis and what their plans are going forward.* Here’s what we learned:
Employers want to do what’s right for their employees — but they’re also facing the reality of managing employment costs in the economic downturn.
Many organizations have taken significant steps to reduce employment costs, according to Unum’s survey. Nearly a third already have or plan to furlough workers, and another 19% say they might if necessary. And 31% have or will cut salaries, hours or shifts for employees. Hiring freezes are in place at 37% of companies, 28% are postponing raises and 22% have stopped bonuses.
One strategy most employers are avoiding: cutting benefits. Nine in 10 employers say they have no plans to eliminate or reduce employer-paid insurance benefits to hold down employment costs.
Many employers are picking up the full cost of insurance premiums for employees who’ve been furloughed.
Another bit of good news: Employers are doing what they can to support their out-of-work staff. More than half of organizations say they’ll fully cover the employee-paid share of medical (52%) or life (54%) insurance premiums to avoid a lapse in coverage while employees are furloughed. And slightly fewer than half say they’re doing the same for dental (46%), long-term disability (45%), vision (44%) and short-term disability (41%) insurance premiums.
Employers’ return-to-the-office strategies vary widely.
The vast majority of employers — 92% — have transitioned at least some employees to work-from-home arrangements. Of these, two-thirds are now planning how to return their workers to the office. Most plan to use a phased-in approach, but surprisingly, one in 10 companies plan to allow everyone to return at once.
However, a third of companies haven’t yet created a return plan. It’s not clear if these employers plan to continue operating with employees working from home, or they’re understandably too overwhelmed by the complexity of the situation to begin tackling a plan.
A significant number of employers will change their benefits plan design because of the pandemic.
A third of employers foresee some changes in their benefit plans going forward. Some are considering reducing the variety of benefits offered or shifting the share of premiums more toward employees. But some organizations say they’ll go the opposite direction, boosting coverage to be more comprehensive, increase benefit options or add telehealth coverage. Nearly half (46%) say they don’t plan to make changes to their benefits plans in the coming year. And one in five companies just aren’t sure yet.
* Survey of 287 U.S. companies, April 21–24, 2020.