Benefits Packages Reflect Home-Work-Home Reality

Creative benefits packages targeted to improve employee retention among remote workforce

Rising uncertainty around the Omicron COVID-19 variant has forced many companies across the United States to revise their back-to-office plans. In response to shifting guidance from public health authorities, businesses are once again weighing when to have employees return to the office and what steps they need to take to do so safely.

Many companies that had planned for their workers to return to the office in January are now postponing their reopening plans indefinitely. Also, in addition to the Omicron COVID-19 variant, companies are confronting the reality of a tight labor market and emboldened employees. As a result, flexible work-from-home policies are being touted as a way of attracting new talent.

The consulting firm Deloitte recently announced its plan to offer its employees a subsidy package so they can equip their home office with the tech needed to do their jobs more efficiently and more comfortably continue to work remotely. The subsidy has been lauded as a nice perk for employees and a solid investment in employee productivity.

Deloitte’s 300,000 staff members are being offered a $500 work-from-home technology subsidy, a $1,000 well-being subsidy, and 15 paid holidays in 2022. For some workers, the subsidy package also includes a salary increase that surpasses the normal annual boost. 

Deloitte’s investment of more than $1 billion in compensation and benefits to better support employees may be an indication that the consulting giant has given up on the idea of workers returning to the office.

Deloitte isn’t alone in offering new incentives to workers. During a benefits boom, companies in many industries are offering new perks like identity theft protection, pet insurance, mental health support, and group legal benefits to more traditional offerings. These new and varied benefits reflect not only the evolving nature of stay-at-home work but also the toll of the pandemic on a strained labor market. 

Hourly workers are being offered benefits and increased wages

Increases in worker compensation have extended beyond benefits packages. In order to entice and retain pandemic-strained workers, some major national brands are raising wages for hourly workers. 

In June 2020, Target led the way and raised its starting hourly wage in the US to $15. The retailer also gave frontline store and distribution center workers a one-time $200 bonus to recognize their work during the pandemic.

In addition to increasing hourly wages, Target plans to spend $1 billion more on its employees this year than last. Large retailers like Target and Walmart have not had to resort to layoffs and furloughs because their stores have remained open during lockdowns, but their workers are more vulnerable to COVID-19 exposure. In response, Target’s new benefits will include providing employees with free access to virtual doctor visits. Target will also offer extended paid leave for vulnerable employees including those 65 or older, pregnant, or with underlying conditions.

Walmart — the country’s largest private employer with a US workforce of 1.5 million people —raised its hourly minimum wage to $12.00 an hour and made other compensation adjustments that brought its average pay to $15 an hour. Walmart CEO Doug McMillon said in an interview with CNBC’s Courtney Reagan that Walmart will continue to raise its minimum wage over time.

So far, salaried workers are less likely to receive pay raises but more likely to see increased benefits like flexible work, child care stipends, mental health programs, and paid leave. Large employers are expanding paid leave benefits, and many also are expanding the reasons paid leave can be taken, including for parenting and caregiving obligations, and bereavement, according to the 2020 Large Employers' Leave Strategy and Transformation Survey from the National Business Group on Health.

The pandemic has made employers more aware of the caretaking responsibilities their workers face at home. A report released by Care.com has found that employers are adjusting employee benefits to offer new or expanded childcare benefits "in the near future."

Care.com found that 64% of employers reported that caretaking concerns were a major factor in high attrition rates. To aid this, employers are opting to offer more work flexibility (66%) and add childcare benefits (63%).

Announcements about compensation and benefits may signal a growing willingness to use total compensation as a recruitment and retention tool in a competitive labor market.