USA 
United Kingdom
Employee retention has continued to be a critical issue for U.S. companies in 2024, even as the labor market cools and the turnover rate declines from its astronomical pandemic-era high.
The anxieties of HR over high attrition aren’t unfounded; according to a recent CNBC workforce survey, over one-third of workers have considered leaving a job in recent months. Of course, this poses a significant challenge for employers - how to keep their workforce engaged and satisfied.
And whilst there’s still demand for more aesthetic employee benefits, surprisingly, the answer lies not just in flashy perks, but in essential benefits like fully paid health-care premiums.
Fully paid health-care premiums - a top priority?
The same survey revealed that the number one benefit employees desire is fully paid health-care premiums, with more than half (51%) of employees favoring this over other typical benefits, including a 401(k) retirement plan match (37%), gym memberships (27%), and free food (26%).
This preference emphasizes a significant financial strain currently affecting the workforce: while roughly three-fourths of employees can afford the health-care they need without financial hardship, this drops to only 50% among the lowest income levels, according to research from Mercer.
Additionally, nearly one-in-five workers would accept a lower wage in exchange for more comprehensive health-care benefits.
“For some employee segments, affordable health care may be a higher priority than a generous 401(k) match,” notes Rebecca Warnken, Senior Vice President of Health Solutions at Aon, which itself conducted research with similar findings in recent months.
The research indicated that Black, Hispanic, Latino, and younger workers are more likely to switch employers for better health benefits, reflecting the immediate need for affordable health care over long-term financial security.
The persistent challenge of health-care costs
Currently, employers subsidize about 81% of health-care plan costs, with employees covering the rest. Despite the high subsidy, health-care inflation typically outpaces general inflation.
In 2023, the average employee health-care cost rose by 5.2% to $15,797 per employee, a figure expected to remain above $15,000 in 2024. Employers are trying to mitigate these costs by limiting annual deductible increases or out-of-pocket maximums, but fully covered health-care premiums remain rare.
In 2023, only Visa among Fortune’s “100 Best Companies to Work For” offered full health coverage.
Financial security and retirement benefits
While fully paid health-care premiums top the list, retirement planning remains a crucial concern. The CNBC Workforce Survey found that 401(k) matching was the second most desired benefit across various demographics.
The importance of financial security is emphasized by the fact that only three in ten workers report their workplace offers financial coaching or advising, highlighting a gap in support for long-term financial planning.
The shifting preferences of younger workers
Age demographic does, of course, change the benefits that the workforce finds desirable. For example, Gen Z workers (ages 18-24) are changing the status quo in employee benefits, by valuing benefits such as free food (42%) almost as much as fully paid health-care premiums (41%).
Financial aid is still a top perk for many, however. Student loan assistance is a key priority, with 39% of workers aged 18-24 ranking it over other benefits. These preferences reflect the diverse needs of a generation more likely to identify as LGBTQ+ or neurodivergent and to have different expectations for the workplace.
This matters for a company’s bottom line — employees who believe their total rewards meet their families’ needs are twice as engaged as those who do not,” Warnken notes. Higher engagement drives 23% higher profitability, 18% higher productivity, and 18% to 43% lower turnover rates.
Remote work and flexibility: The new norm
The pandemic has significantly altered perceptions of remote work. A majority of employees (97%) do not want to return to the office full-time, with many seeking a balance between remote and in-office work.
Flexible hours and work-from-home options are highly valued, particularly among workers aged 26-57, who are likely balancing work with caregiving responsibilities.
A survey by PeopleHum found that attractive perks and benefits like gym memberships and paid time off are still highly valued by U.S. employees, with 48% considering them crucial when finding a job.
However, high compensation (46%), a good work-life balance (43%), and the ability to work from home (41%) are also top priorities.
Professional development and career growth
Another key element that HR must consider is the demand for the chance to grow and progress. Professional development opportunities are increasingly important, particularly for younger employees, who may be in the early stages of their career and looking for opportunities to advance their core knowledge and learn from their peers.
According to Glassdoor, employees who engage in peer coaching are significantly more likely to feel fulfilled and report being top performers. Moreover, 87% of millennials rate professional or career growth opportunities as important, reflecting a broader trend across generations.
Hiring Managers: State of Hiring and Retention
Work-life balance and trust
Another unavoidable benefit that remains a key priority for many is work-life balance. Over half of the employees (51%) and 47% of employers named work-life balance as the most valued element of company culture. Building trust is also crucial, with 20% of employees emphasizing the importance of being trusted by their peers and superiors.
While traditional benefits like health-care premiums and retirement plans remain in high demand, they are only part of a larger ecosystem of employee needs.
Today’s workforce values flexibility, remote work options, professional development, and work-life balance. HR must adapt to these changing preferences to attract and retain talent in a competitive job market.
By offering a comprehensive benefits package that addresses both short-term and long-term needs, companies can create a sustainable and engaging workplace for their employees.
