Navigating Benefit Budgets in 2024: Three Experts Uncover Key Trends
12 Oct 2023
In anticipation of 2024, we had the privilege of sitting down with Ingeborg van Harten, Siri Wouters and Harald Lamberts. Ingeborg and Siri are both experienced HR experts and founders of their own people and culture companies. Harald is founder of Essense and an expert in the field of Employee Experience Design. In this interview, we explore key trends: from decision-making at the top to the rise of personal flexibility.
5 key takeaways for you
No major changes in company benefit budgets are expected going into 2024, regardless of the current economic uncertainty
Companies should be more creative in making the right benefit decisions
Personal flexibility in benefits is increasing. However, it also comes with challenges
Holistic well-being and lifelong learning are important secular trends—with personal finances getting increasing relevance
Generation Z is increasingly important when setting benefit strategies, but the rest of the organization should not be forgotten
How do you see benefit budgets changing going into 2024?
Companies are in the middle of creating their employee benefit budgets for 2024. Taking the fluctuating economy into account, one might think that employee benefits also fluctuate.
Ingeborg: ‘Companies tend to improve benefits in good times. When they are growing fast, they need to attract and retain talent, while building or safeguarding their culture. When times are tougher, benefits budgets might go down a little bit—but it’s much harder to take benefits away. I’ve not seen benefits drastically change once they have been implemented. What we see being cut though is future spend that’s not committed, like in L&D budgets. This is a shame because learning is one of the most appreciated benefits, and should be promoted rather than saved on.’
Harald: ‘Also, the key drivers for why benefits are important are still here today—regardless of the economic uncertainty. We continue to have a tight job market and benefits are a great way to create a working environment where you want to stay as an employee.’
Siri: ‘Yes! And because it’s so hard to take benefits away once implemented, I would advise companies that are making plans for their budgets: make sure your plans are sustainable for the longer-term. Not doing so can backfire in the future.’
What then would you advise on making the right decisions in this regard?
Ingeborg: ‘I do already see companies becoming smarter when it comes to this. For example, I see companies doing pilots. This means they can take it away if it's not working out as expected. Also, I see a lot more companies surveying employees regarding their benefits. However, when you ask if people want something, they will say “yes”. If you ask them to rank their benefits, you'll find out what they really value.’
Siri: ‘Another great way, and one I’ve seen especially at bigger organizations, is having a group of employee ambassadors that volunteer to discuss certain topics, including benefit plans, with the CHRO or CEO. What’s great here is that you don’t just get a rating on a scale from 1 to 5, but also an actual discussion about it.’
Harald: ‘In our company, our personal development coaches also play a role in making sure the right insights on benefits are bubbling up to decision-makers. They hear things and communicate back to management, obviously without disclosing who it’s coming from.’
Besides implementing employee feedback in various ways, the experts also believe that companies can get more creative in the type of benefits they offer.
Ingeborg: ‘Aside from having the right decision making process in place, it’s also important to stress that the best benefits usually don’t have high operational costs. For example: the ability to work remotely for a set period during the year. Or, having a colleague as a personal buddy or coach. These things don’t have too high operational costs, but have a huge impact.’
Siri: ‘100%. Companies can be much more creative. A good example is sports often being offered through a platform, but how great is it if you have an employee leading a bootcamp every week?!’
What about flexible benefits? How do you see that trend developing?
Siri: ‘A lot of companies are focused on diversity, equity, and inclusion (DEI). However, when we think about equity, we often mistake it for equality. It’s not about offering everybody exactly the same, but offering each individual exactly what they need. I believe you should do this whenever you can, also when it comes to employee benefits.’
Ingeborg: ‘The trend has been for a long time to make fewer exceptions. Now, I see the opposite trend. Today there are four very different generations in the workforce, hence making exceptions makes sense. That’s why I like having a personal benefit budget. We all know that people don’t always rationally make the best decisions for themselves. But, I think we are also getting to the point where we have been pampering and making decisions on behalf of employees for too long.’
Harald: ‘I agree, there’s a trend going towards flexibility. However, offering a personal budget comes with challenges as well. In reality, when you give people a personal budget, it results in them not using the full budget. For the employee, the barrier of choosing from hundreds of options, or having to indicate what they need, is often too high. That’s why we at Essense are taking a hybrid approach. We offer a personal budget. But, we are also offering specific services to everyone, like OpenUp and Equip. In my view, these are flexible as well, because every employee is flexible to make use of it! For these services we see that usage is actually quite good.’
What are other trends you are seeing?
Ingeborg: ‘Well-being is going from problem-solving towards prevention, and that’s a really positive trend. For example, there are a lot of things changing as it relates to paternity and maternity leave, which ultimately solves for a level of well-being of the parents.’
Siri: ‘Absolutely. If I can add another trend, it’s that I see that more companies are offering unlimited education. Lifelong learning, how that’s often called. I think that’s amazing, because the benefits are big for both the employer and the employee.’
Harald: ‘One specific topic touching on well-being and education is finances. Young people struggle with making ends meet each month or worry about never being able to buy a home. Knowledge about how to manage your finances is low. I don’t know where this is going in the long-term, but it doesn’t look like it’s going to change anytime soon.’
Ingeborg: ‘Indeed. It’s hard for people to find help with finances. It’s not something you learn at school. In addition, I think it goes hand-in-hand with salary transparency. Employees sometimes worry about their salary in combination with inflation. If they are not sure what their salary might become in the future at their current company they might look around for another employer with a higher salary. However, I believe people are not job-hoppers by nature. They’re always looking to find their community and their place. Helping them get a clearer understanding about their financial future will help with this.’
Siri: ‘If there is one trend now, then it’s that personal finances are going to get harder and harder, especially for younger generations. For companies it’s going to be a challenge to deal with this. You could offer financial education and financial coaching. But then there’s also the issue of inflation and the impact on salary: there’s a maximum in how far you can compensate for this as an employer. I don’t have the answer to where this is going, but definitely something I would be focused on as a company.’
How to take into account Generation Z in all of this?
Ingeborg: ‘I come back to flexibility. Not just in benefits but also in a broader sense: the projects they work on, how fast they learn, the location where they work, how many days they come into the office.’
Siri: ‘Many Gen Z-ers want to have a more healthy work-life balance: “I work to live, not the other way around”. But on the other hand, I don’t think this necessarily means that money is less important for them. That is what’s often assumed, but in the current economic times it’s definitely not what I see. This comes back to the point around financial worries that you made before, Harald.
I want to add that it’s important for companies to acknowledge that there can be frustration from older employees by accommodating Generation Z too much. Sometimes the older generations feel forgotten. They might have a concern: ‘’what do I get to develop myself for the last seven years of my career’’?’
Siri previously worked as a Global Training Facilitator and Chief People Officer, and is now following her mission to create more healthy, inspiring & empowering workplaces. She started Proud | The people company, which provides consultancy, training, coaching and external trusted advisors for organizations that want to become an employer brand to be proud of. Siri calls it “employer branding from the inside out”.
Ingeborg van Harten
Ingeborg is the founder of 7people, a People & Culture consultancy. They help startups and scaleups to become irresistible organizations, enabling them to attract and retain top talent. She has 15+ years of global HR experience and has been Head of People at companies such as Mollie, TicketSwap and Uberall. At 7people, the team currently works with 50+ of the most innovative employers in the Netherlands - building companies of the future.
Harald Lamberts, founder of the Netherlands-based service design agency Essense, is a strategic consultant dedicated to creating impactful services. He emphasizes a holistic approach in designing omni-channel customer experiences and collaborates with clients like Philips and ING on innovation projects. With a background at Microsoft and Vodafone, Harald leads Essense in promoting sustainability initiatives to help organizations transition to sustainable propositions and operations.