3 employee trends set to influence reward and benefits in 2024
As we head towards the new year, many reward, benefit and wellbeing leaders will be thinking about their 2024 benefit enrolments and updates to their annual wellbeing strategy. As they set their strategies, keeping consumer trends in mind can help deliver the best for employees.
People often talk about employees and consumers as if they are different people – when they are actually the same people. So, when trying to predict employee benefit trends, it’s useful to look at what is expected of consumers.
Retailers will tell you there’s a lot to be learnt from being able to react quickly to the changing needs, habits and preferences of consumers. Indeed, 52% of employees say that their expectations of their benefits package have increased in the last 12 months, and 50% say the same for wellbeing.
Here are three key consumer trends that Benefex believes will drive employee benefit trends in 2024:
1. Seeking more ways to fight climate change
The desire to change behaviour to create a better world is fast becoming a priority for most employees. Consumers are already backing up their views on the environment and sustainability with their purchasing behaviour.
Analysis by NielsenIQ has found that the ESG agenda has started to shape every day consumer products, with phrases like ‘eco-friendly,’ ‘cruelty free,’ ‘organic’ and ‘cage free’ commonplace.
The data shows that the use of these types of words, or those related to things like sustainable farming methods, plant based, social responsibility and sustainable packaging, are also growing incredibly rapidly.
ESG-related products are outperforming their competitors on growth. In its Consumer Index Research, EY found that 67% of consumers have thought about, or are purchasing products that help protect against the impact of climate change. Harvard Business School reports that sustainable products have 5.6x higher average sales growth compared with those not marketed as sustainable.
Shoppers (and employees) across the Americas, Europe and Asia-Pacific are placing “combatting climate change and impacts” in their top two consumer issues. In 2023, 55% of employees say that high ethical standards are very important to them when choosing a new employer and 45% said they want to see a commitment to sustainability.
In fact, employees feel so strongly about these types of issues that they are more likely to accept a job from a company that enables them to be more sustainable. More than half of consumers in 2023 made significant efforts to live more sustainably through everyday actions, and a benefits scheme can help them to do just that.
2. Spending cuts likely to be permanent
Consumers remained prudent when it came to spending money last year as the cost-of-living crisis continued to bite. Deloitte reported that most consumers downgraded their shopping brands in 2023 and that they expected that change in behaviour to become a permanent feature.
Discount shopping became even more mainstream last year, and 2024 will probably see even more employees wanting their employer to help them find ways to make their pay go further.
Even in the last quarter of 2023 when the cost-of-living crisis was said to be was easing, almost half of consumers say they were paying more to live than they had at any other point in the year. As a result, in 2024, half of consumers expect cost will be the primary driver of any purchase they make.
The events of the last few years have prompted a surge of new consumer activity. A high number report they are moving away from brands they love to others that help them live with more purpose, or save them money, bringing together a desire for sustainability with the need to reduce costs.
The benefits companies offer must be focused on helping employees keep more of their hard-earned income in their pockets. Indeed, 65% of employees rated benefits that support their financial wellbeing as very important when choosing a new employer.
As a result, 2024 will probably give rise to re-engagement in employee discount schemes as a result of these changes in consumer behaviour. And tools which help employees switch to more cost-effective mortgage and energy deals will continue to grow in popularity.
3. Mood boosting benefits are set to be big
There is growing evidence that consumers (and employees) are attempting to make up for lost time and even lost memories, as well as re-connect with their past selves. Modern marketing is heavily laden with the past and feelings of nostalgia, from reviving old TV adverts, re-using old packaging on items such as chocolate bars, or tapping into other positive cultural memories. And the data shows that it’s the younger consumers who are embracing this the most.
As a result, experiences like holidays, days out, afternoon tea, etc, are all set to make a comeback. Employee benefit schemes should include access to positive experiences that give employees things to look forward to and plan for.
Benefits like holidays, experiences and days out also play a part in what is being called ‘the care economy’, where consumers are wanting to invest more in hobbies, recreation and creating memories with friends and family. This trend is also being referred to as ‘zenthusiam’ - where consumers find ways to relieve stress by spending money on themselves and recreation.
More than reward or just money
Driving these three trends is the fact that the people that work for you are emerging from five tough years. All of the data suggests that many of us are reassessing what matters most to us, how we want to spend our money and our time.
We are all looking for ways to reduce uncertainty in our lives by focusing on what matters most to us and creating new life experiences. We are searching for ways to support our communities, the people that are important to us – and ultimately ourselves. But we are also exercising better awareness and habits in how we spend money and get value from the things we buy.
There’s an opportunity for employee benefits schemes in 2024 to meet these new consumer trends. Your benefits strategy can help to deliver more calm, cost-saving and meaning to people’s lives.
In partnership with Benefex
The home of award-winning employee benefits, reward, recognition, & communications.
