How Small Business Employees Really Feel About Their 2020 Benefits and Perks

If you’re like most American small businesses, there’s a good chance your thoughts about employer-sponsored benefits have shifted during this year. Benefits and perks you might not have thought about offering — like work-from-home stipends, access to mental health, and wellbeing programs — may have shot to the forefront.

On the other hand, you may have taken a critical look at the price of your company’s benefits package, trying to understand what you should keep or cut in order to offer a competitive package while keeping costs down.

These reshuffled priorities come at a time of great uncertainty, amidst a presidential election where healthcare is a hot-button issue, a global pandemic, and rising COVID-19 cases in the U.S.  – not to mention, open enrollment season is just around the corner.

For a closer look at how employees really feel about employer-sponsored benefits, Workest and Zenefits surveyed more than 1,100 full-time, W2 employees who work at small or medium-sized businesses.  All respondents currently receive health, medical, or vision benefits through their employer.

How employees feel about benefits

The majority of survey respondents (75%) said they are satisfied or very satisfied with their current employer’s health plan. The tops reasons they cited were:

• Coverage (71%)
• Benefits are useful to current situation (58%)
• Cost of benefits(55%)
• Satisfied with in-network doctor and medical offices (48%)

Just 9% of survey participants said they were dissatisfied or very dissatisfied with their current employer’s health plan. The top reasons they cited were:

• Too expensive (66%)
• Limited coverage (60%)
• Dissatisfied with in-network doctors/medical offices (16%)
• Benefit is not useful to their current situation (14%)

It comes as no surprise that health insurance is the No. 1 benefit that employees want. This was true before the pandemic, and still remains a top priority. Rounding out the top 5 of most valued benefits is Paid Time Off/Vacation; Vision/Dental Insurance; 401(k)s; and Life Insurance.

The quality of benefits have seemed to improve: 26% of respondents said benefit options have gotten better year over year, while 16% of respondents said they have gotten worse. The majority of respondents (58%) indicated they were the same.

Other key takeaways:

• Half (50%) of respondents said health insurance is a primary reason they are staying at their job.
• The majority of participants (51%) said they are “very unlikely” to accept a job that does not offer health benefits, and 19% of respondents said they were “somewhat unlikely”
• 28% of respondents said they left a job because of poor benefits packages.
• 47% of respondents said they are staying with their job because of other, non-health benefits

The table above shows what benefits surveyed employees currently receive from their employer.

How employees feel about perks

In recent years, HR departments have been hyper-focused on improving the employee experience to help recruit and retain top employees. Perks were one of the levers used to entice candidates. Perks include student loan assistance, remote work, career development, catered lunches, and wellness programs.

In our survey, respondents indicated that they would be willing to forgo some perks if their employer didn’t subsidize the cost. Those included Health & Fitness Perks; Pet Insurance, Commuter Benefits, Financial Planning, and Paid Time Off.

We also asked participants what is the No. 1 benefit they are interested in that their company currently doesn’t offer, with health insurance topping the list. Other perks that employees want include Health & Fitness Perks (11%); Stock Options (9%); Tuition Reimbursement (5%) and Pet Insurance (5%).

• 33% of respondents said a student loan repayment package would help them decide whether to take a position at a new company.
• 44% of respondents said telemedicine is important to them as a benefit.
• 67% of respondents indicated mental health offerings are important as a benefit.
• 30% of employees are offering Election Day as a PAID day off.

Open enrollment: ‘confusing,’ ‘tedious,’ “‘time-consuming’

This may come to no surprise: Almost half (45%) of respondents said they DO NOT enjoy the open enrollment process.

Two out of 5 (38%) of respondents said they get frustrated when choosing a health, dental, vision plan. The top reasons?

• 62% said it’s confusing to understand the plan features
• 45% said it’s time-consuming to through each plan
• 29% said the options are too expensive
• 26% said the options are limited
• 25% said my employer doesn’t present the information in a clear way

Here’s what some participants had to say:

• “It’s often confusing, and you’re having to make potentially high stakes decisions with limited or slow-coming information from insurance companies”
• “It is tiresome to go and read something new and not being sure if it’s better or worse than my current plan”
• “We usually have little time to decide and are often left in the dark about impact on costs”
• “Limited choices. Price ALWAYS goes up”
• “It is a tedious task. I know it comes every year, it doesn’t take that long to do, but it is just a task in a ‘To Do’ list”

COVID-19’s impacts on benefits

In light of the global pandemic, almost a third (31%) of employers have added benefits or perks because of COVID-19.

A quarter (26%) of respondents indicated that COVID-19 has made them re-think their current benefit package.

Here’s what some participants had to say:

• I do want to make sure my insurance covers tests, medical care, and a vaccination in the future
• Now more than ever I feel I need insurance
• COVID-19 has really affected me financially, so I prefer a package that is less expensive
• To have more life insurance, so my family is taken care of if needed
• Hearing stories of expensive medical bills have made me question whether my plan is good enough. What if I get sick and my bill is too much? It’s such a scary thought that I’m just left feeling overwhelmed and like I have no backup even with insurance.
• With uncertainty of the economy, I can make changes to my retirement

With more people looking to avoid going in-person to the doctor’s office, 44% of respondents said telemedicine is important to them as a benefit. 67% of respondents said mental health offerings are important as a benefit.

Almost a third (31%) of employers have added benefits or perks because of COVID-19, the top being:

• Telemedicine
• Work from home stipend
• Well-being apps
• Extra PTO
• Online fitness classes
• Virtual learning

Just 18% of employers reduced benefits/perks due to COVID-19. The benefits that were reduced include:

• Health insurance (51%)
• 401k or retirement contributions (36%)
• Medical and dental benefits (35%)
• Reduced paid time off (26%)
• Gym memberships (21%)
• Commuter benefits (17%)
• Tuition reimbursement (10%)
• Career development (10%)

74% of respondents said their employer has NOT indicated there will be delayed compensation for 2021 due to COVID-19, but 18% of respondents indicated that there will be.

Methodology and limitations

We surveyed 1,109 people via SurveyGizmo from September 24 to 29, 2020, about employee benefits. The participants are full-time, W2 employees of small- to medium-sized businesses, defined as companies with 1 to 499 employees. The respondents receive health, dental, or vision insurance through their employer.

Of all the surveyed participants, 57% identified as female and 43% identified as male. Respondents ranged in age from 17 to 74.

The main limitation of the study is its reliance on self-reported data. Issues with self-reported responses include, but aren’t limited to, exaggeration, selective memory, telescoping, attribution, and recency bias.

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