By Kathryn Mayer
June 12, 2023 - SHRM
Significant strides have been made in parental leave and family leave benefits programs over the past year, signaling that employers are getting serious about supporting employees in their home lives as well as their work lives, according to the 2023 SHRM Employee Benefits Survey.
Paid maternity and paternity leave each saw 5-percentage-point jumps from last year and are now offered by 40 percent and 32 percent of employers, respectively, the new report finds. SHRM Research's survey of 4,217 HR professionals at organizations across all sizes, industries and sectors was conducted from Jan. 17 to March 8, 2023. The findings were released June 12 at the SHRM Annual Conference & Expo 2023 in Las Vegas.
Simultaneously, paid parental leave is now offered by roughly 4 in 10 employers (39 percent), a 6-point jump from last year, according to this year's survey. Paid adoption leave also jumped by 6 percentage points, with about a third of employers (34 percent) now offering it, and paid foster child leave is now offered by 25 percent of employers, representing a 3-percentage-point increase.
"Paid leave for new parents increased across the board," said Daniel Stunes, manager of research operations with SHRM Research.
That's likely because benefits are "all about family this year," added SHRM researcher Cal Engstrom. "Prior to the pandemic, a lot of benefits had been about focusing on individuals. But when COVID-19 hit, a lot of employers started to think about benefits that help not just their employees, but their loved ones as well."
SHRM's survey results come as several organizations have recently enhanced parental leave benefits. In April, media company Thomson Reuters, a global firm with 26,000 employees, announced a 16-week paid parental leave program. The global benefit grants eligible employees who are welcoming a new child into their family through birth or adoption at least 16 weeks of paid time off, regardless of the employee's gender, sexual orientation or marital status. In addition, consumer health care company Haleon in January implemented a 26-week paid parental leave policy for all employees, while last month, global law firm Clyde & Co. rolled out a new parental leave policy, offering employees who have been with the firm for one year 26 weeks of paid leave to bond with a new child.
There are likely several reasons behind the uptick, including rising employee expectations and calls for family leave and flexible time as a result of the pandemic.
In fact, a survey released by insurance provider Unum in December found that paid family leave was among the top three noninsurance benefits U.S. workers most want. Another survey released by online insurance broker Breeze in November found that workers would rather their employer offer paid parental leave than an array of other benefits, including employer-paid fitness or mental health benefits, vision insurance, or student loan repayment assistance.
Paid parental leave is "one of the benefits that, when you need it, it's really, really valuable," Stunes said. "And for employers, it's not super-expensive to the organization, and it's not like everyone's having a baby at the same time. While it can sometimes be difficult for teams to cover someone who goes out on parental leave, it's a one-off thing, and it's so beneficial to the parents."
It's also possible that SHRM's 2022 survey results about parental leave - which found that leave for new parents was closer to pre-pandemic levels after all types of parental leave reached a pinnacle in 2020 - made some HR and benefits leaders do some soul-searching and decide to step up their efforts, Stunes said. Last year's survey found that the number of organizations offering paid maternity leave was 35 percent in 2022, down from 53 percent in 2020. The number offering paid paternity leave was 27 percent, down from 44 percent.
Outside of parental benefits, other types of family benefits are growing as well. Paid family leave so employees can care for an immediate family member became slightly more common, with one-third of employers (33 percent) now offering it. Meanwhile, nearly 2 in 10 employers (18 percent) provide paid leave to care for extended family.
Similarly, pet insurance is a growing employee benefit, SHRM's benefits survey found. Nearly 1 in 5 employers (19 percent) now offer it, up from 14 percent in 2022.
"People are considering pet health insurance to be very important," Stunes said, noting that the pandemic spurred a rise in pet adoption, which likely inspired employers to add the benefit. "It is about family - and pets are family. People are recognizing that more and more."
Most Important Benefits
While family and parental leave benefits are becoming more prevalent, employers continue to view health care as the most vital benefit offering, according to this year's survey. Eighty-nine percent of HR leaders said it was "very important" or "extremely important," with virtually all employers (98 percent) offering health coverage to their employees.
What kind of health care coverage are employers offering? Preferred provider organization (PPO) plans remain the most common type offered (by 82 percent of employers), but high-deductible health plans (HDHPs) linked to a health savings account (HSA), health reimbursement arrangement (HRA) or flexible spending account (FSA) continue to gain popularity: 64 percent of employers offer such a plan, up from 61 percent in 2022. Meanwhile, of the 60 percent of employers that offer an HSA as part of their HDHP, 63 percent contribute to their employees' accounts.
Group HRAs are trending downward, from 20 percent in 2019 to 15 percent in 2023, as are medical FSAs, which declined slightly for the second year in a row, to 62 percent.
Tied for the second-most important benefit were leave and retirement savings and planning- 81 percent of HR leaders said those benefits were "very important" or "extremely important." In general, the retirement landscape has changed little since 2022, the survey found, with the vast majority of organizations (94 percent) continuing to offer a traditional pretax defined contribution plan, such as a 401(k), 403(b) or 457(b). Of these employers, 84 percent provide a matching contribution, with an average maximum percentage salary match of 7.02 percent.
Post-tax Roth retirement options continue to grow in popularity, jumping 3 percentage points to 71 percent this year. Of the employers that offer Roth plans, about 3 in 4 (74 percent) also provide employer matching, with an average maximum percentage salary match of 6.69 percent.
Flexible work arrangements are also one of the top benefits offered by employers, the survey found and for good reason. The pandemic spurred widespread adoption of flexible and remote work options, and it seems the majority of employers aren't turning back. Seventy percent of employers said flexible work is very or extremely important - the same percentage as in 2022. Although that's lower than in the thick of the pandemic - 83 percent of employers said it was very or extremely important in 2020/2021 - it's a significant increase from before the pandemic, when just 49 percent of employers cited the benefit's importance.
Other Benefits Changes
Also new this year? Perhaps in response to the Supreme Court's reversal of Roe v. Wade last year, 11 percent of employers said they are reimbursing employees for domestic travel expenses related to seeking medical care, and 6 percent are doing so for international travel, according to the survey.
Coverage for weight loss surgery increased by 3 percentage points and is now offered by 28 percent of employers. Meanwhile, coverage for weight loss programs was up only slightly, at 20 percent, down from a five-year peak of 29 percent in 2019.
Financial benefits, awards and bonuses are also in demand this year - likely a result of the financial stress employees are experiencing due to sky-high inflation, coupled with employers making moves to woo and keep workers in an employee-driven job market.
Nearly a quarter of employers (23 percent) said they offer retention bonuses - up from 15 percent in 2019, the last time this benefit appeared on the SHRM survey. And nearly 6 in 10 employers (59 percent) currently offer referral bonuses, up from 53 percent in 2019.
Though still not at pre-pandemic levels, the prevalence of nonretirement financial advice benefits rebounded notably this year. Nearly one in three employers (31 percent) currently offer online or in-person services - an increase of 10 percentage points from 2022.
As the job market continues to be employee-driven, Stunes says employers are realizing that innovative and generous benefits are a good way to attract and retain talent.
"I think companies are really looking for those benefits that are above and beyond," he said. "You expect health care, you expect some kind of leave, but then you see other benefits - maybe pet health insurance, maybe bonuses - and that is what is setting employers apart."
