Trends in Employee Benefits: A Snapshot Around the World

Persistent but slowing inflation and a tight job market are cause for concern among employees, but impactful and focused workplace benefits can play a role in employee engagement and retention. Here are some of the trends in benefits around the world, focused on everything from salaries to family care, well-being, transit, and more. 

Persistent but slowing inflation and a tight job market portend modest pay bumps and a continued focus on employee benefits as companies seek to attract and retain talent. A Bank of America (BofA) survey of more than 1,300 employees and nearly 800 employers during the first half 2023 found that the impact of inflation and economic uncertainty contributed to increased financial stress, resulting in financial wellness among employees hitting 42%, the lowest rate since BofA research began in 2010. About 67% of employees said they believe the cost of living is outpacing growth in their salary or wages, compared with 58% in February 2022. 

Impactful and focused workplace benefits can help alleviate some of these concerns. Here, we take a look at some of the trends in benefits around the world, focused on everything from salaries to family care, well-being, transit, and more. 

Salary and Promotional Trends for 2024

U.S. employers are planning an overall average salary increase of 4% in 2024, according to the latest Salary Budget Planning Survey by Willis Towers Watson (WTW), released in December. While down from the actual average increase of 4.4% in 2023, the increase is higher than the 3.1% salary increase budget of 2021 and years prior. 

Mercer’s U.S. Compensation Planning Survey, also released in early December, estimated an average salary hike of 3.8% in 2024 and an average merit boost of 3.5%. The survey also found that employers on average are planning to promote a little less than 10% of their workforce in 2024. On average, employees can expect to see a 9.2% pay increase for a one-level promotion.

There is some evidence that benefits access has started to erode, a trend that could accelerate in 2024. Glassdoor benefits data suggest that the shares of U.S. employees with access to 401(k) retirement plans, dental insurance, tuition assistance, commuter assistance, gym memberships, and mobile phone discounts has declined. There are also some benefits that continued to rise in 2024, such as fertility assistance, adoption assistance, parental leave, and mental health care.

Where Families Fit in the Benefits Picture 

A survey from Care.com shows that more than half of U.S. employers are prioritizing benefits that help their employers balance and pay for the demands of family and work. The survey found that 56% of companies said that child care benefits are their most important issue in 2024, up from 46% last year, beating out paid family leave and mental health benefits. 

While this is promising, gaps still exist in this arena. A survey last year by Mercer found that 54% of employers with at least 500 employees do not offer any child care benefits. Among those that do, less than a third selected any single benefit such as subsidized childcare services (11%), childcare referrals and consultations (28%), and backup childcare (26%). Among employers with 5,000 or more employees, 37% offer access to backup childcare, 16% subsidize childcare, and 10% provide on-site childcare.

The Importance of Well-Being in Asia

Out of 5,200 employees surveyed across Asia as part of Mercer’s Health on Demand 2023 study, about 71% felt that their employer cares about their health and well-being, but just 64% said the benefits they receive met their needs. 

The study noted a significant difference in employee sentiment based on the benefits their employer provides. Those who were offered more than 10 benefits from their employers were more likely to stay with their current employer and feel their health and well-being is cared for.

Benefits Help Defray the Cost of Getting to the Office in Europe

In Europe, some nations have started to introduce policies that support the implementation of transit budgets. In Germany, for example, many companies offer their employees the Deutschlandticket job ticket, a subscription-based public transport ticket for all local public transit, valid throughout Germany. More than half of the large companies in Germany offer their employees the Deutschlandticket subscription as a discounted job ticket, a recent survey by Greenpeace found.

The French government, meanwhile, introduced the sustainable transit package, Forfait Mobilités Durables, in 2020 to encourage daily commuting. As part of the package, employers may compensate employees as much as €700 per year for personal transport costs between home and work. The package is available to all employees, including those working part time meeting specific requirements for work duration. The package can also be used in conjunction with other mobility support schemes, such as public transportation subscriptions, up to a combined reimbursement limit of €800.

Benefits and the Bottom Line

Surprisingly, WTW’s latest annual Priorities for Employee Benefits: A Global HQ Perspective survey of over 250 multinationals, completed in September 2023, found that just 28% of organizations are focused on flexibility/choice and 27% align benefit programs with what employees want. This signals an area of opportunity for organizations to make benefits a top priority. Companies must understand what employees need and value, eliminate underused and less relevant benefits, and focus on improving well-being without wasting resources. Concentrated efforts in this area will lead to greater workforce morale and increased employee retention, ultimately benefiting business’ bottom lines and the role mobility can play in assisting those employees.