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How Has Pandemic Affected Employee Benefits in the UK and US?

The coronavirus outbreak has led to some major transformations in all areas of the workplace. In particular, the pandemic had a major impact on employee benefits with two- fifths (42%) of the companies planning to make changes to their benefit programmes. Recent data suggest that supporting employees by enhancing health care, wellbeing and paid leave programs are leading priorities.

Planning employee benefits for 2021 presents HR with unique challenges, given that the outlook for the COVID-19 pandemic is still unknown. In the future, meeting employee needs will mean moving past the traditional plan design into building a benefits strategy tailored to a more remote and dispersed workforce. While many companies saw the remote work necessitated by social distancing as a temporary solution, others have made it permanent.

We have put together a comprehensive guide of the essential and optional employee benefits based on the internal data and wider market research. We have also included some useful sources at the end for further information. Below are presented the main highlights of the key employee benefits changes as a result of the pandemic.


Flexibility, staying connected and support programmes

  • Working from home: To address anxiety and loneliness, 85% of employers have increased video conferencing for work and non-work purposes, and 73% offer flexible work hours allowing employees to manage work and home challenges.
  • Financial counseling: 63% focus on promoting existing counseling resources (defined contribution vendor, investment advisor, independent counselor) to support financial wellbeing.

Focus on emotional wellbeing

  • Virtual solutions: 60% of employers offer new virtual solutions that are easy to implement to support the mental health and wellbeing of employees working from home (e.g., virtual workouts, virtual social gatherings).
  • Manager training: Over half of employers (51%) provide or are planning to provide manager training on recognizing signs of anxiety and/or depression, and how to refer to resources such as employee assistance programs.


  • Employers expect health care, sick leave and disability costs to rise over the next year due to COVID-19.
  • Employers are focusing on promoting virtual medical care by raising awareness and reducing point-of-care costs.
  • Over 80% have or are planning to offer/expand access to virtual mental health services.
  • About two in five employers are planning to revise their 2021 health care strategy.
  • Nearly two-thirds (66%) of companies will prioritize access to high-quality mental health solutions in their 2021 health care program.

Retirement Plans 

  • 12% have taken actions to suspend or reduce matching or nonelective contributions to the defined contribution plan with another 24% planning or considering.
  • At the same time, employers are adopting changes allowed by the CARES Act to provide employees with financial challenges the flexibility to access retirement assets.
  • Struggling businesses are much more likely to take cost-cutting actions related to retirement benefits; to date, much of this activity is concentrated in a few industries.
  • Nearly 20% of distressed companies are considering reducing or eliminating retiree medical subsidy.

Paid Leave

  • 42% have made or plan to make changes to paid time off or vacation/sick leave programs to boost flexibility.
  • More than half of employers take actions to address the anticipated surplus of banked hours at years end.
  • Other priorities include enhancing flexibility in their program design by allowing negative balances and increasing accruals.

Further Reading:

What Are The Required Employee Benefits For U.S. Businesses? https://www.thebalancecareers.com/required-vs-non-required-employee-benefits-for-us-businesses-4117334

Two-In-Five UK Companies Are Changing Their Employee Benefit Programmes Due To COVID-19 https://www.willistowerswatson.com/en-GB/News/2020/05/two-in-five-uk-companies-are-changing-their-employee-benefit-programmes-due-to-covid-19

Planning 2021 Benefits Changes For The COVID-19 Era https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/planning-2021-benefits-changes-for-the-covid-19-era.aspx

Employee Benefits: An Introduction https://www.cipd.co.uk/knowledge/fundamentals/people/benefits/factsheet

Strategies To Adapt Employee Benefits To A COVID-19 World https://www.benefitnews.com/opinion/strategies-to-adapt-employee-benefits-to-a-covid-19-world

US and UK Employee Benefits Comparison https://www.fitzandlaw.com/news/fandl-news/archive/article/2019/December/us-and-uk-employee-benefits-comparison

Should you wish to find out further information about any of the guidelines or statistics referenced in this guide, please feel free to give us a call on +44 203 637 3331 / +1 628 239 3600 or drop us an email on [email protected].