There have been five additional pandemics recorded since the Spanish Flu infected 500 million people worldwide in 1918-1920. Even so, the SARS-CoV-2 coronavirus caught the world’s population off-guard. Americans in particular were unprepared for the immense impact that COVID-19 would have on their lives, their families, and their livelihoods.
The pandemic caused dramatic changes to the American way of life. Many of these changes continue to have far-reaching effects on our living standards and some of them likely will become permanent. One change that falls into the latter category is how the average American worker perceives the role of work and work-related benefits in their everyday lives.
This whitepaper reviews ways in which the pandemic has changed how we live and work, explores changing employee attitudes, and recommends steps employers need to take to adapt to the new American workplace.
Our National Emergency
The U.S. declared a COVID-19 national emergency on March 13, 2020. Since then:
- More than 83 million Americans have caught the virus and more than 1 million have died from it (out of 524 million infections and 6.25 million deaths worldwide).
- As of May 2022, over 221 million Americans are “fully vaccinated” against COVID-19 (have received two doses). About 103 million have also received the first booster and 13 million have received a second booster.
- In April 2020, the unemployment rate reached 14.8% – the highest ever recorded since data collection began in 1948. By April 2022, the unemployment rate had returned to pre-pandemic levels (3.6%).
- At the end of the 2020-2021 school year, the average K-12 student was 5 months behind in math and 4 months behind in reading.
- Standardized test scores during the 2020-2021 school year fell by an average of 14.2% from pre-pandemic levels in math and by an average of 6.2% in English, with the gap substantially more pronounced among students who had stayed home for the whole school year versus spending part of the year in a regular classroom.
- As of December 2021, an estimated 99% of K-12 students were once again learning in person. However, 88% of school staff expressed concern in March 2022 over being able to help their students reach normal academic standards by the end of the 2021-2022 school year.
- Since the pandemic began, one in four American women has considered leaving the workforce entirely, or at least downshifting their careers to care for children and family members.
- More than 40% of adults reported symptoms of anxiety or depressive disorder during the pandemic, compared to 1 in 10 prior to the pandemic.
- The U.S. experienced an alarming rise in the number of murders and fatal drug overdoses during the height of the pandemic in 2020 and 2021.
From Pandemic to Endemic
Some form of normalcy will eventually return, but COVID is here to stay. Pandemic diseases usually do not disappear, especially in countries with open borders. Instead, they eventually reduce to “endemic” status – a constant presence that spreads at predictable rates and can be managed within communities.
There is no set threshold for defining when a pandemic has evolved to endemic status. As time goes on, the focus of public health authorities will shift. Instead of concentrating on preventing transmission, they will work to reduce the ratio of severe illness and decrease the likelihood that health care systems will become overwhelmed.
Influenza is a former pandemic that remains with us in endemic status. Millions of Americans come down with the flu each year, and hundreds of thousands of them require hospitalization. Ultimately, tens of thousands will die annually from the disease or its complications. These numbers are expected and the healthcare system is prepared to handle them.
Impact on the American Way of Life
The pandemic has impacted the American way of life on both personal and professional levels. Once the pandemic ends, we will not return to the “old normal,” but rather a “different normal.” The pandemic has impacted how we live, where we work, how we work, when we work, and what we want out of work.
How We Live
More than any other issue, people responding to Pew Research surveys in 2020 brought up how much their ability to engage with family and friends had changed. About 40% reported missing family and friends, being worried over losing touch, having feelings of isolation, experiencing newly crowded living situations, suffering strained relationships, and grieving for loved ones who had succumbed to the virus. About one-third mentioned positive occurrences, such as being able to spend more time with family since none of them had to spend their days away at the office or school.
Abrupt shifts to remote learning during the pandemic negatively affected students’ social, emotional, and mental well-being and academic achievement. Data collected by the U.S. Dept. of Education before and during the pandemic showed that in-person learning leads to better outcomes in student attendance, engagement, academic progress, and overall well-being.
Caregiver Burnout, Fatigue, and Anxiety
Nearly one-fifth (17%) of Americans aged 18 and older were caregivers for an older adult family member or friend during the pandemic. Parents of school-aged children faced forced homeschooling and needing to be home to care for children who couldn’t go to class or daycare. In comparison to non-parents, parents during the pandemic were more likely to lose their job or otherwise stop working (14% to 9%), face a worsened financial situation (39% to 28%), perceive a high COVID-19 threat (35% to 30%), actually get COVID (11% to 5%), and report feeling stressed, anxious and depressed most of the time (18% to 10%).
In times of intense and chronic stress (physical, mental, or both), such as from being a caregiver, burnout is a common result. Burnout affects how a person works, their relationships with others, their physical health, and emotional well-being. Symptoms include compassion fatigue, exhaustion, reduced sense of competence and purpose, sleep problems, depression, and increased use of alcohol and other drugs in an effort to cope.
Where We Work
Before the pandemic, only 6% of American employees worked primarily from home, and three out of every four had never worked from home. By October 2020, 71% of those whose jobs could be done remotely were working from home.
Perhaps even more telling of the permanent impact the pandemic has had on where we work, nearly 41 million American professionals said in July 2021 that they expect to be working fully remote within five years, an increase of about 20 percent in less than a year.
Although many managers feared that productivity would fall, pandemic-era surveys have shown otherwise. One in three (32%) supervisors said their employees had actually become more productive since working from home, and 45% reported productivity as being about the same as it had been in the office.
As a result of the success of remote working during the pandemic, 53% of businesses say that their willingness to use freelancers has increased, especially in technical job categories such as web and software development.
Of course, not all jobs are conducive to remote working. Industries finding the most success with remote work include:
Industries for which remote work is not very feasible include:
How We Work
To stay connected with supervisors and coworkers, 81% of Americans used video calling and teleconferencing during the pandemic. For many, the office became entirely digital.
More than half (58%) of U.S. adults were describing the internet as essential for their work use, personal use, or both by April 2021.
Workers from all generations and backgrounds embraced new technology, many for the first time. Their yearning to maintain flexibility and convenience will fuel greater reliance on digital tools in coming years.
When We Work
During the pandemic, the traditional workday evolved, with many employees creating their own schedules. In the Slack Future Forum Pulse survey, 78% of knowledge workers said they want location flexibility (remote working options), but a whopping 95% expressed a desire to maintain schedule flexibility.
More than half (54%) of 16,000 respondents surveyed by Ernst & Young in 2021 said they would consider leaving their job if not provided some form of flexibility in where and when they work.
Interestingly, employees who have the freedom to arrange their own work schedules tend to work more than 40 hours a week.
What We Want Out of Work
The Great Resignation, also known as the Great Reshuffling, has seen record numbers of employees quitting their jobs every month since April 2020. Rather than abating, the number continues setting new records each month, including 4.5 million workers in April 2022.
Among those voluntarily leaving their jobs in 2021:
According to PricewaterhouseCooper (PwC), employers will have to adapt to this reality and focus on:
- Talent – rebuilding their culture to retain employees
- Trust – building trust between management and employees
- Transition – embracing technology to manage costs and offset inflation
- Transactions – engaging in M&A, capital creation, funding other investments, etc.
The Value Perception of Benefits Has Changed
Pre-pandemic, the American economy was growing, unemployment was low, and socio-political stability was relatively secure. The abrupt disruption in all of those areas over the past two years has permanently changed how employees view their benefits.
Intense Competition for Employees
Before the pandemic, to attract workers in a tight labor market, many employers offered standard benefits along with “cool” perks such as rock-climbing walls, ping-pong tables, baristas, etc.
But as BenefitsPro observed in 2016, “…employees aren’t dumb.” Workers once enjoyed these “cool” perks, but they lost their appeal and value once the pandemic struck.
Employees now want benefits that protect their security and well-being. With rising inflation, economic contraction, and stagnant wage growth, workers are interested in benefits that promote their physical, mental, emotional, and financial health.
Physical Healthcare Highly Valued
The pandemic highlighted the need for quality healthcare benefits. Many people were hit with unexpected virus-related medical expenses. Employees now value benefits that contribute to their physical well-being more than ever. Rising healthcare costs are another major concern, causing delayed medical care, lower contributions to HSAs and retirement accounts, reduced savings, and increased credit card debt.
Quality healthcare coverage ranks as the top benefit desired by workers, just behind salary and income. This applies even to younger workers, who have historically valued healthcare benefits less than older adults.
Mental Health Now as Important
The pandemic has increased the desire for mental health and well-being benefits. During the pandemic, calls to disaster distress helplines increased by 1000%. Also increasing were suicide attempts, domestic violence, child abuse, and opioid overdoses resulting in death.
Half of employees think mental health wellness programs are now more important than before. Twenty percent say that more assistance with mental health and emotional well-being would be the most valuable improvement to their benefits program.
Telehealth Affordable and Convenient
Telehealth has emerged as a cost-effective and convenient avenue for physical and mental health. When many medical offices closed during the pandemic, telehealth offered options for some essential medical care and mental health services, including relationship issues, substance abuse counseling, suicide prevention, etc.
The usage of telehealth has soared to 38 times what it was prior the pandemic. The highest penetrated medical services are psychiatry at 50% and substance abuse at 30%.
Investment in telehealth ventures has tripled since 2017. Due to its rapid adoption, telehealth has become widely accepted and is here to stay.
Financial Health is Entering the Spotlight
Rising inflation and stagnant wages have significantly reduced employee purchasing power. It’s no longer “buy more, pay less” … it’s “pay more, buy less.” Debt will grow faster because employees have less cash to pay it down with.
To quote Alexa Nerdrum, managing director and head of sales and marketing for benefits, advisory, and compliance for Willis Towers Watson:
“ Employer interest in helping employees address both their short-and long-term financial concerns has never been greater… employers are refreshing their defined contribution plans to give employees both the opportunity to save more for retirement and the flexibility to use both their personal and employer contributions in innovative ways to manage their financial needs.”
Benefits Need to Focus on Overall Well-Being
Employees have grown most concerned about their overall well-being and expect employers to help. In a 2021 study
on how employers should rethink their responsibilities towards employees, MetLife found:
- Employees want employers to help protect their holistic well-being so that they can feel safe, protected, and prepared across a range of areas.
- More than half of workers are worried about their overall well-being, and it notably impacts their productivity.
- Employers need to embrace flexibility in the workplace because employees now expect a degree of flexibility regarding when they work, where they work, etc.
Strategies TPAs and Brokers Can Recommend
Promote Physical Well-Being
Health Savings Account (HSA) – Employers have been keeping costs down by adopting HDHPs. It’s time to help employees by seeding HSAs to help offset their out-of-pocket costs.
Health Reimbursement Arrangement (HRA) – Small employers who have not had a group health plan in the past should consider offering an ICHRA or QSEHRA to help employees address healthcare needs.
Flexible Spending Account (FSA) – More than 30% of employers still do not offer any kind of FSA. To help care for the well-being of employees, eligible employers should offer an FSA (or at least and excepted benefit FSA).
Lifestyle Spending Account (LSA) – An LSA can help employees’ physical well-being through programs such as gym memberships, fitness equipment, weight loss programs, etc.
Nurture Mental Well-Being
Flexible Spending Account / Health Savings Account (FSA/HSA) – Employers should educate and encourage employees to use FSA or HSA funds for services such as therapy, prescription medications and substance abuse treatment programs.
Health Reimbursement Arrangement (HRA) – If an employer offers an HRA, then they should make sure that it includes mental health provisions within the program.
Lifestyle Spending Account (LSA) – An LSA can help employees’ mental well-being by covering services such as marital counseling, meditation classes, life coaching, etc.
Encourage Financial Well-Being
Health Savings Account (HSA) – Educate employees about the investment and tax-savings features of HSAs to help them invest in their future financial well-being.
Student Loan Reimbursement Account (SLRA) – Many employees are burdened by student loan debt. Employers can help by sponsoring an SLRA to help employees pay off the debt faster.
Lifestyle Spending Account (LSA) – An LSA can help employees’ financial well-being by covering financial and estate planning services, budgeting classes, etc.
Emergency Savings Account (ESA) – Employers may consider sponsoring and ESA to help employees build back savings depleted during the pandemic.
Change is the only constant coming out of the COVID-19 pandemic. In a time of great instability, workers are seeking stability wherever and however they can find it. Where benefits were once signs of immediate satisfaction and even prestige, more people are getting back to basics and looking to their employers for support for their physical health, mental health, and financial well-being. Employers have a responsibility to support and value the employees who drive their success.
TPAs and brokers have never been more important to the process than they are right now. With the creative application of existing benefits programs, tools, and resources, they have a tremendous opportunity to enhance relationships with their employer groups and make an even greater difference in the lives of employee participants.
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2 Our World in Data, last accessed May 24, 2022.
3 Centers for Disease Control (CDC), last accessed May 24, 2022.
4 Congressional Research Service, August 2021.
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6 McKinsey, July 2021.
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8 U.S. News and World Report, December 2021.
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11 Kaiser Family Foundation, last accessed May 24, 2022.
12 Pew Research Center, October 2021.
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22 Upwork, 2021 Future Workforce Pulse Report, July 2021.
23 Upwork, 2020 Future Workforce Pulse Report, October 2020.
24 Upwork, July 2021.
25 Pew Research Center, September 2021.
26 Pew Research, September 2021.
27 Slack, Future Forum Pulse Survey, January 2022.
28 Ernst & Young, EY 2021 Work Reimagined Employee Survey, May 2021.
29 Fortune Magazine, “Say Goodbye to 9-to-5,” March 2022.
30 U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Summary, May 2022.
31 Pew Research, March 2022.
32 Employee Benefits Research Institute (EBRI), 2021 Workplace Wellness Survey, January 2022.
33 EBRI, January 2022.
34 McKinsey & Company, “Patients Love Telehealth,” February 2022
About the Company:
Founded in 1984, DataPath, Inc. is an administrative solutions and business process outsourcing provider for tax-advantaged healthcare benefit plans including FSAs, DCAP, HRAs, ICHRAs, EBHRAs, QSEHRAs, HSAs, LSAs, COBRA and other employer-sponsored benefits. The company also created the award-winning employee education and engagement program, The Adventures of Captain Contributor.TM
Learn more at dpath.com or call (800) 633-3841.