Study Shows How COVID-19 Will Affect Employee Benefits in 2021

Guest Writer: Pat Wilkins, Vice President, Community Relations, Gallagher
Insurance | Risk Management | Consulting

For nearly a decade employers consistently increased employee benefits and compensation to win the war for talent, but a new study from Gallagher suggests 2021 benefits and the open-enrollment period will be unlike any other.

Gallagher’s annual Benefits Strategy & Benchmarking Survey gathered data from 3,921 employers from December 2019 to May 2020, as well as a series of employer pulse surveys between April and July 2020.

Together, the data from these reports provides an in-depth overview of the effect the pandemic has had on hiring as well as employee benefits and compensation.

Key findings include:

  • Salary freezes become the norm: To save jobs in 2021, a significant number of employers plan salary freezes for management and executives (43 percent) and non-management (42 percent).
  • Work-from-home is here to stay: While work-from-home arrangements began as a forced experiment, nearly 9 of 10 employers (86 percent) say work-from-home options will continue after the pandemic, and 59 percent saying flex scheduling options will remain.
  • Unlimited PTO may help cut costs: In July 43 percent of employers had modified or were in the process of evaluating their paid-time-off (PTO) policy, and continued modifications are likely in 2021. Adding an Unlimited PTO plan can curb employees’ inclination to use all their allotted days each year, as well as eliminate the employer’s need to cash out any balance remaining within the PTO period or upon retirement.
  • Few organizations expect to reduce benefits but employees may have to shoulder a greater portion of health insurance costs: Nearly 8 of 10 employers (79 percent) expect to keep the same level of health coverage in 2021 but financial pressures may force increases in employees’ cost share (e.g., premium contributions, deductibles, etc.) to keep the same level of coverage.

Gallagher experts in the Triangle are available to discuss why and how employers are pivoting from talent attraction and retention to business continuity, safety and compliance.

Reach out to Gallagher today for further discussion or Download the executive summary for more insights.



  1. Robert S.'s avatar
    Robert S.
    | Permalink
    I definitely agree that work-from-home is going to become the norm, even after this pandemic has subsided. There are just so many unique benefits that a traditional office environment lacks, though I'm sure preferences vary across the board.
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