To the extent that retirement plan investors anticipated change and volatility in 2022, the past year delivered, Alexa Nerdrum, managing director, benefits, advisory and compliance at WTW North America, said at a virtual event.

Employees have faced considerable financial challenges, from rising interest rates to record inflation. An Allianz Life survey of U.S. adults found that more than half said they had stopped or reduced retirement savings due to inflation — including 40% of baby boomers surveyed. Separately, a Q3 2022 Fidelity survey found that nearly 41% of retirement plan participants saved less in Q3 than they did in the previous three months.

“We’ve seen some forces that we haven’t seen in a while,” Fred Lamm, global client acumen director at WTW, said of the trio of inflation, recessionary fears and workforce pressures affecting employer-sponsored retirement plans.

Those trends are impacting employers, too, most notably in the form of increased compensation, benefits and total rewards costs, he added. Employers are also dealing with increased turnover, and it is typically more expensive to hire new talent than to retain existing talent.

“You put all that together and everything’s sort of moving in the wrong direction from a near-term cost perspective,” Lamm said.

Understand the situation

Whichever path employers choose as they reassess their retirement plans in 2023, Lamm said that the biggest thing he’s seen employers do is try to have an understanding of their plan design and makeup. He gave the example of one client that has seen funding projections vary significantly between June and November.

If that kind of near-term volatility is an issue, “It’s smart to understand what your risk exposure is and the range of possible outcomes, because it could move pretty quickly,” Lamm said.

Employers also may need to consider factors such as near-term cash availability and how their plans are funded, among other factors. For those operating a defined contribution plan, like a 401(k) plan, Lamm said the primary focus has been on monitoring the long-term situation so long as employers have the resources to do so.

But other employers have started to talk “very seriously” about terminating their plans, Lamm said, particularly if they had previously planned to do so in the near future; “Four or five years ago it was, ‘We’re going to terminate the plan someday when it makes sense to do that.’ Now that the check I may have to write is a whole lot smaller than it used to be, four or five years from now is starting to look like soon.”

Lamm added that the current moment presents an opportunity for employers to ask tactical questions regardless of their long-term view of their plans. For example, they can consider changing how much they invest into the plan, whether to change certain investments or whether they can reduce the size of the plan.

‘Be nimble’

Organizations will need to “be nimble” and make the most of limited resources over the coming months given that the financial environment is expected to be turbulent for the foreseeable future, Lamm said. That could take the form of outsourcing certain aspects of the retirement plan management process, conducting data cleanup or improving compliance measures.

“The financial environment is a catalyst to reassess decisions that were made a long time ago,” Lamm said.

It may be time to seek ways to differentiate plans so as to broaden their appeal to different types of workers. Lamm said employers might decide to examine how plans could meet the unique needs of front-line employees and office workers, as well as those who belong to particular demographic groups. Issues such as debt, student loan payments and other financial difficulties may drive employers to think more broadly about how they can support workers.

“I think we’re seeing how employers are thinking about financial resilience much more broadly,” Lamm continued. “It’s less about retirement and more about a broad financial picture. Retirement programs are a part of that, but they’re not the entire story. I think that’s the most positive outcome that we’ve seen so far.”

In the push to keep healthcare costs down and employees healthy, large employers have identified an emerging threat: cancer.

That is one of the key findings of the Business Group on Health’s annual health benefits survey of large employers for 2022. The Washington, D.C.-based organization surveyed 135 employers representing some 18.3 million covered employees.

In all, 44% of respondents said they expected a higher prevalence of late-stage cancers in their employee populations due to delayed preventative screenings, a trend that employer-sponsored healthcare observers have long feared due to the closure of care centers caused by COVID-19.

“We have a lot of concern that this situation may actually worsen,” Brenna Shebel, vice president at BGH, said during a virtual press event announcing the survey results. Shebel noted that 13% of employers were already seeing a higher prevalence of late-stage cancer at the time of the survey. “We will have to keep an eye on this as we move through future years and [see] the overall effect of the pandemic.”

The findings come after a 2021 in which large employers’ overall health spending — already difficult to project because of COVID–19 — exceeded BGH members’ expectations. Accounting for plan design changes, BGH respondents projected average median health cost increases of 6% for 2021.

In actuality, last year saw a median increase of 8.2%. That is the highest increase BGH has recorded going back to 2017 and a complete reversal from 2020, when most members saw zero cost growth, BGH President and CEO Ellen Kelsay said.

She added that BGH attributes this jump in part to plan members catching up on chronic condition management that may have gone off course during the pandemic, along with other factors such as longer hospital stays. For 2023, BGH members project increases closer to those seen in pre-pandemic years, or about 5%.

“But a return to normalization is not a return to good,” Kelsay said. “A 5% trend is still high. These numbers continue to go up at a rate that is quite honestly unsustainable.”

Cancer topped the list of conditions driving respondents’ healthcare costs in 2021, overtaking that spot from musculoskeletal conditions. In response, half of employers said they would have centers of excellence coverage for cancer in place for 2023, while an additional 26% said they were considering doing so through 2025.

Other strategies include covering genomic testing for cancer treatments, while common incentives include reimbursement for travel and accommodations related to care. Prevention and screening also are being prioritized, with employers expanding or providing alternatives to traditional colonoscopies as well as updating their plans’ definitions of preventive screenings for breast cancer.

Some employers are focused on covering early detection blood tests within the next few years, Shebel said, noting that these tests tend to be less invasive while offering the potential to detect more cancers at earlier stages.

Health equity a growing priority

Most employers identified addressing healthcare inequities as a priority for their plans in 2021, at 75% of respondents compared to 70% in 2020.

Underneath this category, childcare access emerged as the top area of focus for health equity efforts, with 47% stating they had already implemented solutions for childcare this year and 6% stating that they were considering such efforts in 2023. Further out, 20% of employers are considering addressing food access and insecurity in 2024 and 2025.

A strong majority of employers, 85%, said they planned to implement at least one strategy to address women’s health and reproductive health by 2023. Employers viewed these areas as a component of their health equity efforts, Kelsay said. A BGH spokesperson told HR Dive that the survey was conducted on both sides of the U.S. Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, with some respondents completing the survey prior to the June 24 decision and others completing it afterwards.

Asked if they had implemented, or were planning to implement, programs or initiatives to improve access to abortion services, 44% of employers answered in the affirmative, while another 33% said they would consider doing so. Abortion coverage continues to be a pressing topic for organizations despite the potential logisitical and legal challenges involved.

Among employers that had made or were considering changes, 96% said they were looking to provide financial assistance to help with travel and lodging costs incurred by employees who seek to obtain reproductive care in a different state or location, the spokesperson said.

Virtual care now a mainstay, with new applications on horizon

An open question for health plans in recent years concerns whether the massive utilization growth of telehealth and virtual care options during the pandemic will continue once in-person healthcare visits resume. While BGH observed a year-over-year drop in the number of employers that said virtual health offerings would have a significant impact on how care is delivered — 74% in 2022 compared to 85% in 2021 — Shebel noted that this share is still elevated compared to 2019, when just 52% of employers said so.

“That’s much higher than before the pandemic,” Shebel said. “We know the pandemic did play a role in the growth and interest in virtual health, but it’s been building since long before that.”

More than half of respondents said virtual health opportunities were a top healthcare priority for 2023, followed closely by the expansion of mental health services at 47%.

Virtual care is primarily being used for acute and minor services, mental health, diabetes care management, health and lifestyle coaching, BGH found. Other use cases are less common, but have the potential for future growth, such as sleep management, cardiac care management, chronic kidney disease management and care for specific patient populations, such as employees of color and employees who identify as part of the LGBTQ+ community.

The latter is an area of particular interest to BGH, Shebel said; “That is going to be supportive of an employer’s health equity efforts.”

At the same time, respondents noted concerns about virtual care. Sixty-nine percent said they were concerned about siloed care experiences on virtual platforms, while 60% said they were concerned about a lack of integration between vendors.

“Employers, particularly our members, offer many different types of virtual health programming … and so the concern is that some of those offerings may not be working in concert with one another,” Shebel said.

Sponsored content

By Hinge Health

Depression and chronic musculoskeletal (MSK) pain are deeply connected and together they create a cycle that has profound impacts on the daily lives of employees.

"I've battled with depression. It's a vicious cycle of pain and stiffness and isolation." - Lenell H., chronic knee pain

Lenell, a 45-year-old County Clerk in Florida, frequently practiced Tae Kwon Do with her 2 kids, living by the mantra that a family that kicks together, sticks together. Then she injured her knee and developed chronic knee pain that made it difficult for her to stand for even 5 minutes without pain. Unable to socialize with friends and family without pain, she began to feel alone, hopeless, and desperate to resolve her pain.

Lenell's case isn't unique. One in two Americans suffer from musculoskeletal (MSK) pain and over 16 million adults in the United States have at least one major depressive episode in a given year. These two conditions account for two of the top five reasons for absenteeism. Given the high comorbidity of depression and MSK pain, employers are increasingly looking to holistic interventions to break the cycle of member's physical and emotional pain. 

The Vicious Cycle of Pain and Depression

Chronic pain and depression share neural pathways and affect the same regions of the brain. This creates a feedback loop known as the depression-pain dyad, where depression increases the severity and intensity of pain, and chronic MSK pain increases the risk for depression. Of people who live with depression, 65% also have chronic pain² and of people who have chronic pain, 27% will experience depression.¹

When someone is depressed, both the perception of pain and the emotional ability to manage the pain is disrupted. Pain also blunts the effects of anti-depression medication. 95% of patients who have depression that does not improve after 12 months of treatment have an underlying chronic pain condition. Essentially, difficult to treat depression is a chronic pain problem.

Pain and Depression Negatively Impact the Workplace

Chronic MSK pain and depression are the top reasons that employees take time off. Employees that continue working at a reduced ability are also at greater risk for job errors and work injuries, indirectly cost their employer 3 times more than those who call in sick.³ 

Healthcare costs for an average employee who seeks treatment for major depressive disorder exceed $2,000 per year⁴, while treatment for chronic pain can add $2,300⁵. The average short-term disability claim for chronic back pain costs employers about $10,000 in benefits and wage replacement, and long-term disability increases that to about $35,000.⁶

Holistically Treating Pain and Depression in Your Workforce

Health and benefit executives at leading employers recognize that comprehensive, holistic interventions are needed to achieve better clinical outcomes for the co-morbid conditions of chronic MSK pain and depression. A comprehensive approach is supported by multiple research publications. Global Spine Journal states, "cognitive behavioral therapy has been shown to be just as effective as surgery for chronic low back pain".⁷ Research from the Archives of General Psychiatry reported, "improved lower back pain at 7 weeks and 2 years were associated with significantly fewer depressive symptoms."⁸

Case Study: Reducing Pain and Depression Without Surgery or Drugs

For Lenell's employer, Manatee County Government, MSK was a top 3 medical cost driver. Medications for depression and anxiety were also in their top 10 areas of spend. Given that public sector employees tend to have long tenures, it was critical to address both chronic pain and mental health. While reducing medical spending was a priority for Manatee County, long-term employee engagement and well-being were essential.

Human Resources Director, Kim Stroud, has a background in mental health and was aware of the link between mental health and chronic MSK pain. Her team implemented an MSK care program with a holistic approach to pain care, including mental health screening, cognitive behavioral therapy, and 1-on-1 health coaches trained in motivational interviewing, behavioral change, and the Patient Activation Model.

Through a benefits program that addressed both chronic pain and behavioral health, her workforce was able to break the cycle of pain and depression. Clinical outcomes for Manatee County Government included: 73% reduction in pain (over 4X better than the average opioid pain reduction of 15%)⁹ which led to 2 out of 3 surgeries avoided, 78% reduction in anxiety, 30% reduction in depression, and 44% reduction in lost workdays. Lenell participated in the program and not only is she now pain-free, she escaped the cycle of isolation and depression that pain brought with it.

"Being able to walk without pain has given me back my freedom and happiness." - Lenell H.

By understanding the connection between mental health and chronic pain benefits leaders can help reduce employee pain, improve workplace productivity, and lower medical spend. Employers looking to address mental health and chronic MSK pain should prioritize solutions that take a comprehensive approach to treat the whole person. 

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Resources

¹Bair MJ, Robinson RL, Katon W, Kroenke K. Depression and Pain Comorbidity; A Literature Review. Arch Intern Med. 2003;163(20): 2433–2445. doi:10.1001/archinte.163.20.2433.B

²Katon W, Schulberg H. Epidemiology of depression in primary care. Gen Hosp Psychiatry. 1992;14(4):237-247.

³Stewart WF et al.; Lost Productive Time and Cost Due to Common Pain Conditions in the US Workforce. JAMA. 2003; 290(18): 2443–2454.

⁴Greenberg, PE et al.; The Economic Burden of Adults With Major Depressive Disorder in the United States (2005 and 2010). J Clin Psychiatry 2015;76(2):155–162.

⁵Integrated Benefits Institute. Health and Productivity Impact of Chronic Conditions: Back Pain. San Francisco, CA. 2017.

⁶Veronese N, Stubbs B, et al; association between lower limb osteoarthritis and incidence of depressive symptoms: data from the osteoarthritis initiative. Age Ageing 2017; 46 (3): 470–476.

⁷Hanscom DA, Brox JI, Bunnage R; Defining the Role of Cognitive Behavioral Therapy in Treating Chronic Low Back Pain: An Overview. Global Spine J. 2015 Dec; 5(6): 496–504.

⁸Von Korff M, Ormel J, Katon W, Lin EHB. Disability and Depression Among High utilizers of Health Care. A Longitudinal Analysis. Arch Gen Psychiatry. 1992 Feb;49(2):91–100.

⁹Expert Rev Neurother. 2013;13(11):1201-1220

Inspired by the biggest names in tech, retail and healthcare, many employers have rolled out reimbursements for abortion-related travel. A webinar by HR firm Mercer on Dobbs v. Jackson Women’s Health Organization ran through the mechanics of these offerings. 

Panelists answered a number of questions around access benefits, including how companies can provide abortion travel reimbursements. Even before the Dobbs fallout, insurance companies folded reproductive care and accommodations for travel into health packages, so Reimbursement is possible here, too, they said.

They also discussed employer options for abortion-access benefits. Beyond HRAs, there are wellness accounts, employee assistance programs, and hardship or support funds. Mercer experts urged employers to assess risks, rewards and compliance demands with each option.

But, in addition to the avenues available to realize these endeavors, experts explained how business leaders should be having these conversations with their employees. Katharine Marshall, health plan specialist and principal in Mercer’s Law & Policy Group, offered a compliance-centered approach to the abortion benefits conversations. Under the Employee Retirement Income Security Act and the Consolidated Omnibus Budget Reconciliation Act, employers may be required to communicate to their staff health plan changes.

Marshall’s colleague, Mercer Senior Health Consultant Rebecca Atkins, encouraged HR pros to consider the conversation through the lens of purpose. How should employers respond to the Dobbs decision in the coming months? Atkins said she thinks about this issue from a “50,000 foot view.”

“Whatever you're saying or not saying — which is a choice — just make sure that you're doing so intentionally and lead with empathy,” Atkins told her virtual audience. “Everyone is listening to what you're saying or not saying, whether those are internal stakeholders, your employees, your customers.”

In a series of recent surveys, workers emphasized their desire for a variety of wellness benefits. Eighty percent of respondents to a survey by research agency Opinium said they would feel more supported if their employer were to sponsor wellness, according to findings the firm sent to HR Dive. Generation Z and millennials showed the most interest.

Respondents showed the most interest in sponsored gym memberships, with 65% stating they would use the benefit. Fifty-six percent said they would use a monthly wellness stipend, 46% said they would participate in mindfulness sessions and 36% said they’d consider using a yoga membership. Parents showed a particular interest in programs centered around mindfulness, meditation and mental well-being.

The findings from Opinium are reflected in surveys recently conducted by two companies that focus on wellness, Gympass and Calm. Gympass’ survey of almost 9,000 workers found that well-being benefits may be a retention strategy, with 85% of respondents reporting they’d be more likely to stay in their role if their company focused more on well-being. And Calm, according to results sent to HR Dive, found that the need for well-being benefits is especially acute among families and LGBTQ, Hispanic and neurodivergent employees.  

Employee well-being has been a top focus for benefits professionals since shortly after the pandemic began. Not only has it been a strategy for retention, as Gympass found, but it has also been used to attract new talent — especially in the wake of the Great Resignation. Last summer, 80% of employees responding to an American Psychological Association survey said an employer’s approach to mental health would be “an important consideration” when job hunting, showing they were on the lookout for a thoughtful strategy.

Executing on effective wellness benefits has been more complicated. More than a year ago, about half of employers responding to a WTW survey told the agency they didn’t have a formally articulated well-being strategy, responding instead to different issues — such as behavioral health and financial well-being — at different paces. A WTW spokesperson at the time highlighted the common strategy of using financial rewards to encourage certain behaviors, noting that this often fails to move the needle.

Yet another survey backed that statement up; 42% of workers with access to mental health benefits said they had not used them, with those who were nonetheless interested saying they didn’t know how to access them, or that they were worried about confidentiality or cost. 

Workers may want wellness benefits — and employers may provide them — but part of the equation, experts have emphasized, is designing workplace culture and the workday to provide employees the breathing room to appropriately deal with demands like caregiving. This means remaining (or becoming) committed to flexible work arrangements and allowing remote or hybrid work. 

When it comes to concrete wellness benefits, options like wellness stipends and subsidized or free gym memberships or class passes — those that have few barriers to use and can be used in a discreet manner — appear to be popular, as Opinium’s survey demonstrates. Some employers have also explored creative, specialized options like connecting employees with special needs’ children to subsidized caregiving solutions or committing to a companywide week off annually.

As employers strengthen their benefits to attract talent in a tough labor market, establishing a commuter benefits program that makes sense in a hybrid environment is just one of the headaches HR is grappling with. With a variety of employees working at a variety of sites and holding a variety of preferences, how can HR develop a workable program?

Three transportation leaders weighed in on the question during Luuminary22, a summit on the future of the commute, hosted by commuter management platform Luum. All had different types of workers, different locations and different needs — but they pursued some similar strategies with respect to commuter benefits.

Allow for flexible use

Some companies — like those that run hospitals and pharmaceutical research facilities — require in-person work. For Jordan Fallman, global pharmaceutical company Sanofi’s Real Estate North America lead, the situation is even more complicated; because the nature of scientific research drives the hours for many employees, “our hours are all over the place,” he said. 

At its Cambridge, Mass.-based office, which serves as home base for about 2,500 employees, Sanofi needed to provide benefits that would support businesspeople and researchers, from morning to night, from the city to the suburbs. Flexibility was key.

“Our first priority was to be able to provide guaranteed parking for those looking for it,” Fallman said, noting that the company was limited in parking, with roughly half the number of spots compared to the number employees reported they needed. “We were able to create a program where we can provide guaranteed parking at a minimal cost through a reservation system,” he said. The system has provided “the flexibility to extend parking spaces to more than just a finite amount of parkers,” Fallman said. 

While Sanofi also used to have a “segmented” benefits system, requiring workers to pick between parking or transit benefits, it has opened up a flexible daily model, allowing workers to pick different commuting options depending on the day and their needs, Fallman said.

All panelists offered a variety of commuting options and benefits, from company-sponsored shuttles to vanpooling to discounted transit cards to safe and secure bike parking to, when necessary, car parking options. 

Giving workers more choices also means looking at and investing in each commute option, panelists said. Even small infrastructural changes can make a big difference. Shawna Mullen, transportation services manager at Duluth, Minn.-based Essentia Health, said when the hospital expanded its insufficient bike rack to allow for more cyclists, it quickly filled up. 

Find the ESG connection

For the company and workers alike, commuting options are about more than convenience — they help both live out environmental and ethical values. Workers concerned about climate change and the price of gas may be less enthusiastic about driving, and companies that help employees shift to options like cycling, public transit and car pools can more successfully demonstrate to prospective employees and shareholders that they are living out their ESG values. 

All panelists said they were interested in promoting sustainable options over standard parking benefits, and all have seen some success with front-loading transit benefits. “We're seeing people canceling their parking so that they can, you know, take the bus,” Mullen said. “So that's really exciting.” Fallman noted observing a similar pattern of rising transit use at Sanofi. 

Alyssa Sherman, senior manager of workplace services for Salesforce, said the company chooses “dense downtown locations” for its offices, which results in heavy employee use of transit. It also eases the commute with small commuter shuttles and disincentivizes parking by providing no free parking to employees at any of its locations. “As a rule, we’re not leasing parking. We’re not offering it,” she said. It’s a policy the company is sticking with and working to integrate its new acquisitions into. 

Mullen said Essentia has found great success with an incentive program that provides any employee who walks, takes public transit or carpools at least eight days per month a $20 gift card. Essentia tried to pick a realistic number of days to help people develop the habit of using options other than driving alone. “It’s been really popular because it's a guaranteed reward,” Mullen said. “And it's a significant enough amount of money.”

In addition to environmental factors, diverse commuting benefits can help companies reach their equity goals, panelists noted. Not everyone has a car, for example, or lives out in the suburbs. 

“There is a tendency to think that everybody who works here lives far away,” Mullen noted. To combat that, she worked with the data team at Essentia on a mapping analysis to make the company more aware of how many people lived within a 15-minute walk, bike ride or transit ride from the hospital system. “That was really helpful to help justify the cost of subsidizing[;] all of these people have the potential to consider these other ways of getting to work,” she said. “It was not a small number.”

Work cross-departmentally

All panelists were transportation managers, but they said they worked closely with HR to develop commuting benefits and sell their programs to leadership. Essentia Health has a transportation and parking committee that meets weekly, Mullen said, which includes a member of the HR team. Because that person has worked collaboratively with the transportation team, “they're really familiar with where the conversation has been and how the conversation has evolved and where it's coming from,” she said.

“Because we are subsidizing so much of the commute offering, it's an important piece of our recruitment,” Fallman added, saying Sanofi relied on HR to market the offerings to prospective applicants. 

Kelly Koster, senior director of product marketing and sales enablement for HealthEquity and the panel’s facilitator, also noted the importance of good commuting benefits for recruiting. “It’s table stakes [for a company] to offer me a free transit pass,” Koster, who is based in Seattle, said. Otherwise, she said, “I will not accept a job.” 

With flexible options and movement toward company values remaining a focus, panelists noted the importance of being nimble and allowing for change as workplaces continue to adapt to hybrid work and employee preferences.

Even when front-line hourly employees of color have work-life benefits like leaves of absence and parental leave available, nearly half (45%) said they don’t feel they can take advantage of them “without jeopardizing their employment or career advancement,” according to a recent McKinsey & Co. report. 

When asked whether their company's diversity, equity and inclusion policies — in which McKinsey included leaves of absence, paid parental leave and work from home flexibility — were effective, 81% of company senior vice presidents surveyed agreed, compared to 59% of hourly front-line workers and 74% of salaried front-line workers. 

While workers of color are overrepresented among front-line workers generally, they are underrepresented among the highest-paying front-line roles, McKinsey found. There are comparatively few workers of color in utilities, mining and construction, for example, while people of color are overrepresented in lower-paid industries like food services, recreation and retail.

While McKinsey noted that some front-line workers, such as nurses and teachers, are salaried, its study focuses primarily on those in hourly roles, such as retail managers and kitchen staff. This second cohort is made up of about 95 million people, earning an average annual income of $33,000.

A key takeaway from the report is that Black, Indigenous, Asian and Latino members of the workforce are disproportionately affected by harmful work environments, since they are overrepresented in front-line work. Front-line work, research shows, is a labor lane plagued by minimal pay (unlivable wages, by McKinsey’s assessment), few opportunities for advancement and meager benefits, if any.

People of color are “particularly likely to remain” in front-line work and to have “lower job quality,” the McKinsey report said, suggesting a disproportionate exclusion from work-life benefits. While McKinsey fails to provide specific insight for Indigenous front-line workers, the report does offer key findings for Black, Latino and Asian workers.

Regardless of station, Black employees were least likely to report feelings of inclusion at work. Not only did McKinsey researchers call this dynamic “a no-win situation” for Black front-line workers, but this also mirrored employee inclusion issues in the Asian and Latino communities.

Latino people are more likely than any other racial group to be front-line workers, are most likely to be immigrants (with the lowest level of sponsorship), and have the lowest level of post-secondary education. Each of these factors create “daunting” circumstances in which to build a career, McKinsey reported.

“Despite these challenges, Latino employees in our sample have achieved a higher share of promotions from front-line jobs to entry-level corporate roles than other employees of color,” researchers said, adding that once Latino talent are promoted to corporate roles, they report inclusion levels on par with their White peers.

The report notably debunks the model minority myth hanging over the Asian community. One in five front-line workers in this group have earned at least a bachelor’s degree; this rate is higher than that of Latino (8%), Black (10%) and White people (16%) in similar roles. Compared to other people of color, Asian people were also more likely to tell McKinsey that they felt included in their workplace. They were more likely to believe their job environment is fair and impartial.

Asian workers, however, consistently make less than their White counterparts in the same jobs, by McKinsey’s count. Additionally, more than half lack sponsors, contributing to an overall feeling of being unsupported. They also reported the highest level of burnout, McKinsey researchers said.

McKinsey said that the misconception of Asian people as unanimously “diligent and quiet” may be to blame for declining representation in management. The report noted the difficulty of drawing conclusions about Asian workers as a single category, however; Asian workers “represent a diverse array of nationalities and subgroups, each with its own distinct experience,” it said. 

The pandemic disrupted employers’ paid time off policies, but years later, a recently published study shows the problem may have only grown worse.

Results from a survey of U.S. adults by PTO solutions provider Sorbet found that 55% of PTO went unused by employees, compared to 28% in 2019. In all, the company said 57% of workers left PTO on the table in 2022, compared to 37% in 2019.

That unused PTO translated into a real monetary cost for workers, too. Sorbet estimated that the average employee held $3,000 in unused accrued PTO.

“We tend to think of PTO in terms of time, [but] people often don’t realize is that there’s a dollar and cents implication in your compensation when you accrue PTO,” Veetahl Eilat-Raichel, Sorbet’s CEO, said in an interview. “And when you don’t take it, you essentially end up with a hard-earned portion of your compensation locked up and unavailable to you.”

The vendor’s findings seem to mesh with those of other organizations. Eagle Hill Consulting announced survey results that showed 42% of U.S. workers had not taken a vacation in the past year, though not all workers in the cohort reported having access to PTO.

The impact of flexible work

Years after COVID-19 created shutdowns and wreaked havoc on employers’ accrual systems, Eilat-Raichel said employers still have difficult questions to consider with respect to how their organizations handle time off, such as whether to adopt policies that group all PTO into one bucket and allow workers agency to choose how to use their time, or create separate buckets.

But as far as employees’ lack of willingness to take time off, the pandemic may have only highlighted a pre-existing problem. “Partially, this trend of not taking time off is deeply rooted in culture,” Eilat-Raichel said. “It has to do with the fear of the optics of it [and] being seen as unprofessional or less committed.”

Employees felt even less legitimacy to take time off with the advent of remote work, she added, because of the ways in which life activities and events bled into the work day.

Few trends are perhaps as reflective of this sentiment as the “workcation,” described in a March BBC article as a trend in which employees who are able to work from anywhere combine elements of a vacation with a workday in an exotic locale.

As excited as employees may be at the thought of cliff diving in between days spent working on a laptop, a recent Visier survey found that employees who worked while on vacation were more likely to quit their jobs than those who disconnected. The firm also found in a separate 2021 survey that one-third of employees felt pressured to check in with their jobs during vacation — while many respondents described vacation as a mere temporary relief from burnout.

What can HR do?

HR cannot solve the unused PTO problem by itself, Eilat-Raichel said. Instead, departments will need to work with leadership and management to address the cultural component involved. That could start with a baseline of ensuring employees have the time they need to take care of themselves, and then ensuring that leaders model the behavior they want to see from workers.

“If the general sentiment is that you need to always be on in order to perform, that’s not going to work,” Eilat-Raichel said.

Having access to the right data also may help. Eilat-Raichel said she is seeing employers track PTO use and include it as part of employees’ performance reviews so that managers can follow up on the subject.

Employers also may need to be aware of the inequities inherent in PTO availability and use. Sorbet, for instance, found that male employees received 10% more PTO days on average than women, and that men took 33% more days off than women.

Since the start of the pandemic, employers have experimented with enhanced PTO policies on a small scale. Google announced in February that it would implement a minimum of 20 vacation days for employees alongside expanded caregiving leaves. Others, like Hootsuite, have taken companywide weeks off with the aim of addressing burnout and mental health issues.

PTO can be an expensive and difficult benefit to administer, but the fact that workers let their time off go underutilized and unused “almost does the exact opposite of what PTO was originally intended to do,” Eilat-Raichal said. “There’s so much to be unlocked by this incredible benefit that you already have.”