From smartphone apps to television schedules, it seems everything today can be customized to fit the needs of individuals. The need for customization extends beyond technology and media into the workplace -- employees want to tailor their benefits packages to better fit their needs. Voluntary benefits allow them to do just that.
In a 2014 study conducted by LIMRA, seven in 10 employers surveyed said they offer voluntary benefits to improve morale for existing employees and to attract new talent. As voluntary benefits become more popular, are they worth offering?
Here’s a look at what voluntary benefits are, and how they can benefit employees and employers:
What are voluntary benefits?
Voluntary benefits are insurance products employees can elect to add to their plans to fill gaps in health insurance to meet their needs. Voluntary benefits are offered by employers but are paid completely or mostly by employees through payroll deferral.
Traditional voluntary benefits include life insurance, vision, dental, disability, cancer and critical illness insurance, and accident insurance. As the needs of employees change, employers are beginning to offer non-traditional benefits such as financial planning, online education and career development.
Voluntary benefits are appealing to employees because they offer a nice flexibility to everyone’s compensation package. But why are voluntary benefits important to employers? Here’s what the data has to say:
1. Employees want them.
Voluntary benefits may seem like a nice-to-have option, but employees see them as an important part of a benefits plan. Among employees surveyed in the 2015 Aflac Workforces Report, 88 percent view voluntary benefits as part of a comprehensive benefits package.
Offering the benefits employees want keeps them happy and engaged. In the Aflac survey, employees who were offered voluntary benefits were 19 percent more likely to be satisfied with their jobs and 14 percent less likely to look for a new job in the next year.
In addition, more than 76 percent of engaged employees surveyed by Quantum Workplace this year said they were satisfied with the health and wellbeing benefits their employer provided, compared with less than 49 percent of hostile employees. Engagement decreased when employees said they were less satisfied with the benefits provided by their employers.
When employees love their benefits package, they are more likely to stay loyal to the company and contribute their best work.
2. They relieve financial pressure.
When offered voluntary benefits, employees are more likely to be confident in their financial future, according to the Aflac survey. This financial confidence translates to happier, less stressed employees.
In a survey of U.S. and Canadian employees conducted by Virgin Pulse this year, 40 percent of employees wished their employers cared more about their financial well-being. What’s more, among employees surveyed by Aflac, those who were offered voluntary benefits were less likely to name personal financial issues as a top non-work related issue that distracts them from their work.
Offering voluntary benefits can give employees peace of mind, making them happier and allowing them to focus on their work.
3. They’re cost-effective.
Voluntary benefits are pleasing to both employees and employers’ bottom lines. Among employers surveyed by Prudential in August and September 2013, 40 percent said voluntary benefits allow them to maintain the competitiveness of their benefits program while adding little or no cost. For employers with more than 1,000 employees, the percentage who said voluntary benefits provide value without added cost rose to 48 percent.
Voluntary benefits are cost effective for employees as well. Among employees surveyed by Prudential, 60 percent said employer-provided voluntary benefits typically cost less than those purchased elsewhere.
So, for 2016, the takeaway seems clear. Providing voluntary benefits to employees can boost morale and keep employees satisfied with their benefits without breaking the bank.