Voluntary benefits no longer seen as just 'nice to have'
- Voluntary benefits are becoming staples instead of just add-ons among employers' benefits offerings, according to a new Willis Towers Watson (WTW) study. The "2018 Emerging Trends: Voluntary Benefits and Services Survey" found that employers are expanding their choice of voluntary benefits to address workers' financial needs and overall well-being.
- The study also shows that just 5% of employers said voluntary benefits had no impact on their employee value proposition and total rewards strategy, down from 41% five years ago. More than 69% of employers in the study said voluntary benefits will be a very or more important part of their employee value proposition in the next three to five years, twice the percentage who currently feel that way (36%).
- Voluntary benefits that address student loan debt and help parents save for their children's education are gaining traction, study results show. Currently, 8% of respondents offer student loan consolidation programs, 10% offer student loan refinancing arrangements, and more than half offer financial planning and counseling services. WTW expects these benefits to expand substantially by 2021. Other in-demand voluntary benefits include identify theft protection, pet insurance, long-term care insurance, critical-illness insurance and hospital indemnity.
As the survey points out, voluntary benefits are popular with employers and employees because they're cost-efficient and address employees' personal needs, especially their financial well-being. Money issues are a major distraction and stressor for one-in-three employees, a 2017 study found. The consequences can be physical and emotional health problems for workers and lower productivity, absenteeism and higher healthcare costs for employers. Offering benefits that address workers finances is a win-win all around.
The tight labor market is making the talent war more challenging, leaving employers looking for ways to differentiate themselves from the competition to attract candidates. By expanding their benefits beyond healthcare and disability, employers can gain an edge over their challengers who stick with just the basic offerings while creating a solid employer brand in the process.
Voluntary benefits also speak to the need for personalization, which workers say they want in their benefits plans. There are voluntary benefits for a wide range of personal needs, which technology has made more accessible through apps and high-tech tools.