Sector Report: Variety Is the Key to Voluntary Benefits Success
Customization, ease of use and lots of options make voluntary benefits an attractive recruiting tool. Also, the Hot List for rewards and recognition providers.
Voluntary benefits used to be a necessary add-on — giving employees the option to add auto, home or life insurance to their list of annual benefits. But today’s voluntary benefits packages are far more diverse, offering a range of services including pet insurance, financial wellness, legal help, long term disability and even genomic mapping, said Amy Hollis, national leader of voluntary benefits for HR consultancy Willis Towers Watson. In the consultancy’s most recent benefits survey, almost 70 percent of employers said voluntary benefits and services will be an important part of their employee value proposition in the next three to five years.
“Companies are using voluntary benefits to enrich their offerings without additional cost,” she said.
The variety of benefits also addresses the expectations of today’s workers, said Wendy Herndon, second vice president of product development and implementation for insurer Aflac. “People today want to customize everything in their lives, and benefits are no exception.”
Among the new programs, financial wellness is gaining the most attention as employees from every generation struggle to manage debt, pay off loans and plan for retirement. College loan repayment support is especially popular with millennials, noted Rob Shestack, chairman and CEO of the Voluntary Benefits Association in Philadelphia. These programs can include employer matching through 401(k) programs and refinance options to lower monthly payments, along with financial planning tools and education.
Student loan repayment programs are still relatively new; only 4 percent of companies offered them in 2017, according to a survey by the Society for Human Resource Management. However, as more young people come to the workforce with crippling college debt, these kinds of programs could become attractive recruiting and retention tools, Shestack said. “Millennials change jobs every two to three years,” he said. “Employers can use this kind of program to get and keep the best talent.”
Identity theft protection is also gaining popularity in the financial wellness category, he said. These programs help employees to both protect their identity from hackers, and to recover when theft has taken place, Shestack said. “It is driven by the world we live in.”
All of these programs can add value, though companies should be thoughtful about what they offer. While variety is in demand, it’s only useful if employees want what is being offered, Shestack said. “There are so many innovative programs out there, but you have to fit them to the demographics of the company,” he said.
And even though employers don’t pay for these benefits, managing so many offerings can be an administrative nightmare, added Hollis. “Administration is the top obstacle companies face with these programs.”
This is giving benefits providers the opportunity to add value for their clients by creating simple solutions to ease program management. For example, some vendors will provide a single interface to manage multiple service offerings, so employees can find and access any benefit through a single portal or platform. “Addressing administrative obstacles is viewed as a significant advantage,” Hollis said. She has even seen larger companies prioritize ease of administration over cost when choosing vendors.
Vendors are also expanding into more digital education and enrollment options, providing clients with apps, online portals, videos, and chatbots along with traditional phone and face-to-face support. This is all part of the personalization of voluntary benefits, according to Herndon. “The insurance industry is focused on creating the best customer service by providing an omnichannel user experience,” she said. “Meeting the customer where they are is the biggest challenge for us right now.”
Once companies choose their voluntary benefits options, they should actively promote them and educate employees about their value.
“The most frustrating thing is when HR makes the effort to provide these programs then does passive enrollment,” Shestack said. “It’s like saying you don’t care if people use them or not.”
He believes HR should run open enrollment for voluntary benefits and provide employees with educational materials, reminders and workshops to help them choose the benefits that are appropriate for their needs. “It is the number one thing employers can do to encourage enrollment,” he said.
The more employees are aware of these programs, the more value they bring to the business, he added.
Sarah Fister Gale is a writer in Chicago. Comment below or email@example.com.