5 Voluntary Benefits to Boost the Appeal of Your Total Rewards Program
The war for talent is on, and shrewd employers recognize they need to up the ante to attract and retain human capital in this market. This realization, however, places pressure on the benefits department. Strong core benefits are key to an effective total rewards program, and employers that want to differentiate themselves in the talent market must offer voluntary benefits that appeal to a wide audience.
Driven by the need to keep escalating core benefit costs in check while generating and maintaining value for current and prospective employees, benefit managers continue to search for appropriate voluntary benefits to add to their offerings. Like core benefit plans, many voluntary benefit programs provide attractive incentives to employees and employers alike: special underwriting provisions, additional discounts, payroll deductions, and ease of enrollment, to name a few. Many voluntary benefits cost about the same as a daily cup of coffee, but unlike this morning treat, they can give employees peace of mind and address gaps in employer healthcare plans or financial wellness programs.
The key to making the right voluntary benefit selection is knowing your population and aligning the voluntary benefits with the core benefits. Doing so will help employees see how the programs work together and the overall value they provide. It is also important to keep in mind that no single voluntary benefit is a solution for all employees. Certain voluntary benefits may resonate more with some employee populations than others.
Choosing Voluntary Benefits: What Should Be on Your Short List?
Think about the gaps that might exist in your core benefits. For example, if there are opportunities to supplement your core medical plan and minimize financial risk to your employees, you could consider offering some kind of worksite benefits.
The second factor to consider is which programs will appeal to which segments of your population. Build personas to represent each segment of your workforce to understand the personal needs of your employees. These personas will help you build a matrix of programs that appeals to diverse employee groups.
Once you know the gaps in your existing benefits and the needs of your employees, you can decide which of the following popular benefits are right for your organization:
1. Worksite Benefits
Worksite benefits help employees cover the out-of-pockets costs associated with medical issues. The most widely provided programs are critical illness insurance, accident insurance, and hospital indemnity insurance. These programs generally pay a cash benefit directly to the employee regardless of existing insurance. For example, critical illness insurance will pay a lump sum amount when a covered individual is diagnosed with a serious, defined illness, such as cancer or a heart attack. This payment is tax-free and can be used for any purpose, including out-of-pocket medical expenses, rent, mortgage, car payment, food, etc.
Critical illness insurance may appeal to a more mature demographic, while accident insurance may be attractive to a young, active family. Like a lot of voluntary benefits, worksite benefits are usually portable if the employee changes jobs, are payroll-deducted, are cost neutral for the employer, and can provide peace of mind to employees.
2. Employee Purchase Programs
Speaking of peace of mind, certain voluntary benefits can help employees manage unexpected costs unrelated to medical problems. Employee purchase programs cover items such as new computers, washers and dryers, and other pricey appliances.
The key benefit of employee purchase programs is they generally allow employees to spread out the payments on the products they buy over a period of time through payroll deduction. This may be helpful for young employees trying to establish credit or for employees who want to avoid high-interest loans. These programs also give employees a way to cover large expenses without withdrawing from their 401(k)s, thus preserving their retirement savings.
3. Student Loan Debt Solutions
Workers are drowning in student debt, and the stress caused by managing this debt can affect employee productivity. Employers can help ease that stress by offering financial education and counseling, connecting workers with refinancing options, and even making contributions toward employees’ debt principals.
4. Group Legal Plans
These plans are like having a lawyer on retainer for a fraction of the cost. Group legal plans provide vetted attorneys who can address a myriad of employees’ legal needs, such as will preparation, home purchase, traffic tickets, and document review.
5. Auto and Homeowners Insurance and Identity Theft Protection
A group auto and homeowners insurance program can provide employees with discounts based on tenure and payroll deductions that are not available in the individual market. Likewise, identity theft protection can offer discounts to employees they normally would not get outside of the employer channel.
As a final note, it’s important to understand that the best voluntary benefits program in the world is no good without a strategic communication and enrollment plan. Voluntary benefits programs are most successful when they are communicated and enrolled in conjunction with Open Enrollment. That way, employees can see how voluntary benefits complement their core benefits and make more informed decisions about which benefits they choose.
Peter Marcia is CEO of YouDecide.