The pandemic changed the workplace in many ways. One of them is that it made the talent market more competitive. The changes put employers in a complex situation, and to attract more talent and retain employees, they had to change their strategy. Specifically, employers are now expanding benefits packages and providing supplemental benefits to workers.
The reference point in this article is the report “The State of Employee Benefits, 2021.” The 3.5 million enrollment records show that employers are keen on maintaining employee engagement. They’re achieving this by controlling healthcare costs by:
- Approaching the benefit plan design from a different perspective
- Addressing the overall employee wellbeing
- Being more consistent in their workforce benefits planning
More employers view this approach to additional voluntary benefits as essential in their employee engagement efforts. They’re becoming more open to traditional options like life insurance or more modern options like meditation and financial wellness.
Voluntary benefits practice leader Mark Hebert, who works at Willis Towers Watson, reports a significant increase in demand for voluntary benefits. 95% of their clients believe that voluntary benefits will play a crucial role in the rewards strategy.
The workplace will feel the impact for the next three years. The position is a different reflection from what it was in 2013. Only 59% of employers felt that voluntary benefits were significant back then.
What Voluntary Benefits Are Employers Providing?
More traditional voluntary benefits like legal, accident and critical illness insurance are in high demand. The market has also shown a significant interest in newer products like
- Student loan consolidation benefits: 8%
- Student loan refinancing programs: 10%
- Long-term care insurance: 16%
- Hospital indemnity plans: 24%
- Pet insurance: 34%
- Identity theft protection: 36%
- Critical illness insurance: 43%
In addition to changes in the benefits options, there’s also a change in why employers provide this coverage. In 2016, the grounds were both reactive and defensive. Employers would use voluntary benefits to replace something that employees considered a takeaway.
For example, voluntary benefits would be a replacement for eliminating the preferred provider organization (PPO) option.
In this report, employers gave the following three goals for offering voluntary benefits:
- To present their employees with more meaningful choices: There is more employee engagement and greater satisfaction when employees have a more comprehensive range of options to choose from.
- To satisfy the various needs of a diverse workforce, there’s no one-size-fits-all benefits plan that can meet the varied needs of every employee. With a broader pool of benefits, employees can enjoy economic, cultural, or generational diversity.
- To promote the financial wellbeing of employees: A well-structured voluntary benefits plan can protect employees’ financial stability. That makes employees happy and more productive.
Among the employers that have already added the voluntary benefits package, 71% have made it a permanent change. 26% are still weighing their options on whether to avail their employee benefits permanently. Another 16% added services to the mental health benefits package, influencing 21% of another group of employers to consider doing the same.
In addition to voluntary benefits, employers are providing more flexible working hours. The goal is to accommodate childcare and eldercare needs. The move is in response to the IFEBP. At the same time, the pandemic has influenced 17% of employers to avail more carryover options for paid time off.
As speciality products continue to increase in popularity, employers need to push for more transparency and better analytics. That way, they can track the benefits trends to avoid misuse of the packages by either party.