Companies are continually looking for ways to help their employees maintain financial security amidst the ever-increasing healthcare costs. One way for employers to do this is by offering voluntary benefits during Open Enrollment.

Due to their cost-efficiency and portability, voluntary benefits play a vital role in many businesses’ benefits strategies. They allow employers to offer lucrative benefits to workers without incurring huge costs. 

What Are Voluntary Benefits?

Voluntary benefits are products ranging from life insurance to pet coverage and legal services offered through the employer but paid partially or solely by employees.  

Employers should not consider voluntary benefits as nice-to-have but must-have. They should perceive them as a way to meet employee needs and personalize rewards. Voluntary benefits are appealing to employees because of their flexibility, portability, and cost-effectiveness.

Voluntary Benefits to Consider

There is no one-size-fits-all benefit offering to enhance the financial health of employees. The needs of your employees depend on their demographics and industry. Some of the voluntary benefits you can consider offering your employees include:

• Short and Long-Term Disability Insurance: it covers employees when they are out of work due to disability.
• Life Insurance: it pays a sum of money to a designated beneficiary upon the death of the insured.
• Critical Illness: it covers employees when they are diagnosed with a critical disease.
• Accident Insurance: it covers an employee against accidents, especially the associated unexpected costs.
• Hospital Indemnity: it pays if the insured is hospitalized.

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Advantages of Voluntary Benefits

Voluntary benefits provide many advantages for both the employee and the employer. Here are just a few reasons you may want to consider offering voluntary benefits during Open Enrollment.

1.  Relieve Financial Pressure

Following the COVID pandemic, many Americans are struggling financially due to layoffs, job loss, or other financial burdens. Regrettably, financial issues affect employees’ personal and professional lives. 

According to PWC’s survey, financial challenges are a leading cause of stress for employees, a significant distraction at work. Also, financial issues can cause anxiety and absenteeism that are detrimental to an employee’s productivity.     

These statistics reveal the need for employers to find ways to help employees manage their finances. Volunteer benefits can be used to enhance employees’ financial wellness and relieve financial pressure. 

According to an Aflac survey, employees offered voluntary benefits are 15% less likely to be distracted by personal financial issues during work. Also, 40% of employees receiving voluntary benefits become confident in their financial future.

In a nutshell, offering voluntary benefits gives workers peace of mind and allows them to focus on their work. It also reduces employees’ financial burden in a medical emergency. 

2.  Make Employees Feel Valued

Voluntary benefits can be great in making employees feel important and valued. They send a message to employees that your organization cares about their health as well as their financial wellness.

Voluntary benefits give employees a choice in what they want to get from their work. Workers choose the benefits they would like depending on their personal circumstances and lifestyle. They settle for the benefits that work best for them and their families. This improves employee engagement. 

Voluntary benefits fill gaps that primary health insurance leaves, offering value for employees. For example, critical illness coverage can cover an employee in the event of a crucial illness that would otherwise leave them with a huge medical bill.  Voluntary benefits offer a financial safety net for employees in the event of unexpected expenses.

When employees feel valued, their morale and job satisfaction increase substantially. This results in higher productivity and reduced turnover rates. Employees who feel covered, safe, and happy are more productive in their roles.

3.  Increase Employee Retention

Currently, the competition for top talent is at an all-time high. As opposed to the past when employers chose employees, things are different right now. Job seekers choose the employer they want to work for.

Employees want more than a hefty paycheck. They also want numerous benefits. Therefore, an employer that offers voluntary benefits is more advantaged in the eyes of a job seeker. 

Research shows that 62% of job seekers wouldn’t work for an employer that doesn’t offer voluntary benefits. An excellent voluntary benefits package provides a genuine competitive advantage for companies looking for top talent.  

Voluntary benefits enhance an employer’s recruiting and retention efforts. 75% of employees are more likely to stay with a company because of its employee benefits package. Also, 69% of employees would switch jobs to get better benefits.

Remarkably, voluntary benefits offer employees incentives to stay with a company. With voluntary benefits, an organization avoids the high price tag of workers’ turnover. One study reveals that turnover costs businesses approximately $15,000 per employee.   

4.  Cost-Effective

Volunteer benefits are cost-effective for both employees and employers. Employees get the benefits they desire at a reduced group rate. The cost of the benefits is reduced, compared to purchasing the coverage as an individual. Employees have the ability to choose the benefits that appeal to them, further decreasing costs.

Employees pay for most, or all, of the cost of voluntary benefits. Therefore, they are inexpensive for employers. They create a win-win situation for employees and employers. 

One study shows that 74% of CFOs agree that volunteer benefits are a cost-effective way to boost employees’ satisfaction with benefits. They allow employers to offer robust benefits while staying within budget constraints. Since voluntary benefits reduce a company’s payroll taxes, they are cost-efficient.   

5.  Increase Competitiveness

For employers, voluntary benefits increase their competitiveness in the market. In some instances, voluntary benefits can be the differentiating factor between your company and its competitors. Voluntary benefits allow small and large entities to compete effectively on level ground.

The Bottom Line

Voluntary benefits not only have advantages for employees but employers too. They relieve financial pressure, make employees feel valued, increase retention rate, and are cost-effective.

However, merely offering benefits is not enough. Employers should ensure that their employees understand the value of the benefits and how to use them. Employees should be allowed to choose the benefits that best suit their health and financial needs.

It’s no longer a secret; businesses that want to improve their performance must keep their primary assets – employees – in good shape. 

LUXA Enterprises specializes in HR services, outsource accounting, bookkeeping, and payroll services. We match up with ideal candidates for services by allowing small to midsize businesses to increase focus on their growth through outsourcing. If you want to know how we can help you, contact us today!

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We’ll demonstrate how you can save money while improving your efficiency and accuracy when you outsource your back office services to TEAM LUXA.
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Call TEAM LUXA today at (918) 928-7288 to learn more about why outsourcing is right for you!