Why Voluntary Employee Benefits Matter for a Motivated Workforce

Employee benefitsmatter. Forty percentof employees say that their company becomes more attractive if they tailor their benefits to the individual. Your employees want a lot of options when it comes to their benefits, and they are more interested in your company if you let them choose and create great packages for themselves.

Voluntary employee benefits are a solution many companies use to provide a large variety of benefit options without breaking the bank. We’ll walk you through voluntary employee benefits and the types of voluntary benefits employees love.

What Are Voluntary Employee Benefits? 

Voluntary employee benefits are benefits or services offered by an employer at a group or discounted rate. Employees get to choose if they want that coverage and, if they opt in, pay for it in part or full via payroll deductions. Voluntary benefits are often supplemental to traditional benefits and are highly customizable to meet a variety of needs. Some examples of voluntary employee benefits include supplemental vision or dental insurance, gym memberships, life insurance, and pet insurance.  

Some voluntary benefits are supplemented by employers. This option can make voluntary benefits extremely appealing to employees (hello discounts!), which can help you draw in great talent. Fringe benefitsthat aren’t mandated by law, which arenon-monetary benefits like stock options or moving assistance, are a similar idea that some companies will use as well to drive talent acquisition.

Types of Voluntary Employee Benefits

Voluntary benefits are as variable and diverse as you want them to be. You can offer what you think your employees would benefit the most from. Here are some common choices for voluntary employee benefits that you can consider for your own benefits package: 

• Additional Health Insurance
• Dental
• Vision
• Disability Insurance
• Life Insurance
• Financial Education/Counseling
• Pet Insurance
• Student Loan Repayment Programs
• Car Insurance
• Discounted Goods/Services
• Identity Theft Protection
• Wellness Programs

This isn’t an exhaustive list. There are so many great benefitsout there you can offer! So how can you choose which benefits to offer? A quick way to get great insight is to ask your employees what would be most helpful for them with an employee benefits survey.

Why Should You Have Voluntary Employee Benefits?

Voluntary benefits offer employers a good way to manage costs. They also provide employees lots of options— which is why so many companies include voluntary benefits in their benefits strategy. Cost savings aside, there are several reasons companies offer voluntary employee benefits: 

• Increase employee retention. Losing employees never feels good, and it’s hard on your wallet. If a high-level employee leaves your company, it’s going to cost you a decent percentage of their salary to replace them. Even for mid- to lower-level employees, it’s going to cost you up to 50% of their annual salaryto replace them. That’s why retention matters. Eighty-five percentof employees wouldbe more likely to stay with their current employer if the company prioritized employeewellbeing, so offering a great variety with voluntary benefits can help you increase employee retention.
• Acquire top talent. Talent is a big deal. Having a great team helps you stay competitive and on top of the game. Attracting high performers can be tricky,  — especially for small businesseswith tighter compensation budgets. This is where voluntary benefitscome in — they can be a great opportunity to gain an edge that drives talent acquisition.
• Increase productivity. Employee benefits can increaseproductivity, and companies with a highly engaged team are can see 23%higher profits than organizations with disengaged workers. Harnessing the power of benefits can deliver cascading results throughout your company. 
• Increase employer reputation.Today’s customers careabout the way your company operates. Treating your employees well reflects well on your company. You’ll be able to boost your reputation with your current customers and potential customers by making sure your employees are taken care of. And in the era of Glassdoor companyreviews, an improved reputationcan make recruiting easier too. 
• Improve employee health.Gym memberships and other wellness programs reduce stress and help employees stay healthy. This can improve attendance andlower traditional health insurance costs.

How to Set up a Voluntary Benefits Program

1. Determine what your employees need

The best way to identifywhat your employees want is simple: Ask them! Employee benefits surveyscan provide a wealth of valuable information to shape your expanded compensation strategy. 

One way to get this information is issuing a survey explicitly about the voluntarybenefits yourcompany is considering to gauge employee interest. Alternatively, you can add a few questions about these prospects in a pre-existing company survey, such as an annualemployee engagementquestionnaire.

2. Research and select providers 

OK! Your survey is complete and revealedyour employees are clamoring for pet insurance and professional development funding. Now you know what programs your team wants, you can research which providers your organization can partner with to furnish those benefits. 

Questions to consider during this process include:

• How much will each provider programcost the company?
• How much will employees have to pay each provider to enroll?
• What are thepros and cons of the services offered by the provider?
• What would it take to integratethis providerinto your employee benefits platform?
• Can you roll out this benefit mid-year, or is it better to wait until the next open enrollment period?
• What metricsdoes the provider offer that will allow you to measure employee engagement with the benefit?

3. Coordinate with all teams involved 

Now that you’ve found the perfect petinsurance provider, it’s time to createa deployment strategy. HR will be the driving force behind the initiative, a smooth roll out will likely require collaboration with other departments. You will want to speak with your payroll team early and often, for example, to ensure they are ready to handle automatic deductions associated with enrollment. Other teams that should likely be invited to contribute before a company-wide announcement include leadership and legal.

4. Build a communication plan

Raising awareness within your company for any new programis foundational to reaping all the organizational benefits of offering it. After all, your workforce can’t purchase coverage for Spot if they don’t know about it! 

Consider leveragingall of your company’s internalcommunication channels to raise awareness for your new voluntarybenefit. Avenues to consider include company-wide emails, enrollment guides on your company intranet, a post on company chat platforms like Slack, announcements in company-wide townhalls, and updates to the benefits section of your employee handbook.

5. Monitor employee participation

Tracking employee engagement rates with your new benefit will help you gauge its impact. You can track how many people enroll in the program when it’s first announced, as well as how often people take advantage of it throughout the year. If a substantial number of employees are taking part in theprogram, it’s a likely sign the program is an asset to your benefits package.

Voluntary Employee Benefits Frequently Asked Questions

You might have a few questions about voluntary benefits. Let’s see if we can answer a few for you. 

Are voluntary benefits tax deductible?

Yes, IRS Code Section 125 is all about letting voluntary benefits be deducted from the payroll pre-tax or post-tax. Doing it pre-tax can actually saveyou money on net costs and from more payroll taxes. It will depend on your carrier if you can do it pre-tax or post-tax. 

What are voluntary benefits rates?

The rates are what the employer pays to provide the benefit and what employees pay to participate. The employer can pay rates to help contribute to premiums and coverage, and the employees pay rates to get coverage. 

Are there employee minimums for voluntary benefits?

Depending on the carrier, you could find that you have to hit a minimum number of employees enrolled. Most carriers will start with a minimum of three employees, but it will depend on the carrier. 

Who qualifies for voluntary employee benefits?

Employees, spouses, and children are eligible based on the employer’s requirements. Depending on your carrier, you could let your employees include all of their dependents or provide employee-only coverage. 

When can employees change their coverage?

Typically employees can opt in or out during scheduled enrollment or with a qualifying life event such as marriage, divorce, childbirth, or adoption. 

The Bottom Line

Overall, voluntary employee benefits are a great way for you to customize your benefits offerings, so your employees get the coverage they need and want, and you’re able to reap the benefits of offering great benefits. Benefits are a way to keep your employees motivated, happy, and productive. Employees want great benefits, and employers can meet that need in so many ways — including voluntary benefits. 

Voluntary employee benefits are only the beginning though. There are so many additional ways to help care for your employees’ wellbeing and improve your workplace. And the great news is that you don’t have to figure it out alone. Talk to a wellbeing specialisttoday to get started creating employee benefits plans that help your employees and help grow your company. 

References

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