Reasons To Offer Voluntary Benefits to Employees
Voluntary benefits are a type of fringe benefit that provide win-win solutions for both employers and employees. Here are some of the reasons companies offer voluntary benefits:
- Improve employees’ health. Many voluntary benefits, such as gym memberships, help employees stay healthy. Healthy employees are happier and more productive.
- Alleviate outside and work stress for employees. When employees can reduce stress, they come to work able to focus and produce more readily.
- Increase job satisfaction. Additional benefits, such as legal services, financial planning services and critical illness insurance tell employees their employers care about their whole selves. Valued employees are more loyal employees.
- Attract top talent. Companies can compete with other companies to attract top talent by offering employees opt-in benefits that help them meet both their personal and professional goals, bridge the gap between insurance coverage and actual needs and reduce stress.
- Save money. Voluntary benefits are often paid partially or fully by employees who opt-in to them. In addition, some voluntary benefits can be paid with pre-tax income, all of which leads to savings for employees.
- Decrease employees’ time off work. When benefits reduce employees’ stress, help them become more productive and accomplished at work, allow them to feel they are valued members of the team and boost their physical wellness, they often lead to a higher level of job satisfaction. With higher job satisfaction, employees are more likely to show up day after day.
Types of Voluntary Benefits and Costs
Voluntary benefits often fall into one of four categories. These include health and wellness, security, personal benefits and financial wellness. While the list of possible voluntary benefits can be long, here is a look at some voluntary benefits from each of these categories and a ballpark price for each benefit. Keep in mind that prices often depend on the employee, the level of coverage and the company size, among other factors.
- Life insurance. Employers can expect single-coverage life insurance to cost between $20 and $30 per employee per month.
- Critical illness insurance. Because coverage is based on the age of the employee covered and the coverage amount, the price range for critical care insurance varies greatly. Someone who is 24 years old and wants $10,000 in coverage can expect to pay about $3 per pay period while someone who is over 70 and wants $30,000 in critical care insurance might pay $200 per pay period.
- Vision insurance. Employers or their employees (in shared cost programs) often pay $5 to $20 per employee per month for vision insurance.
- Dental insurance. Dental insurance often costs $20 to $50 per employee per month.
- Gym memberships. These memberships can cost $10 to $50 per employee per month.
- Identity theft protection. This benefit costs $8 to $24 per employee per month.
- Pet insurance. Offering pet insurance benefits will cost you or your employee $15 to $60 per month per employee pet.
- Financial planning services. These services cost roughly $2,000 to $7,500 per year for financial planning. Employers can pay all or part of this in the form of reimbursements.
- Legal services or resources. Employers can expect these services to cost $9 to $18 per month per employee.
You may want to offer a benefit but it is outside of your budget. In this case, you can choose how much you want to pay for each benefit by sharing the expense with employees or offering reimbursements on part of the expense. In the end, this means that most companies can at least help employees access needed voluntary benefits and offset the costs.
How To Set Up a Voluntary Benefits Program in 10 Steps
To set up a voluntary benefits program, identify business goals and determine employees’ needs and preferences. Do a competitive analysis to find the benefits needed to attract and retain top talent. Next, gather proposals from top providers. At the same time, create buy-in with your leadership team by learning their concerns, presenting solutions and involving them in the provider selection process. Finally, roll out the program and follow up to ensure success.
1. Identify Your Business Goals
Your business goals help you determine the best types of voluntary benefits to provide. For example, one goal may be to reduce employee sick days by offering voluntary health benefits, such as dental plans. Some other example goals could be attracting top talent, retaining the talent you have, lowering workers’ compensation claims, bridging coverage gaps or improving productivity among your workforce.
2. Identify the Needs of Your Workforce
With different workforce environments and characteristics come unique needs and expectations. Develop a profile of your workforce to determine needs or likely preferences around your voluntary benefits program. You might record the genders, ages, marital statuses, family sizes, salaries and job duties. Also, make a record of past workers’ needs, such as disability claims among past workers, chronic conditions, injuries or hospitalization.
Then, consider what benefits might be ideal for your worker profile. For example, if your workforce is primarily people under 30, you might consider a gym membership or education reimbursements as a voluntary benefits option. Life insurance may be a key option to offer an older workforce. And married couples may wish for health insurance for their spouses.
3. Ask Workers About Their Voluntary Benefits Preferences
Send a survey to ask employees for their preferences. While not everyone will answer a survey, this step can give you some added insights into what your company’s preferences and needs are.
4. Do a Competitive Analysis
If your voluntary benefits program goal is to attract or retain top talent, do a competitive analysis to learn which types of voluntary benefits can help you compete. You can often find this information by looking up job descriptions of current competitors’ job openings. Employers usually list the benefits package at the bottom of such job ads. To find these descriptions, look on competitors’ careers pages and search for competitors on LinkedIn Jobs and Indeed.
5. Contact Current Providers
As an established business, you’ve likely already purchased business insurance and group health insurance. Many insurance providers that offer these types of insurance plans also offer plans or even add-on services that cover voluntary benefits, such as group life, vision and dental insurance.
6. Research Providers
Use the internet to research providers that offer the types of benefits you have deemed appropriate to meet your business goals and workers’ needs. Develop a list of top providers, then contact them directly to discuss pricing, offerings and eligibility. One way to compare top providers quickly to develop your contact list is to find buyer’s guides of providers that offer the benefits you plan to offer.
Remember that some of the providers will not be insurance companies. For example, if you want to offer gym memberships, research gyms near your businesses or employees, their offerings and price comparisons. As you do, consider the demographics of your workers to ensure the right feature match in gym memberships.
7. Create Buy-In With Company Leadership
Without leadership buy-in, you’re likely to continually run into obstacles to rolling out your voluntary benefits program and ensuring its continuity. To build buy-in, offer a presentation to help your leadership understand how a voluntary benefits program solves their problems. For example, include statistics regarding how voluntary benefits programs reduce turnover, help recruit top talent, increase productivity or improve job satisfaction and company loyalty.
Be sure to follow up after your presentation to gather your leadership teams’ concerns, then offer to gather again with solutions for those concerns. For example, if a member of your leadership team is concerned about how the voluntary benefits program may affect the bottom line, offer a concrete plan to either offset costs, reduce them or pass them to your workers while still offering workers savings, such as via group life insurance plans.
8. Request Proposals
Now that you’ve done all the groundwork, contact providers to find the best deal. Even if you plan to go with your current provider, request proposals from a few providers to find the best deals with the right features and price mix. Present the options to your leadership team so no surprises hinder continued buy-in and you can enjoy a smooth voluntary benefits program rollout. Help your leadership team feel ownership over the program by choosing the provider(s) as a team.
9. Roll Out Voluntary Benefits Company-Wide
Once your team is confident in the types of benefits to offer, that they will meet business goals and in the selected providers, it’s time to roll out your benefits program to your employees. To ensure employees take advantage of your voluntary benefits program, your HR team should announce the debut of the program and offer videos and literature regarding what benefits are available and how employees can sign up for them.
10. Follow Up
Once rolled out, follow up with employees, including those within your leadership team. Survey them at least twice a year to ensure their needs have not changed and they are satisfied with the program. In that survey, also gather feedback on how you can improve the program and if it is helping you to meet the goals you selected for your program. Once again, you can use Google Forms for this follow-up component.
At the same time, also conduct a quick competitive analysis to ensure your program meets industry expectations for attracting and retaining top talent. To do so, repeat step four. If you find you need to offer different or upgraded benefits, go back to your leadership team and current providers to find the best fit for your business goals and employees’ needs.