Research Summary: Voluntary Benefits in Today’s Workplace

A path to improved retention, workplace experience and employee engagement

          

In an age of labor scarcity, offering competitive voluntary benefits is a viable way to attract and retain the best talent. Does your organization provide attractive voluntary benefits?

In an effort to learn more about the state of voluntary benefits in today’s workplace, HR.com’s HR Research Institute partnered with identity protection firm InfoArmor to survey today’s HR professionals and learn more about the prevalence of voluntary benefits, their composition, and strategic value.

Nearly nine out of ten (87%) of responding HR professionals say their organizations offer some type of voluntary benefits to employees.

Among companies that offer voluntary benefit options, these four are most common:

More than half offer two other benefits: accident insurance (58%) and critical illness insurance (51%). Just 37% offer financial counseling, suggesting such programs are not yet as mainstream as the others.

To gain greater insights into the utilization rates of specific voluntary benefits, participants were asked about five voluntary benefits. Of these five, critical illness benefits were the most widely offered (61%), but long-term care insurance was the benefit employees were most likely to sign up for.
 

As employers find themselves competing in a tight labor market, they may need to increasingly rely on compensation and benefits programs to attract qualified job candidates.

Fifty percent of the organizations offering voluntary benefits describe them as very important, and most of the rest (43%) say they are somewhat important. Only 8% say voluntary benefits have little or no importance in their organizations.

Seventy-one percent of the organizations offering voluntary benefits say attracting and retaining employees is the primary strategic benefit to their voluntary benefit offerings. It is cited by 79% of large organizations and 73% of mid-sized organizations.

Two in three (67%) participants also cite protecting employee financial well-being as a strategic advantage to their voluntary benefit programs.
About half of HR professionals say improving the employee experience (48%) and helping with work/life balance (47%) are strategic benefits of their voluntary benefits programs.

When organizations see voluntary benefits as very important, they also tend to see higher strategic value in the programs.
 

Culture is the most widely cited driver as organizations consider which voluntary benefits to offer. Culture varies from organization to organization. No other aspect to organizations can be as specific and unique as culture, even within the same industries. Culture is also the most commonly cited driver among the considerations used to decide which benefits to offer (56%).

Open enrollment, especially when new benefits or new providers are added, can involve complex logistics and communication challenges. Planning is essential. However, six months or less of lead times seem sufficient for most organizations. Seventy-seven percent say they plan open enrollment in two fiscal quarters or less.

The size of the organization appears to influence the time needed for open enrollment planning. The larger the employer, the more complicated open enrollment is and the fewer that can pull it off in a short timeframe. Almost three-quarters (73%) of small organizations need less than one fiscal quarter to plan for open enrollment, compared with 51% of the mid-sized and just 40% of larger organizations.

The most frequently cited frustration is that employees miss the open enrollment deadline.

For instance, 49% of participants in large organizations say their top frustration is with employees missing deadlines, compared with 46% in mid-sized and 39% in small employers. There is a similar set of differences in communicating the value of benefits: large companies (46%), mid-sized (41%) and small companies (25%). It’s likely that the larger the company, the larger the communication and motivation issues become.

Half of the participants say their employees are willing to pay 100% of the cost of their voluntary benefits. Just 27% say their employees are willing to pay less than half of the costs. This suggests that the costs of providing voluntary benefits will be relatively affordable for many organizations.

To learn much more about the survey results and insights and for strategic takeaways on how organizations can make the most of their voluntary benefits, we invite you to read the complete report.