Quick Look: Voluntary benefits possess an often underestimated value which SMBs have recently given a closer look due to their rise in demand. Individuals want personalized benefits which fit their current lifestyles even if it means having to pay a bit extra. As a result, run-of-the-mill health plans aren’t enough to stay competitive in today’s candidate-driven job market, and with open enrollment only a few months away, companies need to be prepared to come up with solutions customized to fit their employees’ needs.
Voluntary benefits are nothing new, though they’re often viewed as an afterthought when it comes to prioritizing which employee health benefits are most popular. Plus, they’ve often been limited to short-term disability and life insurance without further evaluation as to how and if this benefits employees. However, the variety and number of voluntary benefits are on the uptick as individuals are reconsidering their employment options and the benefits attached.
Standard medical and dental benefits are the baseline of what job candidates and employees expect from companies today. Though with the rising costs in health plans, the draw of supplemental benefits adds more personalized value to what their needs encompass. For instance, supplemental health insurance for critical illness leads the pack as the fastest-growing segment of voluntary benefits, due to new needs created by the pandemic, increasing from 16% of employees taking advantage of this option in 2021 to 27% of employees in 2022.
However, voluntary benefits can include everything from legal protection and pet insurance to identity theft and financial counseling. It’s up to employers to be mindful of these trends in their research and plan comparisons when finding the right fit for their clients. Those who leverage the expertise of a professional employer organization (PEO) partner gain an advantage through additional resources, expertise, and insights.
Today’s job candidates and employees know not every company offers the type of benefits they want, but if they look long enough, they’ll find one which will. As part of a comprehensive PEO strategy, HR experts at ExtensisHR can put together a voluntary benefits plan which will help keep their small- and medium-sized (SMB) clients competitive without burdening them with unsustainable costs.
Strengthens the competitive advantage
SMB leaders are already tasked with navigating increased health plan costs amidst record-high inflation to find a suitable and affordable solution for their companies. Prioritizing voluntary benefits adds a whole other set of challenges, but also possibilities, for them to consider. Often companies have similar employee health plans, but voluntary benefits are what can help set them apart. Without them, SMB employers are at a recruitment and retention disadvantage.
76% of employees say voluntary benefits impact their employer’s ability to retain them, and 63% of HR professionals believe voluntary benefits will actually save employees money. Factors such as negotiated group rates, fixed-cost, multi-year plans, and employer contributions all provide employees supplemental benefits at a less expensive rate when working with a PEO partner than if they were to seek the same benefits on their own.
Highlights a company’s overall value
Data shows 70% of employees agree they’re more likely to stay with an employer who offers voluntary benefits, though only 49% actually take advantage when offered. This underutilization becomes costly to the employer and doesn’t speak to the true value of a competitive compensation package.
To help mitigate this problem with a flexible, tailormade solution, SMBs can leverage the expertise of a PEO partner to make sure employees are getting what they need, when they need it. Here are a few ways to showcase the value of supplemental employee health benefits.
Provide benefits transparency
Though the demand for voluntary benefits is on the rise, employees aren’t always sure what’s available to them and how much out-of-pocket cost they’re responsible for. Therefore, valuable offerings often get overlooked or underused. A PEO partner like ExtensisHR takes care of all communications to alert and educate SMBs and their employees about new benefits and answer questions to help them choose the coverage which best fits their needs.
Add financial wellness to the mix
Medical and dental health benefits, in addition to 401(k) retirement contributions have always been part of standard benefits plans. However, in terms of an employee’s overall well-being, individuals place a high value on financial wellness benefits as well. A SoFi study found 48% of employees are more committed to staying with an employer who offered financial wellness benefits. Entertaining the idea of offering tuition reimbursement, student loan repayment assistance, and financial counseling is a way SMBs can stay competitive.
Tailor to workforce needs
When using voluntary benefits as a recruiting tool, SMB employers should focus on what their workforce needs and provide a variety of options to be as inclusive as possible. Working with a team of PEO experts is helpful when strategizing employee engagement opportunities necessary to receive feedback to make decisions regarding changing employee benefits. When partnering with ExtensisHR, employers can offer access to a full suite of voluntary benefits, such as legal services, student loan assistance, and fertility support, among its many offerings, which can be tailored as needed.
Integrate with core benefits
Many SMB employers plan to integrate all voluntary benefits into their core offerings to streamline the enrollment process. The goal is to provide employees with a greater understanding of all available benefits to maximize the offering and increase utilization. Since workforce demands are in a constant state of flux, and with benefits renewal and open enrollment right around the corner, now is the time to work with a PEO partner like ExtensisHR.
Working with a PEO can help decision-makers evaluate current offerings and determine which benefits to add, remove, or keep, while also anticipating needs, forecasting trends, and offering tailored strategies necessary for growth.
Empowering SMBs with a PEO Partner
Employees are reassessing the value of supplemental benefits to fill the gaps in today’s healthcare plans. Increasing healthcare costs, less coverage, and diminishing convenience when choosing medical providers don’t make medical benefits feel quite like the incentive they once were. SMBs must balance these market trends with workforce demands to source the kind of health coverage deemed the best value at any given time.
Voluntary benefits can enhance a company’s total benefits package and give them a recruiting edge to recruit and retain today’s top talent. ExtensisHR provides comprehensive HR services to plan, administer, and manage employee health benefits using cutting-edge technology powered by people-first initiatives. Contact our experts today.