Benefits are 1/3rd of your compensation costs – Are you offering the best options?
Last year, 41% of workers mentioned they were likely to look for a new job with better benefits. Of that number, 57% were millennials and 65% were Gen Zs. Considering these are the future of our workforce, it is no surprise that companies are prioritizing voluntary benefits. In the past, voluntary benefits were optional; now, they are required.
Freedom and personal wellbeing are two of the most sought after feelings for employees, the former of which can lead to stronger company performance. How can employers adhere to these needs in voluntary benefits?
Provide Customization Options
Unsurprisingly, your employees have different wants and needs. The most important factor when determining which voluntary benefits to provide is an understanding of your employee demographics. Employees who have been in the workforce longer, Boomers or Gen Xs, typically gravitate to better medical care and rehabilitation options whereas those newer to the workforce value benefits such as student loan forgiveness and more paid-time-off.
Due to COVID-19 and unemployment rates, hiring is becoming more competitive than ever to attract the best employees for the job. When you offer a multitude of benefits, your hiring pool expands and potential employees are more engaged.
What are some popular benefits options?
Voluntary Benefits You Should Offer Now
- Identity Protection: One unforeseen impact of Covid-19 has been hackers and scammers working incredibly hard to rob people for their stimulus payments and unemployment benefits. The amount of coronavirus phishing emails has gone through the roof and even watchful consumers can be tricked. Providing some form of identity protection with your benefits is a great way to help your employees feel more secure.
- Employer-sponsored Loans: The past few months have been hard on everyone and providing employer-sponsored loans can protect your employees who need money now and in the future. Without this benefit option, they may fall prey to predatory loan offers. Providing this benefit to employees can give them the sense that you care about both their financial and personal wellbeing.
- Legal Insurance: This pandemic has led to many arguments between landlords and tenants about rent and has caused many evictions. It is inevitable that legal issues will arise during these troubling times and offering monthly costs for legal insurance can make employees feel more secure.
- Mental Health Support: Mental health has been an important subject of the pandemic. The CDC itself discussed how the effects from this pandemic can both exacerbate and cause mental health issues. Providing your employees with support for mental health-related expenses. In the past, on-site gyms or napping areas were common benefit options that could have a positive impact on mental health, but with social distancing guidelines in place, it’s important to get creative with what is offered.
- Healthcare Claim Management: Given that the world is in a pandemic, hospital rates have jumped and injuries or illnesses are widespread. Healthcare claim management benefits can help employees by using a third-party option to review medical claims and ideally get more coverage. During a time of medical uncertainty, this option can help your employees to feel more secure.
Revisiting the ROI of Voluntary Benefits
Benefits are typically looked at as a major expense. The Bureau of Labor Statistics found that benefits represent 1/3 of an employers’ total compensation cost. This makes consistent evaluation of benefits offered, voluntary or otherwise, a high priority. Try to review your voluntary benefits quarterly and identify those key metrics that can help guide your benefits choices in the future.
What metrics should employers look at?
Are most of your employees eligible for all of the benefits offered? If not, are the eligibility terms too steep? If so, there may be room to cut certain benefits and introduce ones that are more valuable for your employees.
Looking at your enrollment data can tell you which benefits are getting utilized and which aren’t. Not all benefits require an enrollment or have an enrollment period. Outside of the enrollment period, keep note of which employees ask about these benefits as this gives an indication to the need from your employees.
Similarly to enrollment data, looking at just how the benefits are being utilized and to what extent can help you make cost decisions and focus on only certain aspects of the benefits. The higher the utilization, the more valuable the benefit.
While this is not 100% correlated to benefits, the data tells a great story. If you have a high turnover rate, there could be a correlation to the benefits you provide vs. other hiring companies. Compare those who have moved on to new careers and the benefits they utilized.Use these metrics to keep an eye on which offerings are not valued and weed those out. Take a look at the eligibility data with your turnover rate and utilization rate. Are there assumptions you can make? In the end, it’s more important to offer a good design of benefits that work together and are utilized.
Keep in mind your post-pandemic benefit suite may look different than pre-pandemic. Needs change and benefits can be dynamic. As you review the metrics, don’t forget about how you communicate the benefits to your employees. This can play a big role in their overall utilization. To have the best ROI on your benefits, provide a customizable suite of benefits and communicate them proactively to new and current employees.