Much like a firefighter, tutor, or party planner employee benefits can be voluntary. What’s more, these voluntary benefits are vital to elevating your total employee benefits package.
Voluntary benefits provide a business with the ability to offer compelling benefits to their employees with little or no cost to the company itself. This trait makes voluntary benefits a uniquely valuable asset to your firm.
What are voluntary benefits?
Voluntary benefits are employee benefits that an employee can purchase from their employer. Usually, businesses provide these benefits to employees at little or no cost to the employer.
Generally, employees can purchase these benefits at a reduced, group rate. This setup provides increased value to employees, which in turn makes them more important for employers too.
Employers are allowed to offer a more robust benefits package at no additional cost to themselves. Employees, meanwhile, can secure improved coverage at a reduced price, compared to purchasing individual coverage.
Pros for Employers
The first advantage that voluntary employee benefits provide for your company is that they improve your overall benefits package.
This improvement, in turn, boosts your recruiting and retention. Voluntary benefits fill the gaps in coverage that primary health insurance leaves open, and provides more overall value to your employees.
Critical illness, for example, covers policyholders in case of a major illness that would otherwise leave them with an unfathomable medical bill. This coverage can be the difference between a benefits plan that fails an employee, and one they walk away feeling grateful they have.
Similarly, if your company offers quality voluntary benefits, it can be a difference maker for recruits. In a recent survey, 62 percent of employees under 50 years old wouldn’t consider taking a job that doesn’t offer voluntary benefits.
A subpar voluntary benefits offering could drive potential rock star employees away from your business in the first place. If your company is unable to attract top-tier talent, your firm’s growth potential will be limited.
Additionally, the boost voluntary benefits can give your recruiting and retention rates, make them a potential money saver. The less turnover you have, the less your business has to spend recruiting, hiring, and training a replacement.
Avoidable turnover can be a huge expense for companies. The Work Institute’s 2017 Retention Report, estimates that it costs as much as 33 percent of a worker’s annual salary to replace them.
Another advantage for employers is that these benefits encourage preventative care for your employees. Preventative care helps your employees stay healthier, which decreases overall health care costs, for your company.
Those who don’t have dental insurance, for example, are 2.5 times more likely to not visit the dentist. This number is logical, but the consequences of not seeing a dentist can include an increase in cardiovascular disease, diabetes, Alzheimer’s and more.
Something as simple as regular dental checkups can be the difference between your staff, and your business paying thousands of dollars in future medical expenses.
Pros for Employees
There are almost as many advantages of voluntary benefits for employees, as there are for employers. The first advantage these benefits offer employees is convenience.
Voluntary coverage is usually paid through payroll deductions. These deductions make it easy for employees to pay for their benefits. Your employees don’t have to worry about setting aside a portion of their paycheck or sending in a monthly payment.
Similarly, because voluntary benefits are paid for through payroll deductions, some can be paid for with pre-tax dollars. FSA, HSA, and HRA contributions can all be paid for using pre-tax money.
Using pre-tax money to pay for these benefits decreases an employees’ overall taxable income. A decrease in taxable income subsequently reduces an individual’s or family’s total tax burden.
Another advantage for employees is that voluntary benefits can relieve financial stress and stress overall. Voluntary benefits such as life or disability insurance protect you, or your family, financially in case of a tragedy.
Also, because most employers can offer voluntary benefits at a group discount, employees save on their chosen benefits. Group rates allow employees to purchase voluntary benefits at a lower rate than they otherwise could, individually.
The final advantage these benefits give your employees is a choice. One of the biggest pluses of voluntary benefits is just that, they’re voluntary. This choice allows your staff to pick the benefits that they want, rather than their employer picking for them.
Voluntary benefits give your employees a level of autonomy in their overall benefits plan. Your staff gets to decide what combination of benefits works the best for themselves and their families.
Voluntary benefits have a plethora of pluses for both employers and employees. Many organizations don’t take full advantage of these offerings.
Don’t let gaps sink your employee benefits plan. Plug them with voluntary benefits.
*This is the first of two weeks The Olson Group blog will feature a discussion about voluntary employe benefits. Check in next week for an extensive list and description of the top voluntary benefits offerings.