Recruiting, Retaining & Rejuvenating Employees: Incentivize Top Talent with Voluntary Benefits
Faced with uncertainty about the potential effects healthcare reform will have on employee benefits, and the knowledge that budgets will not be increasing to cover current healthcare plans in the future, more HR professionals are looking towards voluntary benefits to create a robust benefits package.
According to the July 2011 Employer Healthcare Benefits Survey, 81 percent of the employers participating in the survey currently offer voluntary benefits to their employees. That figure is expected to increase as we move closer to 2014 when the Affordable Care Act is implemented and more employers begin to shift their traditional medical benefits to voluntary programs.
Leading up to 2014, HR professionals will continue to be challenged with restricted budgets, while being expected to retain employees and recruit new talent. According to the McKinsey & Co. Employer Survey on US Healthcare Reform, 30 percent of respondents who said their companies offered employer-sponsored health insurance said they would "definitely" or "probably" drop coverage after 2014.
Voluntary benefits can be the value-creating solution to bridge between the extremes of dropping existing health coverage and making no changes. Employers who offer voluntary programs like disability, long-term care, critical illness, and accident insurance with special underwriting concessions can demonstrate their concern for their employee's well-being by providing access to programs and rates they could not otherwise obtain on their own.
This is reflected in MetLife's 9th annual "Study of Employee Benefit Trends" where 64 percent of Gen Y (age 21 to 29), 66 percent of Gen X (age 30 to 45), 62 percent of "younger boomers" (age 45 to 54) and 66 percent of "older boomers" (age 55 to 65) understand that comparable products outside the workplace cost more.
In a recent survey of 5,200 workers conducted by CareerBuilder, 42 percent of workers are living paycheck to paycheck. Combine these financial concerns with rising healthcare costs, and you risk having employees that literally become sick with worry over their financial future.
Even if you are able to maintain your current employer-sponsored insurance coverage, offering your employees the ability to supplement gaps in their healthcare with voluntary benefits will demonstrate to each of your employees that you care about their health and financial security.
According to a national study on medical bankruptcy published in the American Journal of Medicine in June 2009, of the 1.5 million Americans who declared bankruptcy, 60 percent was due to medical bills, and of these 78 percent had health insurance. While the MetLife study revealed that employees are willing to pay to personalize their core benefits, savvy HR professionals should look to broaden the appeal of their benefits packages with nontraditional voluntary benefits, if they are to retain and reengage their talented employees.
In addition, creating a benefits package that includes exclusive benefits and perks will be attractive in recruiting talented, new employees. Importantly for HR professionals, the MetLife study also revealed that providing flexibility and a choice in benefits will also increase loyalty to the employer, especially with younger workers.
Providing a "choice of benefits that meet their needs is extremely important for creating loyalty" among 41 percent of Gen Y and 40 percent of Gen X employees, along with 30 percent of younger boomers and 31 percent of older boomers. Many nontraditional voluntary benefits provide employees with tangible benefits, which further increase their appeal as they can be used year round to obtain something that an employee needs, rather than the traditional core benefits that employees only utilize when they are sick or injured.
For example, offering college tuition assistance or the ability to obtain a computer through an employee purchase program demonstrates support for your employees' education while the company obtains a more highly educated staff. Companies that relocate or recruit nationwide can provide access to household furniture and appliances through purchase programs. Leadership development programs will help to develop star performers and contribute to their engagement and loyalty to the company.
In addition to improving employee loyalty and morale, voluntary benefits can support a company's HR objectives, and reinforce company culture. Offering gym memberships, subsidized health food vending machines, and access to purchase home workout equipment will reduce healthcare costs, reinforce a company's wellness program, and promote a healthy lifestyle.
Promoting regular fun gatherings such as potluck lunches, bagel breakfasts, or a departmental activity in a large firm, can encourage team-building and contribute to company loyalty. Voluntary benefits can help level the playing field, enabling smaller or startup companies to compete with larger, more established organizations for top-quality talent.
Small business owners can offer new employees the ability to customize their traditional benefits package with a variety of practical voluntary benefits, including a flexible spending account, pet insurance, credit union, and employee purchase program, without increasing the employer's costs or administrative burden.
Whether or not healthcare reform becomes one of the biggest influencers on employee benefits decisions, all HR professionals should start talking to their benefits broker about their voluntary benefits options. Look to your HR objectives and company culture to indicate which options will be utilized by current employees and make your package attractive during recruitment.
By spending the next 12 months researching and adding the most appropriate voluntary benefits for your company, you'll be in better shape to recruit and retain employees, when the implications of the healthcare reform bill unfold.
About The Author
Elizabeth Halkos In the past several years, Elizabeth has become a strong and influential leader in the field of voluntary benefits. She has been instrumental to the rapid growth and success of Atlanta-based Purchasing Power, and as an expert in the voluntary benefits industry has been featured in magazines such as Benefits Selling, Employee Benefit Advisor, Employee Benefit News, Health Insurance Underwriter and VoluntaryBenefitsMagazine.com.
She has written and spoken on topics including "The Evolution of Voluntary Benefits," "Communicating a Benefits Strategy" and "Voluntary Benefits as a Retention Strategy." Elizabeth was a presenter at the Benefits Selling Expo in Nashville in April 2011 and the EBA Summit in Dallas in September 2011. She has conducted numerous webinars for brokers and employers to educate them on voluntary benefits trends and improving communications of benefits in the workplace.
