Voluntary Benefits and Why Employers Should Offer Them
The coronavirus pandemic has greatly accelerated two recent and parallel trends in employee benefits. One is that more employers want to take a holistic approach to employee health and wellness. The other is that employees are increasingly looking to work for companies that show a culture of caring.
These trends, combined with other impacts of COVID-19 on the global workforce, have brought the value of so-called voluntary benefits to center stage. Employers should take note if they’re not already.
The Current State of Voluntary Benefits
Even before the pandemic, 41 percent of workers said they were likely to look for a new job with better benefits, according to Unum research. That percentage is even higher among the younger generations: 57 percent of millennials and 65 percent of Gen Z workers said they felt the same. Meanwhile, a recent employee benefits survey found that if employees had to choose between a high-paying job and a lower-paying one with quality health benefits, 88 percent would consider the lower-paying job. More telling, a majority (54 percent) of employees would “heavily consider” the tradeoff.
And employees are looking more closely at the benefits they’re being offered. During the last enrollment season, thanks to COVID-19, more than seven in 10 employees (71 percent) reported that they intended to spend more time reviewing their voluntary benefits. More than half (53 percent) planned to make changes to their benefits coverages.
No wonder 94 percent of employers now consider voluntary benefits part of their value proposition. That’s a massive increase from barely 33 percent of employers who felt the same way in 2018. When they were first introduced, voluntary benefits were considered icing on the cake. They were sweeteners to help close a deal with an employer buying basic medical (core) benefits. About a decade ago, the voluntary benefits market grew gradually, and then it exploded with a variety of supplemental benefit add-ons. Consider this: 63 percent of employers are adding child care benefits to their lineup this year.
Statistics to Consider
The subject of voluntary benefits has recently become a critical tool for employers to support employee mental health. It’s a topic that employers were just starting to focus on before the pandemic. This happened, coincidentally, when voluntary benefits were beginning to take off. The pandemic catapulted voluntary benefits into the spotlight. People everywhere were forced to work from home, social-distance, wear masks, and forgo most of their everyday social habits. Consider these telling statistics:
- In early 2019, SHRM’s annual Employee Benefits Survey found “slow but steady increases” in on-site stress-management programs provided by employers, compared to five years prior. Stress management programs were up to 13 percent and meditation and mindfulness programs were at 11 percent.
- Earlier this year, research by Randstad found that 41 percent of workers say their employers began offering new health- and wellness-focused benefits during COVID-19. Among those companies, “mental health assistance” was the third most commonly added benefit (13 percent). The number of companies adding benefits to support mental health was, in fact, statistically the same as for new “general health and wellness benefits” (14 percent). (At 20 percent, “flexible work hours” was the most prevalent new benefit.)
The increasing attention by employers to employee mental health is coming none too soon. Roughly two in five U.S. adults reported symptoms of either anxiety or depressive disorder during the pandemic—up significantly from one in 10 who reported these symptoms in the first half of 2019. The rate is even higher for essential workers (42 percent) versus nonessential workers (30 percent).
Developing an Effective Mental Health Initiative
These numbers shouldn’t alarm just HR and wellness professionals. All business leaders should take note. Why? Two reasons:
- The global cost of lost productivity, absences, and turnover caused by poor mental health is already estimated to be about $2.5 trillion annually.
- Employer investment in what one study called “effective mental health initiatives” can return an average of just over $4.00 for every $1.00.
So, where do you begin to find and implement an effective mental health initiative?
First, look for a solution that takes a four-part approach. You’ll need a solution that:
1) Takes a whole-person, whole-organization mindset
2. Includes tools and programs for all employees (not only those who are reporting mental health concerns)
3) Empowers employees and delivers practical insights to HR and wellbeing leaders
4) Has a human touch (support from experienced, dedicated service specialists) backed by solid science
To stay competitive in the new world of work, there really is no Plan B.