Voluntary benefits are the big thing right now in employee recruiting and retention. So much so that general agencies like BenefitMall are going the extra mile to encourage brokers to put more time and effort into developing voluntary benefits options. But as BenefitMall points out, just offering voluntary benefits and leaving it at that may not be enough.
BenefitMall's assessment is backed up by a 2022 survey showing that, while the majority of American workers would prefer to work for companies offering voluntary benefits, fewer than half actually sign up for such benefits when they are offered. So what's going on?
Workers Don't Understand Their Benefits
The survey in question was conducted by Voya Financial during the first week of January 2022, among 1,005 U.S. adults. Here are some of the more interesting findings:
- 70% of all benefits-eligible workers would like to work for employers offering voluntary benefits
- 78% of working millennials would prefer employers offering voluntary benefits
- 51% of millennials offered voluntary benefits do not actually use them
- 74% of working adults say their money doesn't go as far as it used to
- 31% of working adults with benefits report not understanding the benefits they signed up for.
That last statistic is key. It explains everything. Workers who want voluntary benefits don't sign up for them because they do not understand what they are getting. They barely understand their health insurance and retirement plans – if they understand them at all – so expecting them to grasp voluntary benefits may be too much.
They Don't Understand Their Money, Either
Exacerbating the voluntary benefits issue is the fact that fewer American workers than ever before have a solid grasp of basic financials. They don't understand their money. They do not understand how to budget, how to save, etc. They have no clue how inflation works or how it reduces their purchasing power. As for planning for the future, forget about it.
All of this is borne out in the demand for financial wellness benefits. Put another way, employers are increasingly discovering that their workers need help with basic financial planning skills. Offering the help can be accomplished through a voluntary benefit.
The thing about voluntary benefits is that they are paid for entirely by employees. Employers don't contribute financially. Their part is to sign up for group benefit they can turn around and offer to employees at a reduced cost. But the employees themselves still bear the entire cost.
For an employee who doesn't know how to manage his money yet still realizes his purchasing power is falling, paying for yet another benefit isn't doable. It is difficult to justify buying critical illness coverage when you are having trouble making ends meet.
More Than Anything, They Need an Education
Carriers, general agencies, brokers, and employers have reached a consensus that voluntary benefits are necessary to recruit and retain employees. Employees themselves say they are more likely to take jobs with companies that offer voluntary benefits. That is fine, but what employees really need is an education.
Before they even look at a list of voluntary benefits, they need an education on how such benefits work. They need to know how the benefits are paid for, what they are getting for their money, etc. On top of it all, they need an education in fiscal management.
As long as employees cannot understand their benefits, offering new options isn't going to help. The proof is in the pudding. If a company is offering voluntary benefits and people are not signing up for them, there is something wrong.