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The Value of Voluntary Benefits

The Value of Voluntary Benefits

| July 14, 2023

We guide business owners to enhance employee productivity by using voluntary benefits that could improve financial wellness. Financial stress negatively impacts workplace productivity, causing distractions, absenteeism, and high turnover rates.

Statistics provided by MetLife show that one in three employees openly admits to reduced productivity due to financial stress. Furthermore, data from the American Society of Pension Professionals and Actuaries (ASPPA) shows 50% of employees encountered financial stress within the previous year. That figure increases for younger generations, with 76% of Gen Z and 62% of Millennials facing some form of financial stress.

Money-induced disruptions pose significant challenges for employers, highlighting the need to address employees' financial well-being. Organizations must explore strategies and support systems to help enhance their employees' financial wellness, which, in turn, may improve overall productivity.

Situation Analysis

Talent attrition witnessed a significant surge following the pandemic. McKinsey and Company noted that 40% of employees might quit their current job in the next three to six months, and 85% reported the pandemic negatively impacted their well-being. The Wall Street Journal also highlighted the rising transition of self-employment to break free from the confines of corporate red tape and enjoy more flexibility.

Still, the demand for highly skilled talent in organizations is increasing. Companies may need to prioritize talent retention and acquisition strategies to combat this trend. Voluntary benefits can make a pivotal difference, even in the face of heightened talent attrition.

Going on the Offensive

 A post-pandemic health and well-being survey conducted by XcelHR reveals:

  • 72% of employees prioritize the safety and well-being of themselves and their families.
  • 62% of workers believe employee benefits are increasingly significant due to the pandemic.
  • 60% of employees desire a broader range of non-medical benefits for individual purchases from their employer.
  • 51% of workers want employers to have a substantial role in ensuring the safety and well-being of employees and their families.
  • 39% of employees report that their employer doesn’t offer benefits or programs to support their well-being.

The need for implementing a comprehensive voluntary benefits program is apparent from the statistics. We provide straightforward and impactful strategies to meet your employees' needs and also to benefit your organization.

Why Offer Voluntary Benefits?

Voluntary benefits provide several tangible advantages, enabling organizations to attract and retain workers at all stages of their careers. Using statistics from Willis Towers Watson's 2018 Voluntary Benefits and Services Survey, we established that voluntary benefits have the potential to:

Enhance Core Benefits Through Personalized Options

About 79% of organizations enrich their core benefits by offering personalized options. This approach empowers employees to choose voluntary benefits that align with their unique needs and preferences, increasing their satisfaction and well-being. It also demonstrates a commitment to individuality, fostering engagement, and attracting top talent in a competitive job market.

Retain A Multigenerational Workforce

Data from the Willis Tower Watson survey shows 75% of organizations find voluntary benefits effective in retaining employees from different generations. The approach recognizes each generation's unique challenges and aspirations. It addresses flexible work arrangements, professional development opportunities, wellness programs, and financial incentives.

Support Employee Financial Wellness

Approximately 74% of organizations find voluntary benefits effective in addressing employee financial needs. The programs and options include retirement savings plans with employer matching contributions, financial planning assistance, access to affordable loans or credit, and financial education resources. Employees can better manage their finances, plan for the future, and reduce financial stress. This helps to improve their overall well-being, job satisfaction, and productivity.

Attract New Employees

According to the survey, 67% of organizations found voluntary benefits instrumental in attracting top talent. Job seekers increasingly seek voluntary benefits that address their holistic needs. When they include the offer in the recruitment phase, it helps to show the organization's competitive edge and commitment to supporting employees' physical, mental, and financial health.

Improve Employee Retention

According to the survey, 65% of businesses attribute voluntary benefits to reduced turnover rates and a motivated, stable workforce. Voluntary benefits cultivate employee appreciation and satisfaction, thus enhancing the potential of long-term retention. Workers are more likely to stay with the organization long-term when they feel valued and supported.

Developing an Employee Financial Wellness Program

Voluntary benefits reduce financial stress and enhance employee value, support, and satisfaction. However, their success relies on organizations creating tailored financial wellness programs suitable for their workforce.

A successful employee financial wellness program should adopt a holistic approach, offering benefits, financial education, and needed professional assistance. We have identified six core components that achieve these three primary objectives to guide organizations with different needs in developing a custom financial wellness program.

Provide Access Core and Expanded Benefit Offerings

Include packages that align with your core values and resonate with your workforce.

Create Awareness through In-Person and Online Education Resources

Invest in your workforce's financial literacy by organizing workshops, hands-on training, and e-learning. Empower your employees to take control of their finances and embrace effective financial management strategies.

Provide Assistance and Guidance. Incentivize Good Behavior

Partner with a financial consultancy firm to provide advice, guidance, and planning services to your employees at subsidized rates.

Questions and Concerns

As always, we’re here to assist with everything discussed in this article. Team SKG has a team of professionals experienced in financial literacy. We believe in keeping your employees informed about all facets of their financial health, including voluntary benefits. Contact us today to learn more!