An attractive employee benefits program can help your organization stand out, attract top talent and boost overall employee satisfaction. To affordably expand your current package, you might consider providing voluntary “digital benefits.”
These benefits offerings are a collection of both insurance and non-insurance products that can be purchased by employees through their employer, often at a lower rate than if they purchased the same products on their own. Employees can opt into the offerings of their choice, allowing them to customize their total benefits package at a minimal cost to your company.
“The demographics of the U.S. workforce are changing, thus changing what ‘standard’ benefit packages look like,” said Marcie O’Dwyer, vice president of business development at Associated Benefits Consulting. “MetLife’s 2020 Benefits Survey reported over 60% of Gen Z and Millennials are interested in a benefit their employer currently does not offer. However, very few employers are currently offering emerging benefits outside of traditional health and retirement [plans].”
What are digital benefits and how do they work?
Digital benefits are typically purchased directly by employees and contractors through an online marketplace set up by the employer. Unlike traditional health insurance and retirement programs, which are largely covered by the employer, digital benefits are paid for primarily by the employee themselves via payroll deductions.
Some common voluntary benefits include life insurance, dental or vision insurance, critical illness insurance and accident insurance. Other programs include identity theft protection, travel insurance and pet insurance.
Because of group enrollment discounts, businesses can often secure lower rates for voluntary benefits than an individual purchaser would, making it a bargain for employees. However, since the employee covers most of the cost, it’s also highly affordable for an employer.
The demographics of the U.S. workforce are changing, thus changing what ‘standard’ benefit packages look like.
Marcie O’Dwyer, vice president of business development, Associated Benefits Consulting
Should you offer digital benefits?
If you’re wondering whether digital or voluntary benefits are right for your company, here are just a few good reasons to explore this offering:
Boost retention and recruitment
Offering comprehensive digital benefits allows employees to customize their package to suit them, which can help attract and retain talented workers. This is especially important for employees who may be looking for voluntary benefits to support their loved ones and offer a better work-life balance.
The simple act of offering these digital benefits can form a positive association for the employee, according to O’Dwyer.
“Often these digital benefit marketplaces are branded with the employer’s or sponsoring associations’ logos,” she said. “The employee/member associates these benefits with their employment/membership, which fosters retention and recruitment."
Affordably offer a wider range of benefits
Digital benefits come at little to no financial burden for the company. Employees who opt into voluntary benefits are responsible for most or all of the cost. Employers only need to cover administrative fees, which are typically low and can be offset by payroll tax savings.
Improve employee well-being
Employee stress and burnout can have a significant toll on productivity and job satisfaction, especially in today’s remote work environment. As a result, employers are increasingly taking steps to focus on promoting wellness and work-life balance. Voluntary benefits that alleviate stress and uncertainty, such as life or accident insurance, mean employees can worry less about the “what-ifs” and worst-case scenarios.
Fill in health insurance gaps
As healthcare costs continue to rise, it is becoming increasingly expensive for employers to offer their teams high-quality, cost-effective health insurance. High-deductible plans can help employees and employers looking to save money, but they offer few benefits. Voluntary digital benefits can help fill in some of the gaps, including vision and dental insurance or long- and short-term disability insurance. This allows organizations to effectively control their health insurance rates while giving employees the types of coverage that are typically found in higher-cost plans.
How to develop a voluntary benefits program that works
Not sure where to begin with your voluntary benefits package? O’Dwyer recommends surveying your employees to get a sense of which benefits they might want to see in the future, as well as researching opportunities to leverage digital benefits to attract and retain the current millennial and Gen Z workforce.
O’Dwyer also advised analyzing your current benefit plan costs and utilization.
“Use this information to identify creative benefit solutions focusing on improving your employees’ overall health … by incorporating voluntary benefits and non-insurance products to help decrease employees’ out-of-pocket costs,” she told CO—.
Finally, it’s important to ensure that your employees are aware of the offerings you do have. Doing so not only encourages your employees to take advantage of digital benefits, but also shows you are listening to their suggestions and care about their well-being.
“Communicate often and routinely with your workforce, reminding them of the benefits currently offered and their respective value,” O’Dwyer said. “Use as many different forms of communication as possible.”
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