Well-designed benefits plans should be based on the desires and needs of employees in addition to supporting the employer’s business objective of providing a benefits package that aids in recruiting and retaining its workforce.
Once considered just a nice extra for a more comprehensive benefits package, voluntary benefits are now an essential element of the employee benefits program because they allow workers to customize their benefits and assist with the employee’s overall financial wellness.
There’s no doubt financial wellness is a concern for most of today’s employees. In a July 2014 Harris Poll on behalf of Purchasing Power, 80 percent of employees working full-time said they have financial stress today. Their stress is related to both long-term and short-term financial needs. Specifically, 67 percent indicated the stress is related to long-term financial needs (savings, retirement plan, etc.), while 60 percent said it was short-term related (everyday living expenses as well as unexpected financial needs such as a car repair, appliance replacement, or emergency medical expenses).
With such varying concerns among employees, employers need to know what voluntary products will most benefit their workers’ demographics. Today’s workforce spans three generations from millennials to baby boomers that look at work, life, money and finances in totally different ways. Likewise, they have different benefit needs and with voluntary benefits, workers can choose what suits their particular situations.
Traditional voluntary benefits are mostly self-explanatory. Let’s consider the growing list of non-traditional voluntary benefits in the marketplace today which give a wide scope of opportunity for meeting employees’ needs. Based on focus groups with employees from all generations, here are the non-traditional voluntary benefits that help address their financial situations.
Baby boomers (born 1946 – 1964)
Baby boomers are worried. For the most part, if there’s something baby boomers want, they are able to buy it. However, many will question if they should buy it or rather save that money. Instead, they are trying to be financially responsible and scaling back from a materialistic lifestyle. Baby boomers, even if they are high earners, worry about retirement – both having enough money for retirement and wondering when the right time is to retire.
Non-traditional voluntary benefits that would appeal to baby boomers include:
- Discount Programs
- Financial Counseling
- Legal Assistance
- Group Auto Insurance
- Home Warranty Insurance
- Wellness Programs
- Long-Term Care Insurance
Generation X (born 1965 – 1979)
Generation X is stretched thin. Gen Xers’ work ethic is balanced and flexible with a “work hard, play hard” attitude. This generation’s financial stressors come from multiple angles. They are raising children, preparing for care of their aging parents and trying to save for their own financial futures. They appear to be having the toughest time financially. They find it difficult to meet their household expenses on time each month and are the most likely to carry balances on their credit cards.
Non-traditional voluntary benefits that would appeal to Gen Xers include:
- Discount Programs
- Employee Purchase Programs
- FSAs
- Financial Counseling
- Wellness Programs
- EAP
- Child Care
- Cyber Security Insurance
- Homeowners’ Insurance
- ID Theft Protection
- Long-Term Care Insurance
Millennials (born 1980 – 2000)
Millennials are confused. They often juggle many jobs and move from job to job frequently. Their greatest fear is silence, unplugging, routine and eternal internship. Keys to job retention for millennials are personal relationships, multiple tasks and fast rewards. Their benefits needs include portable benefits, forced savings, financial education and concierge services. Key values for millennials include future financial security and better quality of life. To improve their financial situation, they need a better job or a promotion and expert advice on how to make the most of their money in addition to beginning a 401(k) or other retirement plan. The average millennial has $29,000 in student loan debt alone. Not surprisingly, they are also more worried about getting rid of or incurring additional debt than their day-to-day expenses.
Non-traditional benefits that would appeal to millennials include:
- Employee Purchase Programs
- Discount Programs
- Tuition Assistance
- Employee Assistance Program
- Wellness Program
- FSA
- Financial Counseling
- ID Theft Protection
By recognizing the value in voluntary benefits and adding to their voluntary offerings, employers not only can provide for their employees’ financial wellness, but can retain a loyal, motivated workforce as well.
Elizabeth Halkos is chief revenue officer with Purchasing Power.
