The voluntary benefit industry is poised for accelerated expansion and increased adoption over the next decade as talent attraction and retention continue to be top priorities for employers, according to Trey Loughran, chief executive officer of Purchasing Power®, a voluntary benefit company that offers the leading employee purchase program.
“In this increasingly competitive labor market, benefits are a key driver for employee satisfaction and recruitment. Benefit packages today must include both traditional insurance and retirement as well as non-traditional benefits in order to attract and retain employees,” Loughran explained. Just over 40% of all workers say they are likely to look for a new job with better benefits. That percentage increases dramatically for the younger generations in the workforce – 57% of Millennials and 65% of Gen Zs report the same,1 which combined represent nearly 40% of today’s workforce,”2 he added.
The last decade saw the voluntary benefits industry expand from essentially insurance-related products to a variety of non-traditional voluntary offerings, driven by employees’ desire for more customized benefits. Toward the beginning of 2010, voluntary benefits were primarily insurance-related such as gap coverage, short-term disability, dental, hospital supplemental, cancer and critical care coverage, and vision care. Among the early non-traditional benefits were legal insurance, pet insurance and employee purchase programs. As the decade progressed other innovative benefits came on the scene, such as identity theft protection, student loan benefits, elder care services, foster care assistance, and financial wellness benefits.
Looking to 2020 – and beyond – Loughran predicts four major trends impacting the voluntary benefit industry:
1. Continued Growth of the Voluntary Benefit Industry.
As the decade ending in 2019 has shown us, employees have indicated that “standard” healthcare and life insurance benefits are no longer enough. Employees have chosen to add various voluntary products to their employee benefits package, mostly at their own expense, in order to have benefits that meet their diverse desires and needs. With Millennials and Gen Zs taking over more of the workforce, and wanting benefits “their way,” the voluntary benefits industry will grow as employers include additional voluntary offerings and as employees choose to add more to their benefit package.
2. Even More Customized Benefits.
Customization will continue to be paramount and there will be new offerings added to the voluntary benefits portfolio. Popular types of voluntary offerings include work-life balance, lifestyle and financial wellness benefits, so expect more of these on the horizon. For example, in 2019 Dentons began offering breast milk shipping for staffers traveling on business; Starbucks bolstered fertility and included surrogacy benefits; and MassMutual added coverage of gender identity procedures and expanded fertility benefits.3
3. More Employers Will Offer Student Loan Repayment Benefits.
There is no question student loan debt repayment benefits will be added to more companies’ benefits packages over the next few years. While only 8% of employers are currently offering this benefit,4 more than one-third of employees (and 55% of Millennials) say it is a “must-have.”5
4. Financial Wellness Benefits Will Continue to be Developed and Blossom.
Employers today realize that their employees’ concerns about money while at work has its consequences in terms of productivity. Half (50%) of employees have experienced stress about their finances on the job in the past year, and this number is even higher for Gen Z (76%) and Millennials (62%).6 In addition to the financial wellness and education benefits the industry has seen in the past decade, in 2020 and in the years to come more employers will adopt more benefits. Offerings that will be more readily available next year include instant pay benefits, payroll advances, low-interest installment loans and automated, payroll-deducted savings accounts that help employees living paycheck-to-paycheck with unexpected expenses without resorting to high cost debt. More employers will adopt benefits like employee purchase programs that help employees purchase consumer products and services through payroll deduction when they are unable or prefer not to use cash or credit.
“The future is bright in 2020 and the coming decade for voluntary benefits – both for employers who offer them and for the employees who choose them,” Loughran concluded.
Sources:
1, 5, 6 Unum, Online Poll of 1,512 U.S. working adults, Aug. 2019.
2 Catalyst, “Generations-Demographic Trends in Population and Workforce: Quick Take,” Nov. 7, 2019.
3 Employee Benefit News, “42 Employers that Boosted Their Benefits in 2019,” Caroline Hroncich, Oct. 28, 2019.
4 SHRM 2019 Employee Benefits Survey, June 2019.