Since at least 2015, popular publications have claimed that employee benefits are mandatory for the survival of businesses, especially small businesses. Survey data, however, does not back up this claim. In fact, you can have a fully functional workforce without offering voluntary benefits to your employees. Where are voluntary benefits really mandatory? If you want to become a leader in your industry.
Low Unemployment has Changed the Nature of Hiring
Across the United States, there aren't enough skilled workers for the open jobs in many industries. The demand for skilled employees in those industries--and, indeed, in many arenas--has substantially outstripped the availability of those employees. As a result, the nature of hiring has changed dramatically.
The top talent in most industries have become passive job seekers. They're not currently looking for a job, but they're open to the idea of a new position if one comes their way. Some of them keep their resumes updated and feelers out just in case, but many of them wait for those offers to come to them--and they know that it will.
As an employer, there are two key things that you need to keep in mind: first, that you need to create an offer that will get passive job seekers to quit their jobs and come to you; and second, that headhunters are contacting your top talent and trying to draw them away. If you aren't offering them incentives to stay, they may quickly be drawn to another employer.
The Rise in Voluntary Benefits
In an effort to attract top talent, more and more companies are adopting voluntary benefits. In a 2017 survey of large employers, 69% indicated a belief that voluntary benefits will be a very or more-important component of the total rewards strategy offered to employees within the next three to five years. In a 2018 study by another company, 42% of employers already offered some voluntary benefits. The goal of these employers is to attract the right employees to their businesses--and to keep their top talent in their positions.
The Problem with the "Voluntary Benefits are Mandatory" Argument
In spite of the number of employers who believe that offering voluntary benefits is becoming increasingly important, the above study actually demonstrated that the number of employees accepting voluntary benefits has declined since 2016. In fact, at its height, only 22% of employees actually elected to include those voluntary benefits. Less than half of businesses surveyed offered voluntary benefits--and these are the numbers cited by recent articles arguing in favor of the "voluntary benefits are mandatory" statement. One potential reason? It could be because those employers are failing to get the savings available when accessing benefits through an Outsourced HR Partner.
When Voluntary Benefits are Mandatory
While you may not need to offer voluntary benefits in order to keep an effective workforce, there are times when you'll find that voluntary benefits really are mandatory for you as an employer. Top talent wants to see a comprehensive benefits package even if they choose not to accept it. That benefits package must at least equal the benefits package that the top talent is already receiving at their current place of employment.
Your business can function without great voluntary benefits--but top talent is going to lend you a major competitive advantage. If you don't have those critical voluntary benefits, you're not going to attract those passive candidates who are the top talent in their fields.
What Does That Mean for Your Business?
Contrary to popular headlines, voluntary benefits are still, in fact, voluntary for businesses that are looking to perform at the industry average. If your goal is to become a leader in your industry, however, those voluntary benefits are no longer voluntary. To become an industry leader, you must be able to offer to hire top talent--and that means offering benefits packages that are able to match or beat the competition. Most employees won't use those voluntary benefits even when they're offered--but the top talent in your industry may be within the group that is actively using those benefits.
If you want to keep the top talent in your business and prevent them from being poached, offering those voluntary benefits could be one of the most critical parts of that process. Do you need to make those benefits more affordable? Partner with an HR outsourcing company like Professional Employer Organizations. If you have more questions about lowering the costs of voluntary benefits, contact PRemployer today.