I recently heard a business owner describe his company’svoluntary benefits package as a “nice to have.” If that’s the case,I say get rid of the package and save both the aggravation andadministrative cost.

If you’re going to offer voluntary benefits, those benefitsshould be a fixed part of your employment package — part ofthe ala carte set of options an individual is entitled to as aresult of working for the company. People don’t call a 401(k) plana “voluntary” benefit. Why, then, should an optional life,disability, vision, and dental package be thought of as“voluntary”?

Voluntary benefits are part of a comprehensive benefits package;choosing to take advantage of them is simplyoptional.

Employers seek satisfaction and productivity from theiremployees. In our current “jobless recovery” economicenvironment, productivity is high, but satisfaction islow. The employer is in a quandary because cash flow is tight,so satisfaction cannot be bought through additionalcompensation. This is where voluntary benefits can prove souseful.

A 2010 study by SHRM found that job security and benefits arethe top two motivators of employee satisfaction. In fact,benefits have ranked in the top two since 2002. The challenge is tohelp voluntary benefits be perceived as benefits. If they’resimply marketed as a “nice to have,” they won’t be valued and, mostimportantly, won’t enhance employee satisfaction.

Employers should focus on some key elements in designing andoffering a voluntary benefits program. These ideas don’t addcost; they simply require attention and some effort.

• Choose those benefits that are most valued by the mostemployees. Medical, dental, life, vision anddisability insurance are the standard benefits sought by employees.They deal with contingencies outside the control of mostindividuals. Depending on the nature of the company’s work force,it may be productive to consider other benefits such as long-termcare, critical illness and even legal services. These mayfit, but there’s little value in offering them simply becausethey’re cute, catchy, or in demand by a vocalminority.

• Limit the benefits to those that can be understood andappreciated by most employees. I’ve seen companies’intranet pages packed with goodies and perks available through theemployer, but the trouble is that they tend to marginalize thetruly useful benefits. Should voluntary dental really be listednext to movie-ticket discounts simply because of their proximity inthe alphabet? A better way to assure employee satisfaction isto identify items that are part of the benefits package, then helpemployees understand how valuable they are.
• Educate employees about both the need for benefits andhow to obtain them. In addition to offeringvoluntary benefits, advisors have begun providing tools to identifyand quantify the need. For example, one carrier not onlyoffers life and disability insurance; it also provides a simpleinternet-based program to help employees figure out how much isneeded. From the employer perspective, just because thebenefits are voluntary doesn’t mean they’re not needed. Educating employees on the costs of uninsured losses is key toemployee satisfaction. Know the need to protect theneed.
• Time spent providing voluntary benefits is timesaved. We occasionally hear an employer complainabout the time lost in hosting employee benefitmeetings. A good case can be made that hosting thesemeetings actually represents time saved. Employee stress costsemployers an estimated $300 billion per year in absenteeism, lowerproductivity, employee turnover and direct medical and mentalhealth expenses, according to data from the American Institute ofStress. If some of the stress can be alleviated through meetingsduring which needs are identified, questions answered, andcoverages purchased, the employer is in a net positive position interms of productivity.
• When it comes to benefits education, one size doesn’tfit all. Employers want to choose how they inform theiremployees about benefits based on their own needs and how well theyfeel their workforce will respond to certain methods. Optionsinclude group meetings and one-on-one consultation; in addition,some carriers will provide all education and training services,removing the responsibility from the employer.

To be successful, employers need to be able to focus on runningtheir businesses. Unproductive, unfocused, and unsatisfiedemployees can really distract business owners.

In terms of benefits, these employee distractions can come inthe form of wasted time cruising the Internet for information anddeals, trying to sort out advisors from scoundrels, and stressingover not being able to obtain adequate coverage. When anemployer vets carriers, advisors, and benefits, offers a controlledenvironment where they can learn about and purchase these benefits,and, finally, makes it easy to obtain and maintain them, employeesatisfaction is a natural outcome.

Today’s Workers are Finding it Harder to Achieve theAmerican Dream, but those who seek help are more confidentin their ability to achieve their dreams.

Not only is it important to have voluntary benefits in place;it’s important to be able to access advice on thosebenefits. The Principal Well-Being Index, a quarterlyrelease, surveys both American workers at growing businesses andretired Americans.

The most recent survey conducted in May 2011 indicates thatwhile respondents believe the possibility of achieving the AmericanDream is more daunting than ever, the future does not seem as bleakfor Americans who seek the guidance of a financial advisor.Forty-six percent of workers who use an advisor reported thatthey’re confident, very confident or extremely confident in theirability to achieve their dreams for their financial future,compared with only 32 percent of workers who do not use anadvisor.

In addition, the first-quarter 2011 Well-Being Index showsemployees whose employers offer one-on-one benefit consultationsare among the most satisfied with their companies’ voluntarybenefits, with more than two-thirds reporting they’re satisfied orvery satisfied. Further, 67 percent of employees whose employersoffer one-on-one benefits consultations purchased at least onevoluntary benefit.

For additional information on these and other findings, visitwww.principal.com/wellbeing/.