Recruitment and employee retention with voluntary benefits

Replacing an employee isn’t cheap. The Society for Human Resource Management (SHRM) reported that on average it costs a company 6 to 9 months of an employee's salary to replace him or her. For an employee making $60,000 per year, that comes out to $30,000 - $45,000 in recruiting and training costs.¹ Long story short: retaining employees matters.



Adding to the challenge of retaining employees is the fact that, today, employees have more options than ever. COVID-19 has turned many peoples’ homes into their offices. And that change means they’re no longer as geographically restricted – if the office is at home, then the company you work for can be based anywhere! Top tier talent doesn’t just have to choose from the companies in their area, since they can work from anywhere, they can now be recruited by anyone.

So, how do you attract and, just as importantly, keep employees? Simple: voluntary benefits! While, sure, that’s not the only answer, voluntary benefits are certainly part of the answer. Here’s why:

The benefits, of course

The simplest answers are sometimes the best ones. Voluntary benefits help with recruitment and retention simply because employees want them. For employees under age 50, 62 percent would not take a job if voluntary wasn’t offered.²

On top of that, the pandemic has only served to further highlight the need for financial protection from out-of-pocket healthcare costs. A recent survey found that 54 percent of employees are anxious about healthcare costs that may not be covered by health insurance.³ That just so happens to be what many voluntary benefits are all about.

Keeping up with the Joneses

If, as an employer, you’re not offering voluntary benefits, there’s a pretty good chance your competitors are. More than 70 percent of employers offer benefits in the interest of retention, while over 50 percent specifically design their benefits to attract new talent.⁴ As we’ve already pointed out, employees want these benefits, so it’s safe to assume voluntary is part of the benefits equation for most of your competition when looking to hire and retain employees. 

Voluntary benefits are proven to boost loyalty

There are oodles of studies showing the correlation between employee loyalty and benefits satisfaction some of the most recent ones, coming from Benefitfocus show that employers could see a reduction in employee turnover of up to 8% when employees are enrolled in at least one of five benefit categories: Accident insurance, Critical illness, Hospital indemnity, Identity theft protection and Pet insurance. No surprise, but all of those can be offered on a voluntary basis. 

There are all kinds of reasons for an employer to offer voluntary benefits - cost savings, the opportunity to communicate with employees during an enrollment and, as we highlighted here, the positive effect they have on recruiting and retaining employees. In today’s changing (and highly competitive) environment they’re a critical piece of the talent management puzzle.

¹ The Cost of Replacing an Employee and the Role of Financial Wellness. Enrich.org. Jan 15, 2021.
² Trustmark Independent Employee Survey Conducted by The Connell Group. April, 2015.
³ With COVID Causing Financial Strife, Americans Taking a Hard Look at Health Care Spending. The Street. Sept 2021.
⁴ "Do Employers Really Know What Employees Want?" LIMRA. September 2018.