Human Resources: Executive Summary: Benefit Trends

In the United States, voluntary benefits are assuming a more important role, providing new ways to address workers' needs as well as opportunities for companies to boost retention and loyalty. According to a recent survey by Prudential Financial, 84% of the households surveyed agreed that such benefits boosted employee loyalty and retention. And in times when many companies have had to scale back, the addition of some voluntary benefits may help temper the bad news. Workers may have to make higher copayments for health coverage, Employee Benefit News suggests, but they may have the opportunity to save money through discounted auto insurance or home refinancing loans. Some of the voluntary benefits that have become increasingly popular and more affordable in recent years include group purchasing, onsite personal services, long-term-care coverage, financial planning and Section 529 college savings plans.

Hewitt Associates noted group purchasing and onsite personal services as two of the hottest growth fields. Group purchasing gives employers the opportunity to offer their workers access to discounted auto, homeowners' or other forms of insurance coverage, often at no cost or a low cost to the company. Firms may choose to participate under an employee-pays-all scheme or by sponsoring a portion of such premiums. Providing onsite personal services is also a rising star among voluntary benefits. The portion of employers offering such benefits inched upward between 2001 and 2002, and 61% of companies surveyed extended at least one personal service on the premises. These benefits may include automated teller machines, banking services, credit unions, dry cleaning, travel services or other benefits designed to help workers save time.

Other voluntary benefits help workers prepare for the future and man-age their money. Long-term-care (LTC) insurance has been on the rise since 1998, according to recent Society for Human Resource Management benefits surveys. At that time, only 33% of companies surveyed reported offering LTC insurance, compared with 48% doing so in 2002. Section 529 college savings plans and other programs to help employees save for higher education may also be gaining ground as hot, new benefits, ac-cording to a recent poll by BenefitsNext. Many workers have seen their 401(k) accounts shrink considerably and are looking for other investment alternatives.

Offering financial and retirement planning and providing more investment education ranked fourth and fifth on employers' top five benefit priori-ties for 2002, according to Deloitte & Touche. Other experts say such benefits may even become standard fare. The International Society of Certified Employee Benefit Specialists notes that 94% of benefit specialists anticipated that financial planning benefits would grow more common, and 17% of those surveyed believed offerings would become mainstream. What's more, 37% predicted that the scope of such assistance would broaden beyond investment and retirement planning to include comprehensive personal financial management.

The MetLife Study of Employee Benefits Trends released in December 2002 also indicates that interest in and use of such benefits is growing. Fifty-nine percent of surveyed employees purchased voluntary benefits offered on an employee-pays-all basis at work. What's more, younger employees, those in the 21-to-30 age group, were more likely to participate in such plans.

The growth of voluntary benefits "is a win-win for employees and employers alike," notes Gregory Arms, president of the group management division of American International Companies. "Company-sponsored voluntary benefits offer a more cost-effective opportunity for employees to purchase benefits, and they can help companies differentiate themselves in retaining and creating stronger loyalty among employees."

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.