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Navigating the Evolving Landscape of Voluntary Employee Benefits: 2023 Review and 2024 Projections
By John Allen, EOI Service Company
According to Eastbridge Consulting Group’s "Forecasting Voluntary Sales" report, dated September 2023, voluntary benefit sales are projected to return to historical levels over the next four years. While voluntary sales are impacted by many factors including government legislation and regulations, economic conditions, and the effects the post-pandemic world, the voluntary benefit market has been fairly resilient, most recently bouncing back to near pre-pandemic levels with a 173% increase since 2020.
2023: A Year of Transformation
In 2023, the voluntary employee benefits market continued to see significant transformations driven by changing workforce expectations, technological advancements, and an increased focus on employee emotional and financial well-being. Employers recognized the key role voluntary benefits played in attracting and retaining top talent in order to meet diverse needs.
Key trends shaping the voluntary benefits marketplace included:
Customization and Personalization: One-size-fits-all benefit packages are outdated. Employees expect personalized and customizable benefits that meet their unique needs and lifestyles. Employers responded by offering a wide range of options including: flexible work schedules, personalized health benefits, and financial wellness programs. The opportunity to customize benefits has been shown to increase employee satisfaction and foster a sense of empowerment and loyalty.
Financial Wellness: The COVID-19 pandemic heightened awareness of financial well-being. In 2023, employers placed a greater emphasis on voluntary benefits that address financial concerns, such as student loan assistance, financial planning services, and emergency savings programs. Financial wellness benefits not only reduce financial stress for employees but also contribute to reduced absenteeism and turnover and provide a greater level of productivity.
Workforce: Work from home has become more prevalent and voluntary benefits continue to adapt and cater to the needs of a remote workforce. Now, more than ever, employers are offering benefits such as home office stipends, virtual wellness programs, and mental health support in order to ensure their remote employees feel connected, supported, and engaged.
Technology: Advancements in technology are playing a crucial role in transforming the voluntary benefits landscape. Employers are leveraging innovative solutions such as: mobile apps, artificial intelligence, and data analytics to streamline benefit administration, enhance communication, and provide an enhanced employee experience. Technology integration not only improves efficiency but also empowers employees to access and manage their benefits with ease.
Mental Health: Mental Health has gained significant attention in recent years, and this trend continued to expand in 2023. Employers are recognizing the importance of offering comprehensive mental health benefits, including: counseling services, stress management programs, and additional resources. Fostering a supportive and caring mental health environment is critical to preserving a healthy and productive workforce.
DEI – Diversity, Equity, and Inclusion: In 2023, there was an expanding emphasis on voluntary benefits that contribute to diversity, equity, and inclusion. Employers are offering benefits that address the unique needs of diverse employee groups, such as: parental leave policies, childcare support, and language learning programs. These initiatives not only promote a more inclusive workplace, but also contribute to a positive employer brand.
Social and Environmental Responsibilities: Employees are increasingly gravitating towards employers who align with their values, including a commitment to environmental and social responsibility. Voluntary benefits that support sustainability, such as eco-friendly transportation options or charitable giving programs, are gaining popularity. Employers are recognizing the importance of corporate social responsibility in attracting and retaining socially conscious employees.
Addressing the complexities of a modern workforce must involve adapting voluntary employee benefits to appeal to a dynamic and diverse workforce. Employers who recognize the evolving needs and expectations of their workforce, embrace innovation, and prioritize employee well-being, will be well positioned to attract and retain top talent in the years to come. All of the above trends speak to the importance of flexibility, personalization, and a holistic approach to employee benefits now and in the years to come.
2024 Projections: Navigating the Path Ahead
As we welcome in the new year, the landscape of voluntary employee benefits is well positioned for growth. Workforce dynamics will continue to shift, driven by global events, technological advancements, and evolving expectations. Predicting the future of voluntary employee benefits provides employers with valuable insights allowing them to stay ahead of trends and, in doing so, meet the diverse needs of their workforce.
Trends that will shape the voluntary employee benefits market in 2024 include:
Hybrid Work Flexibility: Hybrid work models are expected to continue into 2024, with more companies embracing flexible work arrangements. Voluntary benefits will likely evolve to support the unique needs of employees working both in-office and remotely. Employers may introduce benefits such as: virtual wellness programs, caregiving support, home office support, and collaborative technology tools, to promote a seamless and supportive work experience regardless of location.
Holistic Well-being: In 2024, there will be a heightened focus on holistic employee well-being, encompassing physical, mental, and financial health. Voluntary benefits packages are expected to expand to include a more comprehensive range of offerings, such as personalized wellness plans, mental health resources, and financial education programs. Employers will increasingly view employee well-being as a strategic investment.
Artificial Intelligence: Artificial Intelligence (AI) is poised to play a more significant role in tailoring voluntary benefits to individual employee needs. AI will be used to analyze employee data and preferences enabling employers to offer a more personalized benefit package. Customized benefits not only enhance the employee experience but also contribute to higher levels of engagement and satisfaction.
Non-traditional Benefits: The classification of employee benefits is expanding beyond traditional offerings such as Accident, Critical Illness, and Hospital Indemnity plans. In 2024, we can expect to see a rise in non-traditional benefits that address emerging needs. Benefits will continue to evolve in order to address remote work, skill development, diversity and inclusion programs, and emerging technologies. Additionally, benefits such as long-term care and genetic based cancer plans are expected to take center stage. Employers will need to differentiate themselves and can do so by offering innovative and forward-looking benefits that align with the evolving trend and expectations.
Employee Involvement in Benefit Design: In 2024, employers may increasingly involve employees in the design and selection of voluntary benefits. This approach not only empowers employees by allowing them to choose benefits that align with their priorities but also fosters a sense of ownership and engagement. Employers may use surveys, focus groups, and feedback sessions to better understand their employees’ evolving needs and preferences.
Sustainability and Social Responsibility: A continued emphasis on sustainability and social responsibility is anticipated in 2024. Employees are increasingly drawn to organizations that demonstrate a commitment to environmental and social causes. Voluntary benefits may include initiatives such as: eco-friendly commuting options, community service programs, and charitable donation matching. Employers who align with the values of their workforce will likely see increased loyalty and positive employer branding.
Conclusion: Embracing the Future of Voluntary Benefits
In 2024, the voluntary employee benefits landscape promises to be dynamic. Employers who embrace trends and proactively enhance their benefits offerings will be well positioned to attract, recruit, and ultimately support a diverse employee population. As we embrace the future, voluntary benefits will play a significant part in effectively recruiting and engaging employees leading to a positive outcome for all.
John Allen is President of EOI where he executes and develops strategic marketing initiatives on a national level, specifically focusing on the enhancement of value-added services that EOI provides for its clients. Since joining EOI in 2009, John has played a key role in the area of strategic marketing, building an outstanding implementation team in the Chicago office and tripling sales in the Midwest region.
