ARLINGTON, VA, March 2, 2016 — Motivated by the need to meet the changing needs and lifestyles of an increasingly diverse workforce, 92% of U.S. employers believe voluntary benefits and services (VBS) will be important to their employee value proposition over the next three to five years, according to a survey by Willis Towers Watson (NASDAQ: WLTW). This compares with 73% in 2015.
The findings from Willis Towers Watson’s 2016 VBS Survey reflect that as cost pressures from providing traditional core benefits continue, employers are viewing VBS as an inexpensive way to enhance their portfolio of benefit offerings.
“The growth of VBS is widespread among employers of all sizes and in all industries,” said Amy Hollis, Voluntary Benefits leader of Willis Towers Watson. “The appeal is simple: These programs enrich traditional benefits by offering a high level of personalization to employees while leveraging group purchasing power. Moreover, because these programs are voluntary, they add little or no cost to employers.”
As VBS grow in popularity, so do the types of programs offered. Employers are complementing conventional voluntary benefits such as supplemental life and disability, dental and vision insurance with new and emerging offerings that appeal more to younger employees and that reflect changes in the types of protections employees are seeking. Topping the list are identity theft protection, critical-illness insurance, student loan repayment programs and pet insurance.
“In the past, employers have focused VBS programs on the needs of Baby Boomers,” said Mary Tavarozzi, Group Benefits practice leader of Willis Towers Watson. “Now employers need to attract, retain and engage Millennial employees, who have very different needs and priorities. They also are beginning to recognize that helping employees with financial well-being early in their careers may contribute to a more engaged workforce.”
Based on changing interests and priorities, the following VBS options will experience dramatic growth over the next two years:
- Identity theft protection, offered by 35% of employers in 2015, could double to nearly 70% by 2018.
- Critical-illness insurance, offered by 44% of employers in 2015, could grow to 73% by 2018.
- Student loan repayment programs, offered by just 4% in 2015, could increase to 26% by 2018.
- Pet insurance, offered by 36% in 2015, could rise to 60% by 2018.
“The concept of expanded choice and personalization goes hand in hand with employer efforts to engage employees in benefit and health care decisions,” said Tavarozzi. “It’s hard to deny the attractiveness of cost-effective programs and services that meet employee needs and increase the value of benefit programs.”
About the survey
The Willis Towers Watson 2016 VBS Survey was fielded in November 2015 to determine how U.S. employers use and deliver VBS programs. The 317 employers that responded represent 9.2 million employees and are midsize to large companies across a variety of industries.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.