What is a voluntary benefit?
A voluntary benefit is an optional additional coverage offered to employees at discounted rates as a perk of employment. These benefits enhance core offerings by supporting employees in various aspects of their lives. They are easy to administer, provide flexibility and offer a wide range of customizable options to meet individual needs. Examples include:
- life insurance
- critical illness coverage
- extended health and dental care
- absence and disability management
- legal plans and services
- lifestyle perks and financial wellness programs
Related: Benefits Packages for Small Businesses in Canada
Participation in voluntary benefits
Participation in voluntary benefits is optional, giving employees the freedom to select the coverage that best fits their needs. Employees typically pay for these benefits via payroll deductions.
Voluntary benefits to consider
Employers can leverage group purchasing power to secure better rates and terms than employees may obtain on their own. Additionally, employees may retain their coverage even after leaving the group plan. Some options to consider:
- Life insurance: Life insurance is one of the most popular voluntary benefits that provides financial security for employees’ families.
- Extended health coverage: Includes services like prescription drug coverage, counselling, massage therapy and physiotherapy.
- Disability insurance: Protects employees’ income if they are unable to work due to illness or injury.
- Retirement savings plan: As CPP benefits have a maximum monthly limit, employees often pursue retirement plans to secure their financial future. Many company plans offer employer-matched contributions.
- Dental coverage: Extended dental health plans can reimburse employees for oral healthcare services that provincial plans do not cover.
- Long-term care insurance: Provides financial assistance for people with chronic illnesses or impairments requiring ongoing care.
Related: Different Types of Leave in Canada
Advantages of employee voluntary benefits
Providing voluntary benefits is a business advantage for employers. Here are some reasons why it’s a smart strategy:
Attracts top talent
With job candidates increasingly seeking roles catering to their unique needs, offering flexible employee benefits makes your workplace more attractive to a broader talent pool. Voluntary benefits can be a competitive advantage for employers, setting your company apart and signalling that you care about employee well-being.
Boosts employee retention and satisfaction
Employees appreciate having access to personalized benefits that will enhance their quality of life, fostering loyalty and engagement and improving morale. Satisfied employees are less likely to leave, saving employers the costs associated with high turnover rates.
Enhances employer branding
Offering voluntary benefits positions your company as an employee-focused organization and increases workplace appeal. Employees who feel supported often share their experiences informally and on employer review sites, enhancing your brand.
Cost-effective
Since most voluntary benefits are employee-paid and provider-managed, employers can offer a wide range of options without significant financial investment.
Promotes employee wellness
Encouraging employees to take care of themselves reduces absenteeism and improves productivity. Financial programs can reduce stress and lead to a more focused and engaged workforce, helping employees manage their work-life balance more effectively.
Supports workforce diversity and inclusion
Voluntary benefits that cater to employees at different life stages, income levels or cultural backgrounds showcase your commitment to workforce diversity and inclusion.
Simplifies administration
Technology platforms simplify the administration of voluntary benefits for HR teams, with third-party providers managing enrolment and ongoing support. This allows employers to quickly adapt benefits packages to changing employee preferences and emerging trends.
Related: How To Create an Effective Employee Referral Program in 5 Steps
Guide to Implementing Voluntary Benefits
With a structured approach, you can roll out an effective program that meets your employees’ needs. Following these steps can ensure success:
- Assess employee needs and preferences, analyze your workforce’s age, location, family status and roles to predict their needs, and compare existing benefits with employee preferences to identify gaps.
- Research insurance companies or platforms specializing in voluntary employee benefits. Select providers that offer high-quality benefits, reliable support, and easy administration. Look for flexible, customizable and scalable plans. Negotiate favourable rates and terms for your employees.
- Design your voluntary benefits package and tailor them to offer the best benefits for employees while meeting your company’s budget. Prioritize popular options that appeal to most employees, including niche options such as pet insurance, financial wellness programs or gym memberships to meet varied needs. Verify compliance with federal, provincial and local regulations.
- Plan for a smooth implementation by creating a timeline with key communication, enrolment and activation milestones. Train HR staff on program details to address employee questions and coordinate with providers to finalize enrolment logistics and ensure ongoing support.
- Clearly and effectively communicate with employees through brochures, emails, FAQs and videos explaining the benefits and enrolment process. Host webinars or in-person meetings where employees can ask questions. Emphasize the value, cost savings, flexibility and how these benefits enhance employees’ lives. Assist with enrolment and offer support for navigating the process.
- Launch the enrolment process, making it easy and accessible for employees to sign up. Use technology platforms to streamline enrolment, provide personalized guidance through HR representatives or external advisors and set deadlines.
- Monitor and evaluate the program to track participation rates and the most popular benefits. Gather feedback with follow-up surveys to assess employee satisfaction and gather suggestions for improvement. Review provider performance and adapt offerings based on employee needs.
- Promote ongoing awareness with regular updates on new benefits, enhancements or deadlines. Celebrate success stories and offer periodic training or Q&A sessions to keep employees engaged.
Why Voluntary Benefits Matter
Voluntary benefits are a strategic advantage that helps employers attract and retain top talent. They enhance employee satisfaction and build your company’s reputation as an ethical employer. Voluntary benefits are a cost-effective way for employers to demonstrate their commitment to addressing the diverse needs of their employees, creating a win-win scenario for both employees and businesses.
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