A lot has changed in the labor market since the start of the COVID pandemic. COVID sent millions of workers home. Some went home to work remotely while others were laid off or furloughed. When it was time to start bringing people back, employers realized things were different. Recruiting became a whole new ballgame, a ballgame in which voluntary benefits have become a wild card.
In poker, a wild card can be used in any way a player sees fit to complete their hand. A wild card can be used as an ace to complete a royal straight. It can become a 5 to complete a pair. It can become the missing card necessary to make a full house. In the recruiting and hiring game, voluntary benefits are like wildcards inasmuch as employers can offer whatever they feel is necessary to secure the most talented workers in their industries.
Modern Workers Want More
So why such an emphasis on voluntary benefits right now? It goes back to the Great Resignation. One of the unintended effects of the COVID pandemic and its shutdowns was the realization among American workers that they were dissatisfied with the status quo. Millions resigned from their jobs in hopes of finding greener pastures elsewhere.
A tight labor market combined with the Great Resignation forced employers to ask what it would take to get new employees in the door. They realized that employees want more. And one of the ways they decided to give them more is by increasing voluntary benefits.
The puzzling part of all of this is that voluntary benefits do not have to cost employers anything. Most voluntary benefits don’t, hence the name. Take pet insurance. According to BenefitMall out of Dallas, TX, pet insurance is a pretty popular voluntary benefit right now. Yet employers don’t pay for it. Employees do. The only advantage of getting pet insurance through one’s employer is a reduced rate.
It Makes Employees Feel Good
Would employees who take advantage of company sponsored pet insurance still buy that insurance if it were not offered as a voluntary benefit? If the answer is ‘yes’, then it is easy to see why such a benefit would appeal to pet owners. But if the answer is ‘no’, there is something else in play.
Perhaps voluntary benefits help recruitment, hiring, and retention because they make employees feel good. Maybe voluntary benefits make employees feel like their companies care about them as people rather than just human resources. Before you dismiss the idea, it is not so farfetched.
The Eastman Kodak Model
Back in the 1970s and 80s, Eastman Kodak was a manufacturing powerhouse. They were also considered a model employer because of the way they took care of the workers. They paid extremely well and offered generous benefits. They also offered things like an on-site gym and bowling alley, on-site eateries, year-round sports leagues, annual golf tournaments, and so much more. Decades earlier, the company even invested its own money to build entire neighborhoods of houses for employees.
My father worked for Kodak. He was a company man. He wanted me to follow in his footsteps because he firmly believed Kodak cared. They took care of their people, as far as my father was concerned.
It is clear that today’s labor market is extremely tight. It is also clear that employees want more than standard medical insurance and a 401(k) retirement plan. Voluntary benefits can pick up the slack. They are the hiring wild card right now. The better a company’s voluntary benefits package, the stronger its position.