A Compelling Case for Utilizing Voluntary Benefits
Workspan Daily
August 06, 2025

With hyper-personalization dominating today’s total rewards (TR) landscape, many employers may find it difficult or impossible to continually expand their benefit offerings to meet the evolving needs of a diverse workforce. But they pose a risk of losing coveted talent if they don’t. 

Voluntary benefits can help bridge the gap in such cases and boost retention. These optional, supplemental benefit programs offered as part of a workplace TR package are typically fully or partially paid for by employees — albeit often at lower rates than if they purchased them on their own — and handled with the convenience of a payroll deduction.


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Exploring these options is more relevant than ever: A 2024 study by risk management and consulting firm Gallagher found 63% of workers would leave their job for better benefits. And, employers are increasingly understanding that supplemental benefits help fortify a rewards package:Gallagher also found 86% of employers agreed that voluntary benefits are a key aspect of their well-being strategy, and many are planning to expand their offerings. In 2025, 51% of employers surveyed by Gallagher were looking at voluntary benefits as a tool to retain talent — up from 31% in 2023.

“The days of offering just a medical plan, [as well as] dental, vision and retirement plans are over,” said Tom Kelly, the principal health and national voluntary benefits practice leader at Gallagher. “Today’s employees, particularly those from the younger cohort, are really looking for a more holistic approach to support their well-being — physical, mental, financial, dependent and work-life balance. Organizations that allow more personalization of benefits and flexibility at the individual level will have a huge advantage in engaging their talent. Employees want more of a custom rewards experience that reflects how they live, work and communicate, rather than a universal approach.”

From Hospital Indemnity to Pet Insurance

Employers offered an average of 13 voluntary benefits in 2024, up from 11 in 2022, and planned to soon introduce an average of four more, according to Gallagher’s report.

The most common voluntary or supplemental benefits, according to that report, include:

  • Accident insurance (offered by 75% of surveyed employers)
  • Critical illness (70%)
  • Hospital indemnity (59%)

Other common offerings include:

  • Employee perks or discount programs (51%)
  • Cancer care insurance (40%)
  • Identity theft protection (39%)
  • Legal plans (38%)
  • Pet insurance (33%)
  • Long-term care insurance (28%)

Vision and dental insurance are sometimes offered on a voluntary basis as well.

Gallagher found quality-of-life and well-being products, additional long-term care solutions, expanded mental health support, bolstered identity theft and cybersecurity protection, and childcare, eldercare and other caregiving benefits are all growing trends to keep an eye on.

An Awareness Gap

Despite these offerings, Gallagher found organizations face limitations on administrative platforms or staff resources, competing HR priorities, and low employee participation in voluntary offerings.

Part of that is cost — 22% of surveyed employers said their workers can’t afford their voluntary benefits. But much of it comes down to better integration of voluntary benefits into rewards packages, and solid communication and facilitation strategies, Kelly said. In fact, 55% of workers told the firm in 2024 they don’t understand their benefits.

“Employee engagement in voluntary benefit programs can be a challenge with organizations,” he said. “When you consider employers are trying to convey the importance of their medical plan, let alone some of the emerging voluntary programs, in a lot of cases, employees don’t understand them. One of the mistakes employers make is just putting voluntary benefits out there and hoping employees will find them. It’s not just window dressing; you want employees to view these as essential benefits offerings.”

‘Need-to-Have’ Benefits

So, how do you get employees to connect the dots? Gallagher’s Kelly and Dani McCauley, the chief revenue officer of U.S. consumer benefit solutions at risk management and HR consulting firm Aon, offered the following tips:

  • Use demographics, claims and utilization data, as well as other resources to gain a solid understanding of what your unique employee population is looking for.
  • Look at improving the integration of your core and voluntary benefits platforms and technology.
  • Communicate often. Address what benefits are available, how they work, how to enroll and how to use them.
  • Find ways to bundle program offerings that resonate with different segments of your employee population.

“Voluntary benefits used to be a ‘nice-to-have,’” McCauley said. “They’re becoming a ‘need-to-have’ to be attractive to a candidate. There’s an art to saying, ‘We understand where you’re at in the life stage of your journey as an employee.’ What somebody might need at 25 versus 56 is very different. It’s about really allowing voluntary benefits to round out a portfolio of offerings.”

McCauley also encouraged employers to strategically place some voluntary benefits in the annual open enrollment cycle and make others available for enrollment throughout the year. The latter tier may include auto or home insurance, pet insurance, student loan support, and discount or purchasing programs.

“In a world of hyper-personalization, voluntary benefits give employers a way to personalize benefits to the individuals who are a part of their employee population, and to do so without incurring employer cost,” McCauley said. “When an employer is thinking about attracting new talent and says, ‘These are the benefits we offer,’ and voluntary benefits are a part of that, that’s a difference-maker.”

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