In today’s hiring landscape, what you bring to the table as a potential employer is more important than ever. You’ve likely experienced putting together the best offer letter any prospective candidate has received, only to be left staring at an email explaining why the candidate decided to pursue another opportunity. Before you know it, you’ll be stuck abandoning any hope of recruiting top-level talent because you’re unable to provide them with the things that attract them the most.
And what looks more attractive to a potential candidate than a solid benefits package? These days, offering a benefits package with just healthcare coverage is not enough. Here at Payday HCM, we’ve seen plenty of clients miss out on great candidates simply because their benefits package wasn’t robust enough. We’ve also seen clients struggle to retain the talent they already have for much similar reasons. Typically, this problem can be avoided through a simple fix: ancillary benefits.
In this article, we’ll review what ancillary benefits are and the best ones to include in your benefits package. We’ll go in-depth with 4 different ancillary benefits and how they can help your benefits package stand out amongst the crowd. By the end of this article, you’ll be fully prepared to beef up your benefits package so that prospective employees will only be left with one question: “When can I start?”
Below you will learn:
- What are Ancillary Benefits
- Different Types of Ancillary Benefits
- The Effects Ancillary Benefits Can Have on Your Organization
What Are Ancillary Benefits?
Before we can begin discussing what kinds of ancillary benefits you should include in a competitive benefits package, we must first understand what ancillary benefits are. Knowing what differentiates an ancillary benefit from what’s regularly included in a benefits package is crucial in determining what benefits to include in your benefits package.
Ancillary Benefits, Explained
Generally, ancillary benefits are any benefits that go beyond a regular company health insurance plan. They aim to cover any healthcare costs that may accumulate that a traditional healthcare plan would not cover.
Types of ancillary benefits include:
- Dental and vision plans
- Life insurance
- Disability insurance
- Mental health and counseling services coverage
Legally Required Benefits
When looking at creating a benefits package, it’s also important to note which benefits do not fall into the ancillary category and which must be included by law. Things like social security, state unemployment insurance, and workers’ compensation are all required benefits that you must include in your benefits package, according to the Bureau of Labor Statistics.
4 Common Ancillary Benefits
Now that we’ve established what ancillary benefits are, we can explore these four different types of benefits and what they might include.
1. Dental and Vision Plans
Dental and Vision insurance plans help your employees cover the costs surrounding any oral or ocular work they may need. According to Forbes Advisor, dental insurance is one of the most common types of ancillary benefits and often offers total coverage for preventative care and partial coverage for more expensive procedures like root canals or oral surgery.
Vision plans are also common, typically including coverage for eye exams, contact or glasses fittings, and the actual purchase of contact lenses or glasses. Depending on the plan, vision coverage may be included in the health insurance coverage.
2. Life Insurance
According to a study performed by Forbes Advisor, 45% of employees and 43% of employers named life insurance as a top benefit. Offering life insurance is vital to ensuring your benefits package stands out in a crowded field.
Life insurance offers financial protection for employees' families in the event of the employee's death. According to Investopedia, types of life insurance include term, whole, universal, and variable universal. This benefit can provide employees with peace of mind and financial security, making it a vital part of a benefits package.
3. Disability Insurance
Ancillary benefits help show your employees that you care about them, and disability insurance is one of the most essential ancillary benefits. Having your employees’ back during challenging times is what a good benefits package is all about.
Disability insurance replaces a portion of an employee's income if they are unable to work due to a disability. This can include both short-term and long-term disability insurance, with short-term typically offering coverage for three to six months while long-term coverage can assist employees for years.
4. Mental Health and Counseling Services
According to Fortune, about 67% of workers say offering mental health benefits is beneficial. Even still, that same study found that 41% of workers say their employer offers no type of counseling or therapy coverage.
Offering mental health and counseling services benefits to your employees can take many forms, including coverage within the larger employee health plan or as a separate benefit that covers counseling and treatment for mental health or substance abuse-related issues. These benefits can also take the form of an employee assistance program (EAP), which provides confidential counseling and support services for employees dealing with personal or work-related issues.
The Benefits of Benefits
According to the Pew Research Center, about around 30% of employees are only somewhat satisfied and 21% are not too or not at all satisfied with the benefits offered by their employers. Ancillary benefits can have a great impact on a variety of things within the workplace.
Employee Satisfaction and Retention
Offering a comprehensive benefits package that includes ancillary benefits demonstrates that an employer is committed to the well-being of their employees. This can lead to higher levels of job satisfaction and reduced turnover rates.
Moreover, ancillary benefits like wellness programs and EAPs can directly contribute to a healthier, more engaged workforce. When employees have access to resources that help them manage stress, maintain a healthy lifestyle, and address personal challenges, they are more likely to stay motivated and committed to their employer.
Attracting and Retaining Top Talent
Top talent often looks beyond salary when considering job offers, placing significant value on the quality of the benefits package. Ancillary benefits can be a crucial differentiator, especially when competing for highly skilled candidates who expect more than just basic health insurance.
Offering ancillary benefits like mental health resources can make a company more attractive to younger demographics, such as Gen Z and millennials, and can help attract a diverse and talented workforce.
Take Your Benefits Package to the Next Level
In a job market where 40% of employers believe employees leave for new opportunities based on better benefits and only half of employees are content with their job’s current benefits, according to Forbes Advisor, a robust benefits package is vital to ensuring you stand out amongst your competitors. Ancillary benefits are a key way to ensure you’re not losing out on the next wave of top talent.
Now that you know what ancillary benefits are, it’s time to consider how to implement them in your organization. Learn how Payday HCM can create a custom benefits package that’s built for your company’s needs.
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