The Personal Touch: How Voluntary Benefits Can Boost Retention

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Authors: Debra Andrianopoulos Tom Kelly Tamarah Saif

With nearly two out of three employees — 63% — indicating in the 2024 Gallagher Wellbeing and Voluntary Benefits survey that they would change jobs for better benefits, a strong total rewards package can be a substantial element in attracting and retaining employees. Given heightened interest among employers and employees in personalized benefits, voluntary benefits are increasingly used as an effective strategy. Indeed, that Gallagher survey found that retaining talent is a top operational and HR priority in 2025, with 61% of employers planning to expand their voluntary benefit offering.

The same findings revealed that pay, job satisfaction and trust in senior management are all top drivers that directly impact an employee's engagement with their work. These drivers were followed closely by a belief in their employer's commitment to supporting wellbeing and a benefits package that meets personal needs. Interestingly, while three-quarters of employers surveyed say they've increased their commitment to promoting wellbeing, there's a clear disconnect: only half of employees say they've seen an increase in support to enhance wellbeing.

In this article, we explore how data, AI and expert analysis enable the design of a targeted voluntary benefits plan that supports the company's core healthcare strategy, addresses affordability and boosts employee retention. And as you'll discover, when it comes to offering voluntary options, personalization is the secret to success.

A total rewards approach to voluntary benefits

For decades, designing rewards programs was a relatively straightforward exercise in finding the right mix of compensation and traditional benefits — such as health insurance and vacation time — along with a few voluntary benefits.

Those days are over. Leading organizations now understand that the flexibility and choice that come with a more personalized and customized rewards and wellbeing offering is essential to attracting, motivating and developing talent. This offering will also reduce stress, burnout and absenteeism, with a knock-on effect on engagement, productivity, loyalty and job satisfaction.

However, in today's economy, corporate budgets are stretched. Employers need to provide not only competitive beneﬁt programs but cost-effective solutions. That's why innovative companies are thinking outside the box about voluntary benefits.

Evolved voluntary benefit solutions are no longer a "nice to have" but an imperative to address diverse wellbeing needs, support a personalized approach and ultimately differentiate their offering if they 're communicated the right way. The vast majority — 86% — of employers agree voluntary benefits are key to their wellbeing strategy.

The same 2024 Gallagher survey found that employers offered an average of 13 voluntary benefits, up from 11 in 2022, and reported plans to introduce four more. While employees see voluntary benefits as essential to a comprehensive benefits package, expanding digital wellbeing tools has led to "point solution fatigue" — how do you balance the diverse needs of a multi-generational workforce without overwhelming employees with too much information?

The optimal approach lies in adopting a total rewards approach that aligns voluntary benefits with the organization's core benefits strategy. Bundling low-cost, high-impact voluntary offerings with core benefits can differentiate an employer and build employee loyalty. Innovative employers are also tapping voluntary benefits to broaden support and reduce the cost of leading claims such as cancer, musculoskeletal, mental health or pregnancy/fertility.

Indeed, a 2024 survey by the Life Insurance Marketing and Research Association (LIMRA) revealed that two-thirds of employees who would prefer bundling believe that doing so would save them money. Other perceived advantages were knowing that multiple needs are met with one offering (60%), that it makes it quicker/easier to enroll (51%) with less information to read/understand (16%).¹

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If you haven't looked at your voluntary approach in a while, you should do so, because there's a ton of innovation going on around how to get more value out of these offerings.

Tom Kelly, principal Health and National Voluntary Benefits practice leader, Gallagher

Draw on multiple data sources

Regular assessment of benefit usage and satisfaction helps support talent goals and identifies opportunities for market differentiation. Depending on the organization's benefits strategy and retention goals, a survey explicitly focused on benefits may be warranted. With sufficient data, employers can spot gaps in the availability and usage of wellbeing benefits — for example, a high-stress work environment with no mental health benefits.

Most organizations, however, can access valuable employer and third-party data from public and proprietary sources as well as insights from various employee listening channels.

Claims data: Globally, insurers report musculoskeletal-related disorders and cancer as the top drivers of claims and costs, respectively, resulting in an uptick in products to reduce incidence with an eye on affordability.² While fully insured employers may lack access to claims data, a benefits advisor can assist with benchmark data.
Employee sentiment: Look beyond benefits feedback and consider comments about absenteeism, burnout, stress and other concerns that can be addressed with targeted solutions. Other sources, like company review sites, can provide useful insights when focused on consistent, constructive messaging.
Demographics: Local geographic health profile data, such as obesity rates, influence benefit plan design and can drive efficiencies. Diabetes education and management support are examples. Local data is available from the US Census American Community Survey, County Health Rankings website and the Center for Disease Control's PLACES database.

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Look at all your data sources and dig in to understand what you need to move forward. With enough insights, you can build out a voluntary program that's really impactful.

Tamarah Saif, national managing director, People Development and Insights practice, Gallagher

Consider generational differences for personalization

A one-size-fits-all approach isn't always appropriate when it comes to employee wellbeing and resilience. The stressors facing today's workforce are diverse. Today's multi-generational workers have different experiences, life journeys and interests.

Employees want a custom rewards experience that reflects how they live, work and communicate — not a universal approach rooted in the past. Therefore, organizations that personalize their benefit programs and offer flexibility on an individual level have a huge advantage in the talent market. The good news is that two out of three employers plan to offer greater benefit personalization and choice.

By allowing employees to personalize with voluntary benefits that address most (if not all) of these issues, leaders can eliminate a culture that implies work comes before personal needs — and empower employees to invest in themselves so that they can be at their best for others. This approach translates to a positive impact on employee retention — 89% of employees are likely to recommend their company as a good place to work if the company supports wellbeing.

When asked which areas they would like additional employer support, responses directly correlated to the employee's life stage. According to the 2024 Gallagher survey, student loan support topped the list for Gen Z, whereas Gen X most often named 529 college savings plans.

Millennials and Gen Z comprise the largest segment of the US workforce; therefore, benefits that support work-life balance will resonate with these groups.³Younger workers are significantly more likely to seek a job change (53%, in the case of Gen Z), indicating that employers may want to target this demographic to increase employee commitment and engagement.

Several options are available, ranging from pet care, fertility and childcare support to innovative solutions such as auto maintenance, meal prep and travel savings/support. To address these diverse needs, more employers are considering offering lifestyle planning accounts (LPAs), an increasingly popular strategy that can be used to address a variety of wellbeing needs. Two out of three employers said they plan to evaluate LPAs in the coming year.

Use AI to boost awareness and personalization

Although benefits have a positive impact on retention, 55% of employees wish they had a better understanding of their benefits; this number is lowest at younger ages and rises with advancing age. Exploring artificial intelligence (AI) to create personalized recommendations and benefits messaging can effectively boost uptake while enhancing communication and awareness. A closed AI system (one that accesses internal data only) can support customized messaging to inform and remind employees of benefits aligned with life events, medical claims and lifestyle interests, matching solutions to their individual needs.

When integrated into a broader wellbeing strategy, tailored messages dovetail individual wellbeing insights with relevant resources, helping employees locate information more easily, reducing frustration while increasing their likelihood to take advantage of the benefits.

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When crafting benefits messaging, create a discipline to revisit your objectives. Also, don't be afraid to make it personal — know what matters most to your employees. Segmenting communications and using AI to support personalization are well worth exploring and can lead to significant returns.

Debra Andrianopoulos, principal, Client Management and Market Development, Gallagher

The best AI tools should retain a human element for those who prefer a more personal interaction. Employers increasingly find that most employees use AI in their personal lives and, further, expect consumer-grade technology in the workplace, making this one more factor to support retention.⁴

A strategic, winning strategy

Voluntary benefits have evolved greatly, allowing employers to differentiate themselves in the market and add value that boosts employee engagement and retention.

For employers, affordability, integration with core benefits, social and demographic relevance and alignment with organizational strategy are the main priorities. From an employee perspective, interest in voluntary benefit options highlighted in the survey remain high and they expect employers to offer effective, targeted and personal ways to support physical, mental and financial health. Low awareness due to poor communication will account for less interaction with the benefits being provided.

Ongoing assessment of new and innovative models and their impact on claims is crucial for identifying coverage gaps, cost efficiencies and ways to leverage offerings that maximize the value for both employers and employees alike. A data- and AI-driven approach, supported by expert analysis, can significantly help HR leaders plan the design based on employee needs to provide a competitive and personalized suite of voluntary benefits.

Crucially, this approach allows employers to tailor the benefits on offer to cater to the needs of different age brackets, which as Gallagher's research shows, change over time. In the ongoing battle to attract and retain skills and top talent, such an approach can be the all-important differentiator.