It’s a trend reflecting the changing preferences of an increasingly diverse U.S. work force.
U.S. employers are increasingly offering so-called “voluntary benefits and services,” or VBS, as a carrot to retain valued employees. VBS includes things like critical-illness insurance, student loan repayment programs and even pet insurance, perks that are above and beyond core health care benefits.
What’s more, something you might not have expected has emerged as the hottest VBS on the planet: identity theft protection.
Complimentary webinar: How identity theft protection has become a must-have employee benefit
A recent Willis Towers Watson survey of 317 companies employing 9.2 million workers found that 92 percent of U.S. employers believe VBS will be important to their employee value proposition over the next three to five years, up from 73 percent in 2015.
“In the past, employers have focused VBS programs on the needs of baby boomers,” says Mary Tavarozzi, Group Benefits practice leader at Willis Towers Watson. “Now employers need to attract, retain and engage millennial employees, who have very different needs and priorities. They also are beginning to recognize that helping employees with financial well-being early in their careers may contribute to a more engaged work force.”
Here’s what’s mildly surprising: Willis Towers Watson predicts identity theft protection, offered by 35 percent of employers in 2015, could double to nearly 70 percent by 2018, which would make it the fastest growing type of employee perk over the next couple of years.
This shift can be tied directly to our increasing reliance on all things digital, especially cloud services, mobile computing and social media, which, in turn, has translated into a tornado of nasty security and privacy exposures.
Thus, identity theft protection as an employee benefit is no longer considered a novel idea, and the willingness of employers to include it as an employer-paid option is fast gaining traction, observes Ben Rozum, co-founder and director of strategy and development at Genius Avenue, a benefits management company.
“From an employer standpoint, offering this protection enhances the benefit offering, helping to increase recruiting and retention efforts,” Rozum tells ThirdCertainty. “It shows a commitment to, and level of caring for, their employees on a more holistic approach.”
Often a human resources manager is the first to grasp this notion and take the lead in researching identity theft protection services. Increasingly, good information is being brought forward by brokers and sales reps who recognize a good thing when they see it.
These marketers are guiding HR managers to “a strong understanding of the product features and the need that it solves, resulting in full support for the promotion and engagement to drive employee enrollments,” Rozum says. “Given the established distribution process within the employee benefits channel, brokers and consultants who focus on both core products and voluntary benefits are actively engaged in helping to promote the benefits of identity theft protection programs to their clients.”
The brokers and sales reps spreading this gospel include employee benefits brokers, payroll services reps, and commercial insurance agents, says Jody Sevy, managing partner at consultancy Solid Nine Solutions.
“It’s easy for them to make a pivot to selling identity theft protection packages to employers,” Sevy says. “They see it as something closely related to what they are already selling, so it’s relevant, but yet it doesn’t conflict with their main line of products. It’s complimentary.”
Underlying all of this fresh activity is a confluence of developments. Awareness of network breaches and identity theft scams continues to steadily expand as cyber attacks have become a staple of news coverage. Most consumers now have some level of understanding of the erosion of privacy with respect to their digital lives and the resultant rising exposure to identity theft and cyber scams.
Meanwhile, employers seek the magic formula to keep workers happy, productivity high and benefits costs low. Along with that, more security services vendors recognize the market opportunity and are stepping forward with an array of service offerings geared to employers.
“The concept of expanded choice and personalization goes hand in hand with employer efforts to engage employees in benefit and health care decisions,” Tavarozzi says. “It’s hard to deny the attractiveness of cost-effective programs and services that meet employee needs and increase the value of benefit programs.”
Put another way, employers are discovering that it is possible to clearly visualize a tangible return on investment for spending comparatively little to add identity theft protection services as a voluntary benefit, Sevy says.
Several studies quantify the hours lost recovering from common types of identity theft attacks. A widely cited 2003 study by the U.S. Federal Trade Commission found that, on average, identity theft victims spent 30 hours resolving their problems; victims of so-called new account fraud, in which personal information is used to open and abuse lines of credit, spent 60 hours resolving their problems.
Making identity theft protection services available to an employee’s entire family can dramatically reduce this recovery time and greatly relieve stress, Sevy says. And ongoing awareness and security training programs can improve productivity as well.
“You could call it productivity insurance,” Sevy says. “It is a financial wellness perk that the employer can extend to an entire family, and the cost is a drop in the bucket.”
Rozum predicts U.S. employers will increasingly add identity theft protection services to the mix of employee benefits a couple of different ways, going forward.
- Employee paid. Employers make identity theft protection available through payroll deduction mechanisms. The employer clearly conveys why workers should take advantage and also makes the sign-up and ongoing administration process user-friendly.
- Employer paid. Employers recognize the digital world we live in and see tangible value added to recruiting, retention and productivity.
“With all the market awareness on corporate breaches, the decision to offer identity theft protection as a voluntary benefit is becoming an easier decision to make,” Rozum says. “At this point, the early adopters are those who truly see the value and are providing the benefit as an employer-paid offering.”
Byron Acohido is editor-in-chief at ThirdCertainty.com, where this article originally posted.