A double-edged sword to voluntary benefit programs lurks between the lines of new data from Hay Group Insight, the global management consulting firm’s survey research division, which examined 41 client experiences involving more than 1 million employees worldwide across several industries.

Organizations that have stressed employee engagement during the economic downturn maintained or increased motivation levels, generating superior financial results, customer satisfaction and employee performance. More than 75% of the firms studied actually saw improvements in employee opinion surveys scores from late 2008 or early 2009 compared with polls conducted prior to the recession.

When factoring voluntary benefits into this equation, there’s a clear potential for mixed results. “I think the presence of voluntary benefits as a means of augmenting existing [employer-paid] benefits is a plus that probably would assist with employee engagement, though I’m not sure how strong a link I can draw directly to it,” surmises Larry Hicks, a senior consultant in the Hay Group’s benefits practice.

He has seen a number of employers dial down the level of their subsidized life insurance to about $50,000, instead relying on supplemental employee-pay-all coverage as a means of meeting specific individual needs based on age and lifestyle considerations.

In addition, he notes that vision plans and other coverages that were once paid by employers are now offered on a voluntary basis given the difficult economic climate. The danger of such a move is that it could be perceived as a benefits takeaway that impedes employee engagement, according to Hicks.

The key is how it’s communicated. “If people feel that it was in lieu of something more severe, they might very well accept it if they recognize they’re in an industry where times are particularly tough and this was a way to sustain more employment,” he says. “But it’s equally likely that somebody else can look at it and say, ‘gee, that’s just one more thing they’re taking away from me.’”

Hay Group clients that remained true to employee-engagement factors were been able to boost organizational commitment levels and burnish job satisfaction for employees who also were more willing to contribute discretionary effort.

Tangible benefits associated with increased employee engagement and enablement resulted in revenue growth that was 4.5 times greater than the lowest-performing organizations in those two areas, as well as 54% higher customer satisfaction scores. Moreover, there was a total reduction in voluntary turnover of 54% when comparing the best and worst performers on employee engagement and enablement.