Managing an employee benefits program is challenging and is a significant financial investment. Furthermore, product quality and plan design are critical components to employee satisfaction. In most cases, employee benefits account for 40% or more of total compensation costs. Benefits are a large investment for employers, but vital when it comes to recruiting and retaining talent. These factors equate to employers needing a well-thought-out benefits plan and strategy.
Here are some tips to achieve benefits strategy that meets the needs of you and your employees:
Identify your company’s objectives and budget:
What are the objectives of your benefits program? Identifying the objectives will help define the tactical plan to achieve the goals. For nearly every employer, the objective starts with establishing and maintaining a competitive employee benefits package that is based on the needs of the employees, protecting them against the risks of old age, loss of health and loss of life. This is most often easier said than done when you factor in your budget and cost constraints in offering benefits to your employees. A tactical plan to achieve this objective while at the same time managing cost to a budgeted amount could include creative premium funding, defined contribution and offering multiple plan options so employees can select a plan that works best for their coverage and cost needs.
Go straight to the source … talk to employees:
Employers who take a proactive approach with employees can best meet the needs of the workforce. Simply put, you can’t know what benefits are most appealing and useful unless you ask! This can be accomplished by conducting employee surveys or a needs assessment. Whether implementing a new benefits program or re-evaluating an existing program, turning the evaluation process first to employees will enable an employer to customize new benefits that specifically target the needs of their employees and identify existing benefits that are outdated, irrelevant or wasted offerings. Although employee feedback will likely boost employee motivation and satisfaction with your benefits program, this will only hold true to the extent that the employer is committed to utilizing the feedback in the benefits selection and design.
“In most cases, employee benefits account for 40% or more of total compensation costs.”
Keep legal requirements in mind:
It is crucial for employers to consider any legal requirements they may be subject to as they relate to your employee benefit offerings. For example, under the Affordable Care Act, employers with 50 or more employees are required to provide affordable health insurance to employees or pay a penalty. Employers need to determine and consider the impact any legal requirements have on the decisions and design of their employee benefits program.
Communicate, Communicate, Communicate:
Developing a communication strategy is vital to benefits planning and management. Employee understanding is a crucial motivator and supports satisfaction with the benefits program. If employee input was utilized in the benefits design process, employers should make it known how their feedback influenced the benefit program offerings. Good benefits communication creates awareness and appreciation, provides a deeper understanding of the benefits available, and encourages wise use of the insurance coverages.
Create a benefits report card:
Regularly assess and evaluate your benefits program. Are your objectives being achieved? Have the goals changed? Are your premium and other coverage costs in line with the budget, or do they require additional review? Is employee communication effectively gathering the information needed? Is the employee communication frequency and feedback on track? Is the plan meeting the company’s objectives and employee needs? Changes in business climate, the economy, regulations and workforce demographics all have impact on benefit offerings.
By partnering with a knowledgeable, creative benefits advisor, employers can develop goals and measurements to assess their benefits program and make necessary adjustments if needed.