By Blye Gallagher, Vice President – Employee Benefits
Companies often experience a whirlwind of activity in December, as managers review their organization’s financial performance and finalize budgets for the next fiscal year. Tackling your employee benefits program can feel like just another administrative headache—one you may be inclined to avoid. But, letting another year slip by without revisiting your benefits program means a missed opportunity to further your business objectives, and might even be a costly mistake.
Most employers are required to provide mandatory benefits, including worker’s compensation and unemployment insurance, but they have the leeway to determine what other perks the company will offer. Taking a fresh look at your employee benefits program now lets you not only assess the financial impact of your existing benefits program, but also identify opportunities to save money and improve employee retention in the year ahead.
Of course, designing a well-crafted employee benefits program is no small feat. You need to identify your organization’s benefits objectives, assess employee needs, and research the most desirable and competitively priced benefits to include. Then there’s the matter of projecting the cost, and massaging the budget or the program design accordingly. Thorough research will let you make more informed decisions about which benefits should stay—and which should go—in the New Year.
Lure Top Talent
Employee benefits are a key tool for finding and retaining the best talent across every industry. In a competitive marketplace, you don’t want to lose a strong candidate or employee to a rival company that offered a more appealing benefits package.
Significant time and energy may have gone into designing your current employee benefits program, but if you haven’t looked closely at the components for at least a couple of years, you’re at a disadvantage. Times change, and it’s important to revisit your employee benefits program at least annually, if not quarterly. New and innovative perks and new carrier options come out every few years, and they may be more appealing or cost effective than the mandatory and voluntary benefits you already have in place.
Similarly, changing workforce demographics can affect which perks are considered most appealing. To stay competitive, you want to offer the standard benefits, like medical coverage and paid time off, while also giving your employees options for the incentives they find useful. For example, Baby Boomers may be enticed by critical illness coverage or a good retirement savings plan, while Millennials likely are more interested in perks like telecommuting, child care, and assistance with student loan repayment.
Pick the Right Mix
The size of your workforce, employee demographics, geographical location, and industry trends all should be taken into consideration during the planning process. Likewise, your budget for employee benefits will have an impact on what’s included in your program, and whether the company or the employee picks up the tab. Voluntary incentives, like identity theft coverage, that are sponsored by the company and paid for by enrolled employees can make your benefits plan more robust.
Conducting an employee survey also can help you decide which benefits to offer, and prioritize your options as you plan for the coming year. The survey should list your existing benefits as well as ones that the company may want to add, and provide a space for employees to suggest their own preferred perks that aren’t already listed. By surveying employees at the start of the New Year, you’ll have ample time to assess the results as you begin planning for renewals.
Looking at actual participation data can help you further narrow the field of options during the planning phase. If everyone says that they love the pet insurance program, but only two of your 500 employees signed up this past year, it may not be worth the administrative hassle of including it in the mix. Similarly, you want to ensure you’re getting the best bang for the buck for any benefits that you plan to continue. Reviewing claims data and any regulatory changes at the start of the year gives you time to shop around and negotiate the best rates.
Share the News
Of course, reviewing and modifying your company’s employee benefits program does little good if employees are unaware of what’s available. Once program changes have been finalized, start working on a communications strategy to get the word out. Using a variety of communication modalities—from email and text message notifications to educational videos, in-person presentations, posters, letters, and announcements on the company intranet—can boost employee awareness and increase engagement. (For more tips, check out my article on “Five Strategies for a Successful Open Enrollment.”)
Shifting demographic and economic trends, along with new state or federal regulations, all can have an impact on the benefits that you offer. By periodically reviewing the benefits your business offers and asking employees for their input, you can ensure that your employee benefits program stays competitive and meets your organization’s objectives. With the right coverages and incentives, you can not only protect your employees’ health and financial well-being, but also attract new talent and build goodwill with your workforce—and that’s a win for everyone.