Employee benefits play a big part in how well employers can recruit and retain employees. A SHRM survey found 72% of organizations that increased benefits did so to retain employees and 58% to attract new talent. With so much riding on benefits, it’s imperative to take the time to design packages that appeal to all of your employees’ wants and needs.
Follow these five steps to design an employee benefits plan within your budget that your employees will love.
Step 1: Define the goals and objectives of your employee benefits program.
Every program needs a road map to guide it along its path and tell users where it’s going. Understanding what you want to accomplish with your benefits program gives you something to work toward and creates the metrics used to measure its success. Since most benefits aren’t required (required employee benefits include: Medicare and social security contributions, workers’ compensation insurance, unemployment insurance, health insurance and family and medical leave), there are some things to consider when deciding what to include in your benefits plan:
- How competitive do want your employee benefits to be? Look at what’s standard in your industry and either match or up your benefits offering to help attract and retain employees.
- What role do you want benefits to play in your employees’ lives? Prior to the COVID-19 pandemic, employees were wishing for a better work/life balance, now they demand it. Today, more employees feel employers have a responsibility for their .
- Do you want employees to be able to customize their benefits? A one-size-fits-all plan doesn’t work well for companies with multigenerational workforces. Many employees want to be able to pick and choose their own benefits, according to SHRM.
Step #2: Understand your workers’ needs.
Understanding your employees’ needs will allow you to offer benefits that keep them engaged and productive. Consider the various characteristics of your workforce like generations. For example, Gen Z employees just starting their careers might appreciate the option of a lower-cost healthcare plan paired with an HSA. Millennials are more likely to take advantage of a parental leave plan than Gen Z employees or Gen Xers. Older employees may be more focused on programs that help them transition to retirement, such as an Individual Coverage HRA (ICHRA) for part-time work.
Other factors that might affect how you choose employee benefits are having part-time, contract or seasonal employees or a 100% remote workforce. Offering voluntary coverage, access to partial benefits or available networks per geographical location will go a long way towards attracting and retaining your employees. To find out what your employees want and need, survey them to get their feedback.
Step #3: Determine the budget and cost.
Benefits are an investment, accounting for one-third of compensation costs, but the reality is they are one aspect of what attracts and retains your employees. You want to make sure you put the right amount of money behind the right employee benefits.
- Spend too much and any savings from lowered recruitment and retention costs could be lost.
- Spend too little and you could see increased turnover, leading to higher recruitment costs.
Employers must balance the costs and how much is being spent on delivery. Cloud-based enrollment systems will almost always cost less than paper processes. Plus, with a fully or partially-remote workforce, paper might not even be an option. Your finance people can help you get a handle on the cost of benefits—including ancillary costs, and your broker can be an excellent resource for ideas and feedback about ways you may be able to save money while still offering a strong, competitive program.
Step #4: Develop the employee benefits plan.
Once you decide on your goals, needs and budget, you can determine what your benefits plan will look like. You’ll need to decide on the number of healthcare options as well as the plan design for each including deductibles, coinsurance or copays and out-of-pocket maximums.
Keep your healthcare plan options simple, there is such as a thing as too much of a good thing. Multiple healthcare options with multiple variations for each can be confusing. You want to provide some choices with multiple price points but not make the process overwhelming for employees.
Don’t forget to add some perks to your benefits plan. Giving employees the flexibility to work when and where it’s convenient for them doesn’t add hard costs to your benefits and they are perks employees want. Studies show remote work is more important than a pay increase for many employees.
Step #5: Communicate, engage and empower your employees.
Your employees may not approach your benefits with the same gusto you had developing them. To make sure all your hard work is appreciated, you need to communicate to employees how the benefits work, what the options are and how the benefits will improve their lives. Pick a few key points and use them to craft and send a series of short emails that employees can quickly digest. Post more detailed information in your benefits enrollment system.
Another possibility to get employees engaged is a monthly or quarterly Q&A session or regular benefits office hours. Chances are some employees will have the same questions so these types of events can be a more efficient use of time for HR staff while helping people better engage with their benefits, and it has the added benefit of you not having to write or design anything.
With so much depending on benefits, it is essential to get it right. An HR automated solution can enhance communication and transparency company-wide. You can also navigate compliance, secure, manage and transfer high-compliance data from internal and external systems, including sending data to insurance carriers, payroll providers, ERP systems and more.
Download our guide, How to Implement an Attractive Benefits Program, to learn more.