Let’s face it, one of the most important and costly issues for employers today is implementing and managing a successful employee benefits program.
“When it comes to retaining and recruiting quality employees, your benefits program is a critical component, and in most cases, it can account for 40 percent or more of total compensation costs,” says Ron Smuch, Insurance and Benefits Analyst at JRG Advisors. “Employers should take the time to implement a strategic, well-thought-out benefits program that meets the employee needs and the business objectives.
Smart Business spoke with Smuch about what employers need to consider to achieve a successful benefits program.
How do the objectives and budget shape these programs?
A successful employee benefits program has clearly identified objectives. If you’re offering benefits just so you can say that ‘we offer benefits,’ you’re missing the mark.
Identifying clear objectives will lay the groundwork and guidance to establish the selection and design of your benefits program. Keep in mind, the objectives should reflect both the employer and employee needs. Additional factors also to be considered include employer size, location and industry. Unless you have an open checkbook, budget is an equally important factor. If you already have a benefits plan in place, current benefits costs and projected costs should be analyzed.
Why are the employees’ needs important?
A survey or needs assessment should be conducted to identify the coverage, cost and network that reflect the needs of your employees. Benefits are by no means one-size-fits-all in today’s diverse workforce. Gaining feedback from your employees will increase motivation and satisfaction with the benefits program. Employee feedback can also help to prioritize which benefits would be most helpful in achieving satisfaction with the plan.
How can employers use survey data?
After analyzing the employee feedback, employers should prioritize the survey findings. For example, the cost of providing the prioritized benefits can then be evaluated and compared to the overall budget and cost sharing methodology.
This process can involve many factors. For instance, should changes be made to the current benefits plan design to promote cost savings? Can underutilized benefits not important to employees be eliminated? What cost containment features can be implemented? These are all important points to evaluate when considering the design of the benefits program.
Where does communication come into play?
Developing effective communication channels should be at the forefront of the planning and management of any employee benefits program. The only way to get employees on board is to ensure that they fully understand their benefits and coverage. Without employee support and satisfaction, an employer’s efforts could prove futile. If employee feedback was used as a determining factor in the benefits program design, employers should make employees aware of how their feedback influenced the design.
Additionally, communications with employees about benefits should extend beyond legal requirements. A good communications strategy and dialogue create awareness and appreciation, provide a heightened understanding of the benefits and promote wise use of the coverages.
What about ongoing evaluation?
Review and assessment of the plan throughout the year will ensure you are meeting employer and employee objectives. Many factors can impact the benefits program, such as the economy, regulatory environment and workforce demographics.
Set the measurements on your goals in order to assess the benefits program and quantify adjustments. The use of benchmarking data and periodic employee surveys further assist employers in evaluating the effectiveness of the employee benefits program.
Insights Employee Benefits is brought to you by JRG Advisors