Employee Benefits Strategy: How Organizations Stay Competitive in Today’s Labor Market
Estimated reading time: 6 minutes
I know a lot of organizations are very focused on their recruitment efforts right now. It’s a challenge to find qualified candidates. But once you find those great candidates, organizations need to have an employee experience that’s going to retain them.
One topic that’s getting a lot of conversation these days is offering better pay. But some organizations might not be in a financial position to do that. That doesn’t mean you don’t have options to stay competitive. I’ve worked for plenty of organizations where I did not make a huge salary, but the benefits were great. Organizations should not ignore the value a competitive employee benefits package could bring to their recruiting and retention efforts.
There’s an upside and downside to the strategy surrounding employee benefits. The advantage is that organizations have so many options. The downside is that organizations have so many options!
To help us understand the current employee benefits landscape, I asked Jeff Faber to share his thoughts. Jeff is the chief strategy officer for the HUB Employee Benefits Practice. In his role, he is responsible for helping organizations leverage their data to provide employment-enhancing cutting edge initiatives.
Jeff, welcome to HR Bartender! This first question might sound very basic but I’m not sure that it is. Why should organizations develop an employee benefits strategy?
[Faber]An effective employee benefits strategy aligns company goals with the employee value proposition to increase retention and productivity. At the end of the day, it’s simple: Does our employee benefit portfolio meet/match the needs of the employees who will carry us into the future? Does it contribute to someone being present and productive in our current state?
Whenever I think of strategy development, I think analytics. How can organizations use benefits analytics to help them develop better benefits programs?
[Faber] Analytics are important, but we too often focus on claims and enrollments that are backwards looking. Instead of first focusing on what claims are driving our costs, why not understand the foundations of our workforce?
Looking at demographics, geographic footprints and other key statistics allows us to define the needs of the workforce from a benefits perspective. Once we know the people, we can finetune the plans that fit their needs and construct ways to ensure those plans perform. It always starts with the people. This is true of employers of every size. Typically, we only get claims or decision data for larger employers.
Years ago, cafeteria style benefit plans were popular. Employees could select a personalized benefit plan to meet their unique needs. With all the talk today about offering employees a personalized experience, should organizations reconsider a cafeteria style benefits package? Why or why not?
[Faber] The beauty of a cafeteria plan was that you gave everyone the same monetary means to choose. This often led to some parts of the population buying down to lesser plans to save money. Considering the plan designs and the cost of using those plans, many people were suboptimizing their spend. Choice is great, but too much of it leads to buyer’s remorse, confusion, and suboptimal decisions. That’s been the problem with exchanges and marketplaces as well. Employees need tools to sort and filter what is important and guidance to show them the value for them personally.
I believe we’ll find Individual Coverage Health Reimbursement Arrangements (ICHRAs) to have a similar result. They are predicated on employee choice and employer savings but feels like the cafeteria concept, except it puts employees and their needs even more beyond the reach of HR guidance and support.
There’s a balance in creating access to low-cost or no-cost benefits that cater to parts of your population. From the single parent to the empty nester to the young and single, everyone approaches benefits differently. Staging and framing benefits to each person is the personalization part companies attempted to replace with a cafeteria style plan. In reality, it is creating content that explains, educates and empowers in different ways to these audiences. It’s hard work, but worth it. A good benefits program is not ‘one size fits all’.
Employee feedback is essential for evaluating the company’s benefits package. Can you share a couple of ways that organizations can gather good employee benefits feedback?
[Faber] It isn’t in exit interviews! We’ve found that benefits are often the scapegoat instead of ‘I didn’t get along with my manager.’ Or ‘I could make more money over there.’ It’s the safe out.
Pulse surveys, focus groups and the use of people analytics like HUB Workforce Persona Analysis help identify the parts of a population that will respond and value a specific feature or benefit. In a high trust environment, open dialogue is easy. Making it clear that the time spent giving and gathering feedback will be valued is paramount. Making it clear that leadership cares about the answers and will respond is important.
Asking a smarter question is always better than asking more questions. We spend the extra time to write questions that don’t force the answer we are looking for. Open answers instead of yes/no, branching logic instead of static questions and surveys that are easy to complete and anonymous are our best practices.
Last question. Are there emerging benefits that organizations should be considering? If so, what are they?
[Faber] Organizations must think beyond their traditional medical, dental, and vision boxes. Organizations can participate, access, or build benefits that employees cannot on their own. Leveraging this power and sharing it with employees is crucial!
The idea that an employee could have access to resources to help with their aging parents, access long-term care insurance, and save money on their homeowners insurance or a loan or a warranty, when they can’t access these by themselves at the current pricing is reason enough to evaluate this as a part of the program. Beyond this, employers are looking at creative ways to improve mental health and add customized career coaching for interested employees. An employer who saves their employee time, money, and headaches has a more available, financially stable, and happier employee! Why wouldn’t we do this?
Why wouldn’t we do this is absolutely right. A huge thanks to Jeff for sharing his experience with us. If you want to stay on top of the latest employee benefits topics, check out the employee benefits publications and articles on the HUB website.
Benefits are an important piece of an employee’s overall compensation. Yes, employees do need a competitive salary. But benefits are an opportunity to set the organization apart. The benefits that a company offers say a lot about how much they value employees and their wellbeing.
Image captured by Sharlyn Lauby while exploring the streets of San Francisco, CA
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