What to Consider When Offering Employee Benefits
By Megan Schwanz, SHRM-CP
The benefits package you offer your employees is a key component of their compensation. It’s also critical to your ability to recruit and retain top talent. This is especially true given the current job market: a recent Gallagher survey found that 52% of U.S. workers are considering a job change this year. But determining which benefits to provide—and how to go about providing them—can be confusing. There are so many options, it can be hard to know where to start.
To help you take the right steps when offering benefits to your employees, here are a few best practices to follow.
Know what your people want
When choosing benefit offerings, you can’t simply assume what your employees want. Doing so puts you at risk of investing in benefits your employees won’t value. And, as we all know, benefits are not cheap.
So, how do find out your employees’ preferences for benefits? Ask them.
One of the best ways to do this is via an anonymous electronic survey. You can create one through online survey tools such as Google Forms, Microsoft Forms, and SurveyMonkey, to name a few.
Ideally, your survey should be specific and succinct—five to 10 questions at most. Use simple language but avoid questions that require a yes or no answer. Instead, ask employees to choose a preferred option from a list (e.g., would you rather have A, B, C, or D?) or to identify which of two options is more important. (When people are asked to select options they want, they tend to check all the boxes.) The goal of your survey should be to discover which benefits are most important to your people.
Something to consider: If you present employees with a survey, they will expect action to follow. For this reason, distribute a survey only if you plan to make a change to your employee benefits in the near future.
Consider your options
As I mentioned, there are countless options for employee benefits that stretch beyond health, dental, and vision. This means you can be competitive—and creative—with what you offer. Here are some options to consider:
- Health savings account (HSA)
- Life insurance
- Short-term and long-term disability
- Critical illness, accident, and hospital care
- Flex spending accounts (FSA): health, limited and/or dependent care
- PTO – Vacation, sick, holiday, bereavement
- Wellness programs/discounts
- Employee assistance programs (EAP)
- Volunteer paid time
- Flexible work arrangements
- Half-day Fridays
- Concierge services (e.g., dry cleaning, travel planning)
- Surprise holidays
- Family-inclusive benefits (i.e., paid +1 for conference travel)
- Birthday and anniversary celebrations
- Company-sponsored gatherings/food
- Meditation/quiet rooms
- Health insurance electives such as LGBTQ benefits (more than 4 in 10 offer domestic partner coverage), hearing aids, infertility services, or fertility treatments
- Pet insurance
- Vacation bonus
- Retirement support/financial advisor
Don’t forget about voluntary plans
An employer doesn’t always have to pay the premium. Cost-sharing or 100% voluntary benefit options allow your employees to decide what they want—and give you a way to offer a robust package. Offering this type of plan now, at a time when people want to feel protected and prepared, can be especially meaningful to your employees.
Remember, Section 125 Plan Document allows for pre-tax deductions per the IRS. Even if your employees pay for a benefit in full, they will do so tax-free.
Find the right insurance broker
Thankfully, you don’t have to sort through your employee benefit options on your own. Your broker should absolutely lead you through the process. That said, it’s important to work with the right broker—one who will act as your partner.
Your broker should go beyond understanding market data and trends; they should also have a firm grasp of your people, business goals, and budget. Only then will they be able to present you with a customized benefits package that adds value to your people and is worth the investment
What’s more, you need a broker who is proactive and creative. Your broker should come to you with options and take charge of open enrollment and employee education. When it comes time for renewal, your broker should give you plenty of options and be involved.
Educate your employees
Are you seeing low employee participation? It could be the result of lackluster education. If your employees don’t know what benefits are available, they aren’t likely to use them. And they certainly won’t value them.
This is why it’s so critical to educate your employees about their benefits—i.e., your investment. Ideally, education should take place in the form of a sit-down presentation and be focused on what employees get. It should be professional, exciting, and impactful. Your broker may even have a YouTube or Brainshark presentation they could share.
Opportunities for education:
- Orientation and eligibility
- Open enrollment and renewal
While your agent should take care of the first two education opportunities, your Human Resources designee should manage education throughout the year. To accomplish this, consider setting a calendar of notifications to highlight employee benefits each month. For instance, during Mental Health Awareness Month, you could remind employees about the mental health support available through their EAP.
Employees also need a familiar resource they can go to with questions. If your agent isn’t willing to fill this role, designate an internal staff member as your “in-house benefits expert.” This individual must know the plans and coverage inside and out. If an employee has a question about their benefits, the answer should never be “I don’t know.”
Finally, be transparent about how much your benefits cost, so your employees know how much you value them. You can do this by providing employees with a detailed “total compensation package” that lists out their salary as well as the value of their benefits. Share this with each employee when they’re hired and at the start of each year.
Put your people first
Choosing an employee benefits package isn’t easy. But offering one that makes your people feel engaged and valued can go a long way toward keeping them on board and attracting new talent. If you know what your people want, partner with a proactive broker, and educate your people, you’re bound to create a positive employee experience. And that’s what it’s all about.
Megan Schwanz, SHRM-CIP, is a senior associate in Abdo’s HR Advisory group. Reach out to get in touch with Megan or another member of the team to discuss benefits offerings for your organization.