Benefits

Am I Offering the Right Benefits Package?

May 16, 2018

Am I Offering the Right Benefits Package?

Benefits have always been a key factor in the employee-attraction equation, but recent research suggests they’re becoming even more important. Which means you need to get them right if you want to attract the best people and keep them feeling happy and fulfilled.

According to MetLife’s 2018 Employee Benefit Trends Survey, 62% of employees say benefits played an important role in their decision to take a job… and that percentage, the researchers found, is trending up.

So the question for you is, “How can I be sure I’m offering the right benefits mix?” Unfortunately, there’s no simple answer, but there are a few questions that can help you make that assessment.

Who is my workforce (and who do I want it to be)?

It’s simple, really: The kinds of people you hire (and want to hire) have a direct effect on the benefits you should be offering.

This is most obvious when it comes to age. For example, Metlife’s research shows that more than 90% of “Younger Boomers” (ages 51-64) consider medical insurance to be essential, but only 70% of Younger Millennials (ages 21-24) think it’s that important.

However, this isn’t just about traditional benefits. Recent studies have shown, for example, that Millennial workers are interested in programs that help them repay college debt, and they put a high value on the ability to work remotely and with flexible hours. Previous generations typically didn’t expect those perks.

Of course, this is about more than just age: Are your workers professionals? How educated are they? Do they have families? Answer questions like these for the people who work for you and the people you want to hire, then consider how those answers affect their benefit expectations.

Do I have the basics?

As an employer, you’ll find there are a few things you’re required to offer in terms of benefits, things employees will expect of you, things you need to offer in order to compete, and extras you might offer to stay ahead of the curve.

Let’s start with what’s absolutely necessary. These are the benefits that you are required by law to provide to employees:

  • Health insurance (companies with 50 or more employees)
  • Social Security, Medicare, and federal insurance contributions
  • Unemployment insurance
  • Workers’ comp
  • Family and Medical Leave
  • Overtime pay
  • Time off for jury duty, military service, and voting

Next, let’s look at what most employees expect in addition to required benefits:

  • Vacation days
  • Performance bonuses
  • Paid sick days
  • Flexible spending plans for health care
  • Retirement plans
  • Supplemental insurance benefits (life insurance, disability, and access to other types of insurance)
  • Well-being programs

Now, let’s consider the items that have become increasingly necessary to remain competitive…

  • Vision and dental coverage
  • Telecommuting and flexible work arrangements
  • Flexible spending plans for commuting
  • Coverage for domestic partners

… and items that are emerging as new trends in benefits:

  • Student loan repayment
  • Financial planning
  • Customizable plans

What about the intangibles?

Along with concrete things like pay and benefits, employees increasingly want intangible benefits from their jobs. For example, they want their employer to help them gain financial security (which explains the desire for student-loan repayment and financial planning), and they expect to find a sense of meaning in the workplace.

As an employer, you can’t offer a “Sense of Meaning” benefit or a “Financial Security” assurance, but you can offer benefits that demonstrate that you value such intangibles. For example, by offering financial support for personal as well as professional development programs or allowing time off for volunteer activities, you show employees you appreciate their desire for greater meaning. By offering financial-planning workshops, savings programs, and supplemental life insurance, you show them that you appreciate their desire for financial security.

How am I communicating benefits?

A rich benefits package that’s poorly communicated is just that – a poorly communicated benefits package. And as consumer-driven plans have taken hold, communication to and engagement from employees in their benefit selections have become increasingly important.

Employees need to be shown the value of the benefits you provide, and it’s up to you as the employer to help them see it. They need and want succinct communication around benefits that’s easy to understand and actionable.

Having a communication strategy in place is key to break through to employees, meet them where they are, and give them the tools to be successful consumers. Offering diverse channels of communication, and/or engaging advocacy and outreach programs will help employees feel the value of their benefits and remain engaged throughout the year – not just during Open Enrollment.

What’s the competition doing?

Benchmarking the marketplace (both geographic and industry) to learn what potential employees might find at other workplaces is essential. Even if you don’t match other employers benefit-by-benefit, being aware of what’s out there prepares you to respond to employees who might be tempted by another firm’s offerings.

As we work with our clients, we use national, regional, and local benchmarking data to review approaches and strategies in context with their market (industry, size, and location). At a minimum, these benchmarks are reviewed annually, but we often review them more frequently.

What’s my goal?

Having asked some basic questions, it’s time to assess the data in a broader context: What’s your benefits goal? Do you want your benefits package simply to be competitive, or do you hope to use benefits as way to separate your organization from the competition? Are you trying to meet today’s needs or prepare for the future? Are you hoping to reduce benefit costs, or are you willing to pay what it takes to offer a premium package?

Think seriously about your purpose. As with any area of your business, understanding what you’re trying to accomplish will go a long way toward helping you make good decisions.

As you can tell, I’m not offering you a simple formula for determining what benefits you should offer. The decision is too complex for a quick-and-easy answer. But if you answer the questions I’ve presented to you, you’ll have the insights you need to assess your benefits and decide whether they’re the benefits you need to you meet the needs of today and grow into the organization you aspire to be in the future. 

Written in collaboration with Ben Fuelberth.

Developing a Holistic Benefits Strategy