The pandemic has had a lasting impact both on our economy and on our work environment. When rising inflation, product shortages, and a stricter regulatory environment are combined with new expectations in the job market, employers must be willing to embrace change. Unfortunately, change can be expensive, especially when it comes to benefits. To meet expectations in the job market and to keep existing employees happy, employers should maximize spending on benefits while still keeping overall costs on budget.
Employers should revisit their existing benefits strategy and update it to reflect the current economic environment and meet their employees’ needs. Here are just a few things to think about as you’re reviewing your benefits package.
Benefits can supplement salaries
Since 2020, many employers have seen their employees leave for higher salaries elsewhere. A common knee-jerk reaction is to raise salaries to match what’s on the job market. However, continuously bumping salaries to retain talent is not always the best solution. When a competitive salary is offered alongside a solid benefits program, good talent will want to stay.
Set goals for your benefits program
As you update your benefits strategy, set specific goals for the program. These goals will help you measure if your benefits program is successful over time. A great place to start is to consider the company’s overall goals. For example, if your company has implemented diversity, equity, and inclusion (DE&I) strategies in the workplace, have you considered how your benefits package aligns with those policies? In this example, you can evaluate your benefits in relation to your overall DE&I strategy by reviewing participant demographics. Are your benefits inclusive to all classes of workers? Are benefits affordable to all groups of employees? Does insurance coverage reflect the needs of all employees or only employees in certain income thresholds or living situations?
Benefits should promote overall well-being
Employee well-being should be an important consideration in your overall benefits strategy. Employee well-being is a broad term that includes preventive health care, mental health services, and financial wellness, and to maximize your employees’ overall well-being, your benefits package should address all three. Quite often, all three of these are linked. For example, if an employee is facing financial difficulties, that stress can lead to health issues and lost productivity in the workplace. Offering an employee assistance program (EAP) can help employees resolve personal problems so those stressors don’t impact their work performance.
Make packages appealing to all ages
A challenge for any employer is to meet the needs of all demographics of employees. Your workforce may be comprised of multiple generations, and each of those generations values something different.
What’s important to one generation is not necessarily important to the other, and employers should consider the needs of each respective age group. Offering an a la carte menu where employees pick and choose their benefits is an effective way to keep costs in line. To figure out how best to group these benefits, get feedback from your employees, either through surveys or smaller focus groups.
Benefits go beyond insurance, retirement
Insurance coverage and retirement benefits will make up the bulk of your benefits costs, but there are other aspects to your benefits package that employees and prospective employees will be looking at. Since the pandemic, work flexibility has become a critical component of an employees’ decision to work for a company.
The best part? You can provide flexible work arrangements to your employees at little to no cost, boosting the value of your benefits package. This will keep your employees happy and make your open positions more appealing to prospective workers.
Finding cost-effective strategies to build a more competitive and comprehensive benefits package may take some time, but if you think through and price out all the options, you can make improvements in no time. If you want to discuss your benefit plan with one of our CPAs, reach out to us today. We’d love to talk to you about what we think you’re doing right and where we see room for improvement.
This article was featured in Crain's Cleveland Business on May 15, 2023.