As companies grow from small to mid-sized, the importance of evaluating costs becomes increasingly clear. Gartner defines mid-sized businesses as organizations that have between 100 and 999 employees and make more than $50 million, but less than $1 billion in annual revenue.
This means that although mid-sized businesses may be experiencing continued growth, they must find ways to keep employees satisfied and remain profitable. The best place to start this journey is by reevaluating the business’s existing employee benefits plan.
The Importance of a Great Employee Benefits Plan
A great employee benefits plan cannot be understated. Employee benefits are essential for the health and financial future of a workforce. Attractive employee benefits also make workers feel like they are appreciated for their hard work.
While salary is a major component when looking for a new job, employee benefits are also of vital importance. According to a Forbes Advisor survey, one in 10 employees reveal that they would take a pay cut to have access to better benefits.
Other key advantages of offering a great employee benefits plan include:
Stronger Employee Recruitment and Retention
Employee benefits are one of the surest ways to boost employee satisfaction and increase retention rates. A great employee benefits plan shows employees that the organization they work for cares about its employees.
Employee benefits, such as wellness programs, workplace perks and paid time off make workers feel valued. This can lead to increased employee retention. Jobseekers also look for positions that can help them achieve a healthy work-life balance and provide the benefits they need for the health and financial well-being of their families.
Improved Employee Morale and Productivity
Benefits can help improve employee morale and productivity. Paid time off, health insurance and similar benefits help prevent employees from worrying about common stressors, such as medical expenses and finances. When employees have less stress out of the workplace, they can be more productive and optimistic in the workplace.
Competitive Advantage in the Job Market
A great employee benefits plan can give companies an advantage in the job market. Organizations want top talent and talented individuals want jobs that provide them with the benefits they need to be successful. With an attractive benefits plan, employees are more likely to stay with their employer longer, resulting in reduced turnover.
In addition, employers will experience a lower time and cost commitment when dealing with departing employees and hiring new ones. According to a Training Industry Report published in Training magazine, companies spend an average of $1,111 per employee on training, money that could be better spent on other business endeavors.
Evaluating Your Current Employee Benefits Plan
Employee benefits plans amongst mid-size companies are unique. These businesses are not as large as major enterprises, but also not as small as your average mom-and-pop shop. This means that mid-size businesses must take a special approach toward customizing their employee benefits package.
Before an improved employee benefits plan can be developed, organizations must first evaluate their current plan. Here are some things to consider during this evaluation:
Identify Your Key Needs and Budget
The first step in evaluating an employee benefits plan involves identifying the organization’s needs and budget. Determining operational and financial objectives and restraints can give businesses guidance when designing and selecting benefits.
It is important to consider a range of factors during this process, such as employer size, industry, location and collective bargaining agreements. It is important to remember that benefits objectives should never be static but instead should be flexible to allow for regular evaluation and revision as employee needs and employer strategies change over time.
Understand Your Legal Obligations
Organizations should always consider the legal formalities of their decisions before moving forward with their employee benefits plan. Employee benefits packages must comply with state and federal laws to avoid repercussions, such as hefty fees.
Employers must adhere to different laws and regulations depending on their jurisdiction and the size of the business. For example, the Affordable Care Act (ACA) requires employers with 50 or more full-time employees to provide group health insurance coverage to employees. Failure to do so could result in fines and penalties at tax time.
Develop a Communication Plan
Employee benefits are only effective if employees understand what benefits are available to them and how to obtain and use these benefits. Developing a solid communication strategy is a key component of any benefits planning process to increase employee buy-in.
An effective benefits communication plan should:
- Create awareness of new or existing employee benefits.
- Encourage the wise use of employee benefits.
- Provide employees with a high level of understanding of available benefits.
Implementing an Effective Employee Benefits Strategy
Designing and implementing a well-built employee benefits strategy can help modern organizations navigate an ever-changing job market, attract top talent and minimize employee turnover.
However, there are certain things to consider when developing an employee benefits strategy, such as program goals. Having goals is essential to determine what benefits are best suited for the workforce and how to keep employees happy, healthy and motivated.
What to Consider When Implementing an Employee Benefits Strategy
Employee benefits have been found to improve efficiency in the workplace, enabling employees to perform better knowing that they are appreciated and have a certain level of protection for both themselves and their families. When developing an employee benefits strategy, it is important to consider all aspects of the process.
The foundation of a successful employee benefits strategy starts with ample preparation. When implementing an employee benefits strategy, consider the following:
- Benefits goals
- Competitor benefits
- Workforce demographic
Leveraging Technology and Automation
Technology permeates many aspects of the modern workplace, and the area of employee benefits plans is no exception. Benefits design is a strategic and complex process that involves assessing the needs of employees and choosing benefits and workplace perks that best meet these needs.
Technology and automation have been found useful in helping organizations collect and analyze data from focus groups, surveys and other sources to identify trends, gaps and priorities within the workplace. Online tools and software can also be used to compare costs, coverage and features of various plans.
The use of technology can also be advantageous when administering and complying with benefits plans. Businesses can use automation tools to streamline various tasks in benefits administration, such as claims processing, payroll deductions and reporting. Technology can also help ensure compliance with relevant federal and state laws, such as COBRA, ERISA and HIPAA.
Communication and Education to Maximize Benefits Utilization
While benefits are important to employees, many workers are not informed about what benefits are available to them, how to sign up for benefits and how to maximize their use.
Communicating with employees and providing them with ample education regarding benefits options and company perks is critical to achieving peak benefits utilization across an organization.
Partner with New City and Develop a Winning Employee Benefits Plan
Mid-sized employees evaluating their employee benefits plans should consider working with an experienced employee benefits consultant to build a plan that maximizes cost savings while delivering an attractive benefits package to workers. To learn how to get started structuring an effective employee benefits plan, contact New City Insurance at 888.210.2765 or request a consultation online.