4 Steps to Enhancing Your Benefits Offerings to Meet the Needs of an Ever-changing Workforce
The primary objective of any strategic plan, specifically an employee benefits strategic plan, is to address internal and external factors that will impact the development of an effective benefits program that drives business growth. By building a strong, long-term strategy, you’ll build consensus among key business stakeholders. When an HR professional elects to develop a 3-5-year benefits strategy, it will give them a seat at the decision-making table and solidifies their standing as a trusted advisor completely transforming the role.
They’ll have the ability to:
- Assess the current needs and resources of their organization
- Define staffing objectives based on business goals
- Plan and design benefits strategies, including needs, assets and outcomes
- Participate in budget forecasting
- Measure engagement and results
But it’s not always obvious to determine exactly how to transition from a reactive position to a strategic position. Employers are focusing more attention on their benefits package as a means of preventing turnover, attracting top talent and growing within their industry. As employers start to recognize the realized potential of employees as a resource, they can create programs that support employees in unleashing their potential and excelling in their personal growth.
This recent trend has uncovered a new reality in the workforce, that benefits matter and adopting the right benefits strategy is vital to yield positive results. By understanding this shift in how benefits are viewed and utilized, HR professionals can offer their expertise, adding incredible value and becoming a significant resource in developing a long-term solution to attract and retain the best talent.
Check out these 4 ways to develop a lasting benefits strategy that supports a diverse and multigenerational workforce:
Evaluate Your Current Workforce
Implementing a multi-year strategy requires employers to become in tune with today’s modern workforce as it continues to revolutionize at a rapid pace. In general, employers have a more diverse and multigenerational workforce than ever before with differing needs based on their generational tendencies and what each generation values. The unique aspects of each group require employers to think beyond the core benefits package to accommodate the diverse needs of any given employee population. When creating a multi-year approach, plan to revisit and adapt areas of your program as the workforce continues to change based on economic, personal and geographical needs. These elements are essential to pay attention to and review annually at a minimum but more realistically semi-annually or quarterly. Developing a consistent process can give employers a better understanding of the needs, wants and overall satisfaction of their employees. In many ways, the economy can also be a driver for how employers evaluate their workforce. This approach can be a very impactful way of evaluation considering how employees are affected by the local, national and worldwide economy.
Understand Your Cost-Drivers
Having a financial plan for your benefits package can be a great starting point to develop a multi-year approach. Think about the parameters for your groups’ goals or merit achievements that help drive financial stability. With careful planning, you can offer a competitive and generous benefits package. Employee benefits packages can be costly and have the potential to rise exponentially without proper management and understanding. Generally speaking, core benefits tend to be the most costly whereas some of the additional benefits offerings, such as health and wellbeing, financial protection and retirement can be less expensive but equally valued by employees. This approach can provide employers a better understanding of their cost drivers through analysis and can help create a strategy that develops solution-orientated results to control cost. Taking a financial plan and building a benefits portfolio with a 3-5-year approach can help employers engineer a well-rounded benefits program that covers these areas. By offering a range of benefits, you can better accommodate the varying needs of a multigenerational workforce.
Give Your Employees Options
Adding voluntary benefits and enhancements can only do so much to accommodate any gaps in your benefits offerings and if not properly evaluated, can have little impact in helping to control the cost of the core benefits. In some cases, the consideration of voluntary benefits is driven by the employer’s financials and risk associated with what is typically their second largest expense. While satisfaction should be a key element of evaluation, employers need to monitor the effects of their benefit offerings to determine if the benefits package aligns with the cost expectations for both the employee and employer. Within a multi-year strategy, it is necessary to evaluate the overall flexibility of the benefits package. Providing employees with the choice of benefits elections allow them to allocate employer-provided funds toward additional voluntary benefits that help address the diverse needs and values of each employee.
Consider Alternative Funding Arrangements
Never underestimate the power of evaluating different funding mechanisms. These differ based on cash flow and risk tolerance. According to the U.S. Department of Health and Human Services, about 26 percent of employers between 100-499 employees self-insure as compared with more than 82 percent of employers with 500 or more employees. As medical costs continue to rise, self-funding has become a mechanism to help stabilize medical coverage risk. There are many different funding mechanisms available in the market that allow employers of all sizes to benefit from self-funding in good claim years. When provided with strategic advisement, employers can adequately evaluate their risk and understand the areas needing improvement. When budgeted appropriately, employers can lower their risk level, have a better handle on cost fluctuations and increased flexibility in the budget, ultimately resulting in the ability to construct a better benefits package for employees.
Committing to a long-term benefits strategy will position your organization for growth and forward progress no matter what the future holds. Connect with a OneDigital Consultant in your area to learn more about crafting the right long-term strategy for your team.