Dynamic benefit programs and offerings are essential for employers trying to compete in an ever-changing business climate. Changes in the economy, federal regulations, and workforce demands make it imperative to assess and adjust offerings at least every two to three years.
To navigate the complex question of what benefits to offer, employers should identify goals and measurements to assess their benefits offerings and make adjustments as necessary. Start tracking metrics when new benefit programs are implemented and plan for a regular review and assessment to ensure you’re realizing the most value from what you offer.
As you determine how to assess your benefits, consider these ten suggestions, and implement at least three to five as ways you’ll monitor the success of your programs.
1. Track usage
Start with the low-hanging fruit: Analyze the numbers. Are employees using the benefits you offer? If so, which ones? For example, what percentage of:
Staff members are maximizing your 401(k) match?
PTO days are used each year?
Employees participate in commuter benefits?
Participants are using health care benefits?
These usage numbers will help you evaluate if your benefits programs are meeting employee needs. Low usage numbers may indicate that further communication about what’s available is required. Alternatively, if you find small usage numbers are due to little interest, you can modify your offerings accordingly.
2. Ask employees for input
Aside from tracking usage, one of the easiest ways to assess if your current benefits hit the mark is by asking employees for feedback, i.e. through conducting focus group sessions or employee surveys. If you’re willing to receive feedback, employees will appreciate the opportunity to share their insights and thoughts around the most desirable benefits. Just be sure you communicate that you may not be able to implement every change they request, but that you’ll carefully consider the insights they provide.
3. Review turnover rates
While no single benefit drives retention, innovative benefit offerings demonstrate that your company cares—and that sense of trust can drive retention. As part of your assessment, review and monitor turnover rates for possible links in benefits changes and employees leaving the organization.
4. Monitor absenteeism
Employee stress is a significant contributor to absenteeism. The right benefit offerings can help employees reduce stress—through mental health care, exercise, and wellness programs. When assessing your benefits programs, high absenteeism rates can be an indicator that employees aren’t taking advantage of programs that would help, or that you may need to find new programs if there’s a gap in your current offerings.
5. Evaluate benefit program expenses
Calculate the percentage of your payroll spent on benefits. The Bureau of Labor Statistics reported that for private employers, benefits accounted for 30 percent of total compensation costs, while salaries and wages accounted for 70 percent. Factor in these ratios when you’re assessing if and how your plans meet your budget.
6. Review benchmark information
As part of your assessment process, seek out information, and research about top benefits offerings. As this report from Harvard Business Review indicates, employees and job seekers weigh benefits options when deciding between a high-paying job and a job with more perks. Use national averages to help inform you about what employees want most from the benefits you offer.
7. Evaluate your benefits communication vehicles
Collect data available regarding benefits-related questions (e.g., help desk calls, website hits, or online chats). Use this data to uncover any trends. If your service providers receive many questions regarding one of the benefits you offer, it may indicate employees don’t have the information they need. It may also suggest that it’s an essential benefit because employees use it often.
8. Use exit interview data
Job candidates decline employment offers for many reasons. When your recruiting team follows up with candidates, be sure they inquire if benefits had any impact on why they chose to decline employment. If you notice a trend in these responses, use that to assess what changes may be necessary to entice potential talent to accept what you have to offer. Examine each benefit based on its unique metrics.
9. Measure program-specific results
Depending on the benefit type, there may be metrics you can use to measure and assess if a program is successful. For example, if you offer a smoking cessation program, track how many employees have successfully used the program. If you provide wellness programs around fitness, look for positive indicators that employees achieve positive results (e.g., reports of improved financial wellness or increases in steps walked each day).
10. Compare against competitors
Every year, review your benefits mix against your competitors’ offerings. The Society for Human Resource Management (SHRM) cautions that it’s best to look at similar companies to see what’s trending in employee benefits. Rather than trying to compete with cutting-edge companies, look at your peers for insight because they are the employers with whom you’re competing for top talent.
Spending on employee benefits is among the top five expenses for most organizations, according to SHRM. If you’re making that investment, it’s worth the time and energy to assess your offerings and ensure they’re meeting organizational and talent needs. Effective benefit programs are a necessity for any organization that wants to attract, engage, and retain the workforce required to move the business forward.
During a review of benefits programs, consider the retirement offerings. Human Interest helps small businesses set up, implement, and maintain a 401(k) for their employees. We’ll take care of creating employee accounts, processing contributions every pay period, syncing them with your payroll provider, and ensuring that compliance testing and paperwork are handled. To learn more, click here to contact us. We are happy to help!
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The Human Interest TeamWe believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers.