Employee Benefits Programs: 5 Steps to Building a Program That Won’t Break the Bank
Managing employee benefits program is a critical and costly venture for employers. Most employers will be required to provide mandatory benefits such as Social Security contributions, Worker’s Compensation Insurance, and Unemployment Insurance. But most other benefits will not be mandatory and will be determined by the employer.
Employee benefits programs vary considerably, but usually, they include life insurance, disability insurance, medical insurance, educational assistance programs, and more. Benefits selection and design are key components in the combined compensation costs. In some cases, benefits will account for 40 percent or more of total compensation costs.
Due to the cost investment and the importance of an employee benefits program in recruitment and retaining your top talent, you should build a logical employer benefits program. Something that will meet everyone’s needs and objectives, without breaking the bank. It is important to be tactical when you are deciding which benefits you will offer your current employees and future employees. To achieve this, your employee benefits program should:
- Help you achieve your overall strategic goals
- Align with your bandwidth or financial resources to offer the types of benefits
- Be realistic and meaningful
- Financially stable
These are all key points that you will need to keep in mind while designing and building an employee benefits program.
Step 1: Identify Your Company’s Objectives and Goals
Before building an employee benefits program, the first key step is to identify your company’s objectives and goals. Taking this step will provide a guide in designing and building your employee benefits program. This step will not result in the list of benefits. But rather outlines the objectives and goals that your company will need to cover.
Factors such as the number of employees you have, the location, etc. should all be taken into consideration while developing your employee benefits programs. When you have clear goals and objectives, you will be able to remain focused and practical as you choose the type you want to offer. Also, your key objectives to provide certain benefits will be:
- Attracting and retaining candidates who are a part of your target audience
- Operating within your issued budget
- Standing out with benefits in your industry
- Complying with federal laws, state laws, and local laws
The benefits objectives and goals are not uniform and should be evaluated and amended to reflect your current strategy and the needs of your employees.
Equally important is determining the financial resources you will have available to spend on employee benefits. If you currently have a benefits program, you should analyze the current benefits costs and future costs. The projected increases in some benefits will significantly impact the benefits you may offer. If you do not have a benefits program, you may want to obtain quotes for a few benefits you plan to offer your employees.
Step 2: Determine the Best Benefits Selection
The benefits you will offer your employees should be those that will really benefit your employees. When you know what your employees want, you will have the layout you need to design the program.
You will have a combination of veteran employees and younger employees within your company. When you remember this, you will already have a basic set of ideas that will be advantageous for all employees. You will also be able to build an employee benefits program that will align with your employees’ ideologies.
However, one of the keys to determining the best benefits selection is to know the required employee benefits and how much they cost. When you are aware of how much each employee benefit will cost, you will be able to include them in your budget.
Step 3: Conduct Surveys
Selecting benefits for your employees can be an ascending task, and you have to be very particular while determining the benefits. The employee benefits program you offer will be critical in achieving your company’s goals, objectives, and targets. How can you choose additional benefits that will be best for your employees?
The typical benefits will include health insurance, health plans, insurance plans, retirement plans, and more. Aside from these types of benefits, what else can you offer? To know exactly what employee benefits program you will offer to your employees, consider conducting surveys, assessments, questionnaires, etc.
A survey or questionnaire should have questions related to the benefits your employees want. After the surveys have been finished, you should have a better idea of what your employees need/want. And what they expect from the benefits program. The results from the survey will help you formulate a benefits program that will satisfy your employees.
Step 4: Choose Benefits That are Financially Stable
It is not just your choice of employee benefits that will count. But you also have to factor in the amount of money you will put into your benefits program. Your employee benefits program should be built in such a way that all benefits will fit your budget.
If you are operating a small business, you do not have to try to compete with bigger businesses. However, it is important to know what benefits your competitors are offering. With this in mind, you may be able to provide and highlight special perks, such as the following:
- Flexible work arrangements
- Flexible benefits platforms
- Health insurance
- Health wellness programs
- Educational opportunities
- Paid Maternity and Paternity Leave
When you offer special employee perks, you may be able to retain your high-quality employees and potential top candidates. Keep in mind that it is important that all benefits and perks will remain within your allocated budget and increase the budget over time. Taking this approach will help the growth of your business and your finances.
Step 5: Provide an Annual Statement
In order to help your employees appreciate the mandatory and optional benefits you provide, give them a comprehensive view of the benefits you will offer. This comprehensive view should include employee wages and the employee benefits you offer.
You can make your employee benefits program efficient and sustain it by improvising with additional features when you have the opportunity. An annual statement can help your employees fully appreciate any additional benefits you provide.
To give your employees a clear overview of the total compensation picture, the wages and benefits should be translated into a dollar amount. Your compensation statement should show the following:
- Health insurance amount
- Employee’s paid leave amount
- Disability insurance and life insurance amount
- Amount that is contributed to retirement accounts
To finish up the report, you should include the overall cost of the benefits you have already outlined.
We understand that keeping everyone happy, productive, and satisfied is a difficult feat to achieve. However, work on achieving this by having a well-built employee benefits program. Pioneer Benefits Partners can help you enhance every part of your employee benefits program. Contact us today to find out more about how we can help you build and execute a well-established employee benefits program.