When it comes to your employee benefits strategy, offering a broader choice is directionally appropriate for most organizations. However, it does not mean offering a plethora of options is right for your business or for your employees.
This is why establishing a benefits framework is critical. A framework enables your organization to clearly articulate your benefits strategy and approach. It should also include your employee values and preferences, identify your culture, and indicate any aspirations specific to diversity, equity, and inclusion (DEI). A framework ensures your program aligns with your organizational goals, including your recruitment and retention strategy. It enables your organization to prepare a thoughtful annual review versus a reactive approach based on the rising costs of healthcare coverage or in a knee-jerk response to what your competition may be doing.
Where your employee makeup is diverse, then your framework may need to focus on critical workforce segments — a group, role, or family of jobs that drive a disproportionate value or impact within your organization. Once you understand the makeup of these segments, then it needs to identify what benefits resonate within those groups, how they stack up against your competition (remembering competition could be well outside of your industry), and how to transition over time to more meaningful benefits for these employees.
Strategic employers also use benchmarking to gauge the prevalence and effectiveness of cost containment measures. However, while benchmarking is a key component in this process, it is not the final word. It is usually not advisable to look too granularly at benchmarking data. For example, the best data is not necessarily gleaned from comparing to a specific industry in a particular region. Some organizations may need more focused benchmarking (e.g., non-governmental organizations, healthcare systems, higher education), where there may be other trade-offs in total compensation or the need for hyper-specialized talent.
It is important to look at your entire employee benefits program through both a short- and long-term business strategy lens. Short-term benefits strategies must consider the impact of any acquisitions, divestitures, or large layoffs. Your long-term strategy should specify the goals of your employee benefits program and how it needs to evolve with your business objectives. Part of the business analysis should be evaluating how critical the benefits program is to recruitment and retention, as well as what your organization can afford.
Organizations who manage benefits strategically think about the program early in the year and then review it at least annually. Using a benefits framework is just one of four key pillars that can help your organization optimize your recruitment and retention strategy.
Ask your Risk Strategies representative (or contact us) for our latest whitepaper, Benefits Strategy Planning in Today’s Economic Headwinds, and learn the four critical pillars needed for true optimization.
With more than 7,000 clients managed in our National Employee Benefits Practice, Risk Strategies delivers the high-quality, cost-effective, and compliant benefits programs and solutions employers need and employees value. Visit risk-strategies.com for the latest observations in employee benefits or contact us at benefits@risk-strategies.com.