I would guess that 99% of employers started their group benefits package pre-ACA. Am I right? If so, what was your need for a benefits package? The most common answer I hear from employers is attraction and retention of top talent. This is exactly the case, yet many forget why it is they offer benefits. Get back to the basics. While the cost of employee benefits are continuing to rise, always remember it is an investment into your business and your employees.
Organizations are continuing to increase the value of their employee benefits packages yearly. The goals and focus of employers have expanded to include topics such as financial wellbeing, health and wellness, and work/life ratios. These benefits come at the expense of salary increases.
Employees are seeing shifts such as more flexibility with “office hours,” allowing for more out of office work as technology has shifted. Employers are also focusing on more attractive vacation packages, as time with family makes for happier employees. Happier employees result in high productivity. Higher productivity creates a healthier bottom line. However, the focus is not always solely about the bottom line of the company. It is creating and building a culture that develops you into an Employer of Choice, where you have your next top talent waiting for the next opening.
Turnover is expensive
Keep in mind, the cost of employee turnover ranges from 50%-150% of the total, annual compensation for a position. For sales or management positions, it can climb as high as 250% of compensation. No employer can afford this type of unnecessary expense, time and time again. Employee Benefit Consultants can help you control these costs.
“Research has shown that many job seekers frequently place greater importance on health care coverage, flexible work schedules and other benefits rather than on their base salaries,” states one report. Creating cultures such as this are not easy and it takes a special employer. This is much like the employers I choose to work with. They must have the desire to change the culture and value of the company to benefit their employees, which are their greatest assets.
I am not saying employees do not care about financial compensation; they just have more awareness for a work/life balance.
Costs are rising
As we all know with the Affordable Care Act, most employers have seen increasing cost of benefits. Many times, these costs are shifted to the employee and their family. Between 2003 and 2013, health insurance premiums rose 60 percent with only an 11 percent increase in income during that same time period, per a Commonwealth Funds study. With the rising cost and much shift to employees, employers are looking for ways to help keep their employees happy.
This is where we come in. Employers need to talk with their advisors about some of the variety of benefits in today’s benefit packages.
- Almost half of employers are now offering health savings accounts, which help employees pay to medical expenses on a pretax basis.
- There are also a couple of other advantages of health savings accounts, such as the pretax contribution by both employer and employees, plus the benefit of deferred tax accumulation through investments.
- Other options include Flexible Spending Accounts and Health Reimbursement Accounts.
- A major topic in our field is voluntary benefits, which is a must in a benefits package in my opinion.
- Some larger employers have put in mini medical facilities.
- How about daycare or pet care on site?
The options and opportunities are endless. More importantly your employees should be educated on the benefits you offer and given a total compensation statement, or “hidden paycheck” at least once a year.
My point being, there are many ways to accommodate your employees and their families. Although salary is usually top focus, many people looking for employment are focusing on alternative benefits. Be aware of your surroundings and competition. Be innovative, and be the fun company employees want to work for.