What do High Turnover, Low Engagement, and Low Participation levels have in common? The answer may lie within your corporate benefit strategy. When you think about the evolving workforce and the fact that by 2025, 75% of the workforce is millennials, there is going to be a massive labor shortage in ten years because of all the baby boomers retiring. With that labor shortage, businesses are going to see a major up-swing in their cost of labor and this will have a dramatic impact on their bottom line in the future. In order to remain competitive, a comprehensive benefits strategy will be needed to attract and retain talent.
I read in a recent case study that fewer employers are offering health insurance today. In fact, in the year 2000, 69% of employers offered health insurance compared to 58% today. Another interesting fact is that due to the rising cost of healthcare, many employers have been forced to increase deductibles and pass more of the premium expense along to employees. This is a tough challenge when you consider the fact that benefits are almost right up there with compensation as it relates the employee/employer relationship and how that ties back to increasing loyalty and engagement with employees.
An article from 2020workforce.com illustrates this point when asking the question:
These considerations are extremely important because according to Gallup, companies with engaged employees deliver results. In a recent survey they showed that 69% of employees are disengaged at their job but those employers with highly engaged employees have 22% higher profitability, 21% more productivity, 10% higher customer satisfaction, 65% less turnover, 37% less absenteeism, and 28% less shrinkage! The kicker here is that 57% of employees say they would be willing to accept a job with lower compensation but a better benefits package according to an article from "WorldofWork". Point being, as companies try to control rising labor costs in the future, a comprehensive benefit strategy that works for everyone will be a requirement.
In my experience, most companies would like to offer competitive benefits and employ a benefit strategy that works but have challenges that get in the way including: limited capitalan evolving workplace and unpredictable costs associated with the affordable care act. When I work with my clients, we consider many factors in our benefits discussion and below are a sample of the most important considerations when focusing on a comprehensive benefits strategy.
Things you must consider in a benefits strategy:
- Generations in the Workforce
- Average Wages
- Diversity of the Workforce
- Competition for Talent
- Employee Geography
You must also carefully evaluate your plan options including:
- Total Premium
- Employer vs. Employee Contribution to premium
- Network of Doctors
- Co-pays or Co-Insurance for office visits and specialist
- Out of Pocket Maximums
This is all well and good but it takes a ton of time!!! This is especially compounded when you consider many small to medium sized organizations simply lack the tools an infrastructure to support a comprehensive benefits strategy that even works!
Incidentally, this is what I do for a living at ADP. When you consider all the items that go into benefits administration, the actual act of offering benefits is commoditized to an extent but how efficient the process is and the type of tools, technology, and people involved in supporting our clients comprehensive benefits strategy is my far the most important aspect to becoming an employer of choice. In fact, many executives that I work with have been laser focused on reducing administrative costs surrounding benefits administration but in today’s business environment when you look at the sheer complexity of health care reform and the multitude of changes and implications that HR professionals must absorb and communicate their organizations, the focus has been on finding creative solutions to avoid the costly penalties for non-compliance!
Therein lays the challenge, when an organization lacks tools and infrastructure to keep up with the ever-changing and non-stop regulations, there is little time left to deal with the comprehensive benefits strategy that drives the result indicated by Gallup. If this sounds like your company, We should talk! I guarantee your company will be better off for it! At ADP, I help companies control costs and develop comprehensive benefits strategies that involve the entire life cycle of the employee - from Recruiting to Retirement!
Off my Soap Box..
Until Next Time,