Recent years have significantly changed the employment landscape. Companies everywhere are battling to recruit and retain talented employees. In an economy where workers may have the upper hand, the first response of employers is often to raise salaries and wages. However, research shows that a competitive benefits plan is increasingly vital in attracting and retaining skilled workers.
What is a competitive benefits plan?
According to a survey by the Adzuna job search site, the five most in-demand benefits for 2023 are:
- Health and wellness
- Family planning
- Tuition Reimbursement
- Volunteer days
- Flexibility
Of these, healthcare is consistently rated as the most important. Recent surveys have found that 54% of employees are happy with their employer-sponsored health benefits package.
How can a benefits package address cost and choice issues?
But to be considered “competitive,” benefit programs must do more than provide just the essentials. The pandemic has significantly changed what employees value, especially from their employer-provided benefits. Companies must now offer more choices while balancing costs for themselves and their employees. More than ever, employees seek security in their physical, mental, and financial health and well-being.
Although healthcare benefits remain a top employee priority, Employers should pay attention to retirement planning, paid time off, and other benefits. When considering the value of a benefits program today’s employees want a well-rounded plan that meets multiple personal needs.
What can a competitive benefits plan do for employers?
A top-tier benefits plan is essential for becoming an employer of choice. It gives companies an advantage when recruiting top talent and motivates skilled employees to stay with the employer longer. For employers, a competitive benefits plan can reduce turnover and lower the time and cost of processing departing employees and hiring new ones by:
- Improving morale and employee engagement
- Boosting productivity
- Enabling more consistent delivery of your product or service
- Providing a better experience for your customers
- Leading to a healthier bottom line
Benefit plans are a powerful tool for keeping employees engaged. However, they only work to the extent that they meet workforce needs. Therein lies the challenge for most employers. Because people are working longer than ever, today’s employment landscape contains four different generations of workers with different values and benefit priorities:
- Baby Boomers – born between 1946 and 1964
- Gen X – born between 1965 and 1980
- Gen Y (Millennials) – born between 1981 and 1995
- Gen Z – Born after 1996
Generational Preferences
Baby Boomers value salary levels, health insurance, and retirement plans, while Gen Xers balance the desire for higher salaries and 401K plans with job security, career advancement opportunities, and work-life balance. Then there are Millennials, who grew up in a world of rapid change and seek paid time off, the ability to work remotely, scheduling control, and a high level of flexibility.
Even the need for health insurance varies by generation. For example, due to age and more health issues, Baby Boomers tend to prioritize healthcare (this declines somewhat once they become eligible for Medicare at age 65). Millennials often place less priority on health insurance than other generations, but they still want options to sign up for it. Millennials tend to choose the lowest-cost healthcare options, many opting for High-Deductible Health Plans (HDHPs).
If there’s one thing all generations agree on, it’s the need for customized benefit plans that allow workers to select the benefits they need and opt out of the ones they don’t.
How can I create the most competitive benefits package?
The more diverse your workforce, the more research you may want to conduct to ensure your benefits align with actual employee needs. To create a competitive benefits package, research should include:
- Benefits focus groups. Regularly ask employees for feedback on various benefits, from healthcare to retirement, paid leave, and wellness programs.
- Employee surveys. Have employees rank their satisfaction with the current benefits plan. What would they like to have that isn’t available, and what benefits no longer resonate?
- Plan usage tracking. Which plans draw the highest and lowest enrollments?
- Constantly communicating benefits value. Educate employees so they understand their benefits and how to use them. Assist them in making the right benefits choices for their needs. (Many plan providers will offer advisors to work with your employees.)
- Making plan usage as simple as possible. Have efficient, simple processes for enrollment, claims, and payments or reimbursements. Make it easy for employees to get problems resolved promptly. If possible, work with a Third-Party Administrator (TPA) specializing in employee benefits and first-class customer service.
A competitive benefits plan sends a powerful message to employees that you care about their quality of life and their contributions to your company. Having one makes for a more loyal, engaged workforce and reduces employee turnover. From a recruitment standpoint, competitive benefits position you as a leader in your industry and the kind of business where people want to work.