When your employees are worried about health and financial issues, it has serious consequences for your business. If your employees can’t focus and suffer from stress and related problems, the result is a disengaged workforce and lost productivity.
An effective employee benefits plan plays a critical role in keeping your team engaged and focused on achieving work goals, and helps them see their work life as beneficial to their personal needs, instead of a detriment.
If your company is seeing a rise in sick days and requests for more time off, it’s time to rethink your employee benefits plan.
Is Your Benefits Plan Leaving Some Employees Behind?
Initial questions to consider would include:
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Is the plan you offer in line with benefits offered at other companies?
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Do employees take advantage of the benefits?
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Are employees leaving your company to join firms that offer better benefits?
A good employee benefits plan is one that adds value by effectively reducing risks for the individual employees at a cost that’s fair to both the employer and the employee.
To achieve this value, it’s important to start by assessing how well your current plan serves various types of employees across your pay ranges.
If your company offers a 401(k) plan as part of its compensation and benefits package, is it designed in a way that includes employees on the lower and median pay range? For example, offering a contribution match with an extended vesting schedule might be fine for highly compensated employees and executives who have greater confidence that they’ll reap the long-term benefits, but it could discourage lower-income employees from participating.
Similarly, if the cost of basic health insurance you offer would represent more than half of some employees’ monthly income, that’s not a viable option for employees in that pay range. Those employees are more likely to try to squeeze by with cheaper options and neglect basic preventive care. This tends to create an unhealthy team that’s going to affect everyone and have a negative impact on productivity.
If that situation sounds familiar, look for ways your company could offer health benefits that are realistic in the context of their other expenses. Again, it comes back to reducing risk at a cost that’s fair to the company and the employee.
3 Tips For A More Valuable Employee Benefits Plan
- Include an employee committee in decisions about benefits: Too often, companies offer a plan without first gathering input and feedback from the employees, resulting in benefits that makes sense for some, but not all. A more inclusive decision-making process helps to maximize the plan’s value for all employees.
- Offer workshops and materials to educate people on benefit plans: If employees don’t fully understand the individual benefits available to them, they often waste money on the wrong options. Life insurance is a good example. Employees opt for it because the insurance seems inexpensive per pay period, but they would often do better by owning their own individual plan or by putting that money away in their retirement plan.
- Work with employees on how to evaluate their personal finances: Offering financial planning resources in addition to a 401(k) plan is one way to help employees put their personal financial matters in order, and that’s a benefit for the employee’s entire family.
In the end, the more value employees see in your benefits plan, the better they feel about their compensation and work-life balance. That in turn makes them less likely to move on to other companies in search of a better benefits package.
Worried about the cost of your current 401(k) plan? Request a free, 30-minute consultation with Richard Brothers and start maximizing your plan’s value.
