Benefits administration is an entangled process. You secure employees’ well-being through various non-wage compensations, hoping that it will optimize and retain human capital.
5 Steps To Tailor a Benefits Strategy
However, this costly endeavor will not pay back if your benefits strategy is not thought-out. Simply, up to 30% of your revenue may go down the drain without a well-design plan for benefits administration.
One of the solutions is to contact with benefits broker to help you manage the process. Nonetheless, a basic understanding of core principles is obligatory to adjust the policy according to time and its challenges.
We’ll talk about five steps on the way to tailor a sustainable benefits strategy. Yet, let’s start by explaining the terms.
The vocabulary of benefits administration
Firstly, employee benefits are compensations that companies give to their employees apart from the salaries.
These include some legally mandatory benefits like health insurance and medical leave and others, which employers choose to their liking. We’ll look at them further in detail to understand which are crucial to include.
Second, benefits administration is a process of managing your benefits program. It includes stages of creating one, operating it daily, and changing in line with the needs. The HR department is responsible for these actions.
Third, a benefits broker helps companies understand their needs, create a plan, implement and operate it. This person will work together with your HR department to ensure the efficiency of your benefits strategy.
On the other hand, a benefits administration platform is software that eases the process by collecting all the tasks in one place and providing guides to create a successful strategy. It’s a tool that the HR department uses to organize and administer benefits packages.
Why do we need benefits?
Shortly, some of them are mandatory by law. Wisely, they attract, retain, and increase the productivity of your talent capital.
It’s a competitive field as some benefits are valued highly by employees, and so they may base their job choice on the benefits package you are ready to offer them.
Furthermore, benefits planning is a great responsibility as you secure the employees’ well-being.
Without them, workers would need to pay for different essential services like health insurance and childcare from their salaries, reducing their pure income and limiting possibilities. Benefits are a valuable asset that employees appreciate and strive to find the best for themselves.
And now, let’s go step-by-step through the process of making a sustainable benefits plan.
Step 1. What does the law say?
Several benefits categories are obligatory by law. Keep in mind that the regulations are different depending on the state you are in, the number of your employees, and the current law set, which changes as the country’s situation requires it.
That’s why it’s convenient to have HR professionals who can tailor the strategy to the demands.
Here are primary benefits which employers must provide following the law.
- Taxes to Federal Insurance Contributions Act, Medicare, and Social Security. It is taken from workers’ gross income and must be paid by the employer.
- Compensations for work-related illnesses or accidents.
- Disability insurance, including childbirth. It’s not mandatory in all states, so check with your location.
- Leave in case of family or medical needs. There are different regulations, which apply to numerous situations.
- Health insurance.
Step 2. Get to know your budget and employees’ needs.
Before choosing additional benefits, review your current budget. Do you have enough resources to offer something else?
If the answer is yes, you’d better choose wisely to hit the point and create desired offers.
First, know the market. Is there a need for medical protection? Or a rise in the childcare and domestic service necessity? The outside world voices trends, and you want to catch them.
Second, analyze what your competitors are ready to offer. It’d be great to find a blue ocean, but more realistically, you’ll see a typical pattern, which works for most companies. Adjust it to your situation and provide the best quality.
Third, talk with employees. Statistics and market research do not show the full picture. Add qualitative methods to your creating process. Simply speak with people and hear their needs.
Step 3. Choosing in the benefits ocean.
The benefits package reflects your companies values. The offer will help you stand out among competitors and attract the right candidates for the job.
Here are several common alternatives to consider:
- Employees will grow professionally, and reskilling will boost internal mobility when workers look for a new calling inside the company instead of leaving it.
- Sports discounts or time for training within the working schedule. It will remove stress and bolster mental well-being.
- Help with domestic tasks. Childcare, flexible working time, and remote days are crucial for people with children, especially during the pandemic.
- Measures for team integration. Social turbulence causes alienation and hostility that lead to rifts in team relationships. Companies like McKinsey Accelerate strengthen team leadership and facilitate productive interaction.
Step 4. Keep an eye on world shifts.
That’s where your social life and benefits software may become advantageous. The former will help you see current trends and adjust the strategy accordingly, and the latter will compare the efficiency through periods and propose changes, respectively.
Basically, you need to analyze whether your strategy is working right. The year 2020 taught us to switch rapidly to remote working, making some benefits unnecessary while creating a demand for others like applications for remote working or vaccine expenses.
Apart from the annual checks of benefits packages, companies should stick with the current shifts and adjust strategy as quickly as possible to save the budget from wasteful spending.
Step 5. Find a platform for benefits administration.
We’re moving towards paperless management. The HR department is responsible for numerous communications, including invoices, billing, and paying, which are hard to moderate as they come from different sources. A benefits software like Tabulera is a convenient solution to keep all tasks in one place and visualize the process for employees.
The platform creates a transparent image of each customized benefits package and lets workers manage their perks independently. It saves time and human resources from redundant manual tasks.