Employee Benefit Packages Need Strong Communications
Employee benefit packages are a key differentiator in today’s ultra-tight labor market. At 4.4%, unemployment currently sits at a 4-year low in the U.S., making employee benefit packages even more important than usual. There is also a rising number of aging Baby Boomers exiting the workforce. What’s more, at nearly 63%, the percentage of working-age Americans in the workforce is near a 40-year low. As such, today’s workers have a lot of opportunities — and a ton of choices — when it comes to seeking employment. That means your organization’s employee benefit package offerings are likely a strong deciding factor for potential candidates, so they’d better be competitive.
A recent article in the Dallas Business Journal suggests that employers are attracting talent by understanding workers’ needs and offering a benefits menu that’s customized for employees’ unique stages of life. Organizations that offer a strong employee benefit package lineup, and provide employees the knowledge and tools to maximize their health and retirement benefits are more likely to gain a competitive edge, according to the article. It offered these four tips for leveraging employee benefits to attract and retain top talent:
- Offer an employee benefits package targeted to both younger and older employees: We wrote recently that employers must think creatively when offering employee benefits to a generationally diverse workforce with varying needs and priorities. A recent Glassdoor study cited in the Dallas Business Journal supports this thesis: employees age 18 to 44 prefer benefits or perks to pay raises, compared to those age 45 to 64. Moreover, 77% of Millennials would be willing to take a pay cut in exchange for long-term job security, according to Qualtrics’ Millennial Study, again cited by the Dallas Business Journal. Moreover, 64% of millennials say benefits are extremely or very important to employee loyalty.
As far as older workers go, they crave learning new skills. Help them extend their careers and continue to add value to your organization by offering them an employee benefits package offering an array of training opportunities. Health savings accounts (HSAs) and elder-care benefits are also appealing for older generations who choose to remain on the job longer and can help them as they transition out of the workforce and into retirement when they’re ready.
In short, younger or older, employee benefits matter. And the more tailored they are to your employees’ individual needs and stage of life, the better.
- Educate employees on new healthcare options: Many companies today are choosing to implement high deductible health plans (HDHPs) paired with a health savings account (HSA) or health reimbursement arrangement (HRA) in an effort to reduce employee benefits costs. However, many employees need help understanding the new health benefits landscape. Bank of America Merrill Lynch data cited in the Dallas Business Journal finds that while Millennials’ interest in HSAs has increased, only 50% are confident that they have a strong understanding of their employee benefits. One idea is to offer education on benefits like HSAs all year long — not just during open enrollment — to help encourage uptake.
- Keep tabs on shifting legislation: Healthcare and employee benefits policy is in a perpetual state of flux. That’s why it’s important to stay on top of changing legislation that could impact how your employee benefits package is administered. For example, lawmakers are currently looking at relaxing the rules for multiple-employer plans (MEPs), a change that would make them more accessible and affordable, particularly for smaller employers. The outcome will likely change the retirement employee benefits landscape as we know it.
- Promote financial wellness programs and tools: Helping employees get a handle on their finances creates a happier, more productive, more loyal workforce. As the Dallas Business Journal notes, citing another Bank of America Merrill Lynch study, employees’ number one issue is saving for retirement. According to that report, only one-third of employees are engaged with employee benefits like 401k plans and contributing 11% or more of their pay to those plans. However, 85% of employers are planning to use a financial wellness program to encourage better financial behaviors, according to an Aon study quoted in the same article. As such, companies are expanding their employee benefits roster to include enhanced educational efforts designed to help workers maximize their health and retirement benefits, including online financial and investment advice, group/classroom education, and one-on-one support. Thus, employers should consider offering additional support programs and services like these, or fully optimizing existing ones to heighten employee engagement and encourage positive behaviors, such as increased retirement savings.
As the Dallas Business Journal aptly notes, employers spend a lot of money on employee benefits, but without the proper education to support them, their mileage may vary. As such, not only is it important for employers to consider these employee benefits trends and think beyond “one-size-fits-all” offerings, they must also ensure employees have the knowledge and tools they need to make the most of their employee benefits. In so doing, employers can offer more enticing employee benefit packages to potential new hires, while also creating a more empowered, loyal workforce.