New Tool Offers Insight on How Benefits Programs Stack Up Against Peers
Much has changed for U.S. employers in the past four years, to say the least. Although the economic landscape may look vastly different, and the unemployment situation a far cry from the economic heyday in 2007, the need for an organization to compete for top talent to drive innovation, productivity and market leadership remains steadfast.
Equally unwavering is workers’ reliance upon and expectation of benefits options. In fact, employees are arguably demanding a more robust benefits package to offset the relative halt in pay raises, promotions, bonuses and even reduced work schedules.
As your organization strives to meet the challenges of today’s environment, how do your benefits options stack up against those of your competitors? Are you considered an employer of choice? Does your benefits package demonstrate that you care about the welfare and satisfaction of your workforce?
Benchmarking your organization against your peers can provide profit-enhancing insights and make it easier for you to attract top talent. Benchmarking your benefits package can help you identify areas that need enhancement and even provide answers to questions you didn’t even know you should be asking. Or, you may find that your company is dedicating too many resources to certain benefits options that simply aren’t of importance to your employees.
Whether it’s retirement benefits, medical plans, or voluntary insurance, knowing exactly how your benefits measure up to other employers is beneficial.
The new online Benefits Assessment Tool from Aflac uses extensive data and an exhaustive analysis of benefits offerings from employers across a wide range of industries and sizes to show you how your benefits program compares to others. The Aflac Benefits Assessment Tool categorizes companies into one of four key segments. These groups of employers fall along a spectrum that takes into account not only the number and nature of benefits offerings, but equally important, how the organizational leadership views and communicates benefits initiatives.
Talent Attractors, which account for only 11 percent of companies, are simply best in class when it comes to benefits packaging and delivery. These organizations span size and industry, but all share common beliefs about their company’s role in worker health and protection. The HR decision-makers at these organizations are more likely to believe that employee health is very important to workforce productivity. And, they understand fully what their workers’ benefits needs are and how to exceed at communicating and marketing those benefits.
Perhaps most important, the companies that fall within this category are true to their name — they attract talent adeptly and proficiently because of their established reputation as a great employer and they deliver on that promise.
Specific best-in-class strategies used by Talent Attractors include:
- Ongoing surveys of employee base to gauge interest level and satisfaction with benefits options.
- A wide range of benefits offerings, both insurance and non-insurance-related, that are best suited to worker demand.
- Tailored options and communication of benefits to specific levels or life stages of workers.
- Frequent communication throughout the year about their benefits program and enrollment.
- High degree of awareness and belief in connection between benefits and profitability measures.
- Focus on wellness and preventive care to safeguard workers’ health and well-being.
Nearly half (47 percent) of all companies are Benefits Believers. These organizations do a good job of maintaining adequate benefits options for workers, despite the cost constraints and pressures of a down economy. When other businesses were eliminating benefits options or shifting significant copayment or premium costs onto employees, Benefits Believers found ways to manage rising expenses without seriously compromising worker welfare.
Along with major medical benefits, employees who work for Benefit Believer companies have additional options to round out their health insurance options, such as voluntary or supplemental policies that help offset out-of-pocket medical costs. Workers have the option to purchase additional coverage beyond the basics to fit their family needs.
Beyond medical plans, organizations in this category also provide financial savings or protection options, such as 401(k) or other retirement savings plans.
Next steps for Benefits Believers:
- Many of today’s leading companies are tailoring their benefits package to suit the varying needs of an increasingly diverse workforce. With a complex mix of four generations of workers, HR professionals will need to develop customized strategies to meet the requirements of each segment. For example, voluntary life insurance policies can be customized for young, single workers who don’t have many financial obligations or for older workers who are trying to save for retirement. A voluntary universal life policy offers the ability to adjust premium contributions to balance against saving for retirement or other personal goals.
- Although the market can still be characterized as an employer’s market, this will begin to shift back to an employee-driven environment where top talent will be in short supply and high demand. When this happens, a company’s ability to demonstrate value and goodwill to its workers through robust benefits could mean the difference in high or low retention rates.
- Benefits Believer organizations do an acceptable job of benefits communication. However, to ensure a high return on investment in benefits, consider boosting the frequency of communication to a minimum of six times a year. Think out of the box and pursue alternative ways to communicate, such as texting, webinars, tweets, etc.
- Discuss with your benefits advisor or provider the possibility of adding wellness and preventive care initiatives to help improve worker health and ultimately, productivity.
- If you already have wellness programs, take a closer look at them to ensure they are impactful. Wellness programs must be comprehensive, engaging and holistic, encompassing key areas of employee everyday lifestyle. These initiatives need to include a focus on a healthy workplace, education about eating well, and the ability to manage stress. Otherwise, participation will not happen and companies will not see the results and benefits they expect.
Businesses within the Simple Solutions segment represent 15 percent of today’s organizations. These companies provide the most basic of expected benefits, which may be leaving gaps in coverage and expectations from employees. Since little is known about employee preferences about benefits, Simple Solutions organizations use a one-size-fits-all approach and aren’t maximizing their return on investment in hard costs and resources.
Employees at these companies are susceptible to the financial challenges an unexpected medical event could bring. This is due in part to the organization’s focus on the bottom line at the expense of employee satisfaction and protection. Simple Solution companies indicated they have reduced the number of benefits at their organization this year.
With a below-average number of benefits options, employees at these worksites are often more stressed, anxious and distracted on the job.
Strategies for Simple Solutions employers to consider:
- Tap into your benefits advisor or provider to further explore the connection between benefits and worker satisfaction, retention and productivity. Leading benefit delivery companies acutely understand the hard and soft rewards that can come from a robust benefits program.
- To avoid eliminating benefits coverage altogether due to cost constraints, Simple Solutions employers can replace company-funded insurance with voluntary options. This allows the business to retain coverage options at no direct cost to their bottom line and at the same time, protect workers.
- Several options are available to companies interested in incorporating voluntary benefits into their existing package. For example, some businesses will design voluntary plans that feature an employer-paid core plan, while giving workers the options to buy up to broader coverage.
- Although it’s a tried-and-true formula, using awareness and prevention against poor health and high medical costs, not every company has fully embraced the initiative. As is often the case with new concepts, many companies are not convinced of its effectiveness. Yet, nearly all (92 percent) with a wellness program agree that it’s effective, and 47 percent of those say very or extremely effective, according to the 2012 Aflac WorkForces Report. Most impressive is that 70 percent agree they have been able to determine a return on investment ROI on their wellness program. 1
- Adding benefits enhancements without adequate communication efforts to promote them is futile. Be sure to implement more effective marketing and education outreach to workers. It’s not only good business sense, but it’s also financially savvy when you consider that 41 percent of workers agree that they would be less likely to leave their jobs if they were well informed about their benefits. 1
Alarmingly, more than one-quarter (26 percent) of companies are considered Benefits Skeptics. These companies offer a less comprehensive benefits program compared to most companies. Also, employees at these worksites are either unaware or not fully using the benefits offered, leading to lower morale, and difficulty recruiting and keeping top talent.
As the name implies, companies in this category are skeptical about the return on benefits. They believe benefits have little impact on employee recruitment, retention and productivity. However, on the contrary, benefits have been shown to influence an employee’s decision to leave a current employer and influence on-the-job satisfaction. More than three-quarters (79 percent) of workers say their overall benefits package influences their job satisfaction, while 75 percent say it influences their loyalty. Plus, employees who are satisfied with their benefits package are nine times more likely to stay with their employer. 1
A lack of adequate benefits protection has left employees at Benefits Skeptic organizations vulnerable to financial hardships, which can result from high out-of-pocket expenses in the event of an unexpected illness or accident. Large unforeseen expenses, medical or not, can often lead to bankruptcy. Financially-stressed workers are often unproductive, distracted workers.
But you have an excellent opportunity to enhance your benefits program without adding significant costs to your bottom line, helping you stand out from the competition.
To step up, Benefits Skeptics should consider these recommendations:
- Engage a benefits advisor or broker to help evaluate your current benefits package and to provide recommendations on must-have benefits additions needed in the short term, and nice-to-have options to consider in the longer term.
- When building or rebuilding your benefits program, be sure to get off on the right foot. Survey your workers to determine exactly what benefits are in high demand or have high interest. This valuable insight will help guide you during the benefit selection, implementation and delivery process.
- Inform yourself. Nearly all Benefits Skeptic organizations have little knowledge or misinformation when it comes to voluntary benefits options. These impactful policies can be ideally suited to an organization in need of building a base of benefits solutions. Research the ins and outs of voluntary plans so that you have the knowledge to make the best decisions and choices for your organization.
- Discuss with your benefits advisor or provider the possibilities of adding in wellness and preventive care initiatives to help improve worker health and ultimately, productivity.
A clear indicator
Borrowing a phrase from the medical community, often the key to prevention comes down to early detection. The same holds true for today’s organizations seeking ways to combat the potential effects of forces, economic and otherwise, threatening their livelihood. Through a strategic diagnosis of their current beliefs, and utilization and delivery of benefits, companies can identify where they fall on the benefits spectrum.
To benchmark your organization’s benefits program, visit aflac.com/insights to access Aflac’s Benefits Assessment Tool. For more information on the Aflac Workforce Report, groundbreaking research about benefits and how to use them as a strategic advantage, conducted by Research Now on behalf of Aflac, visit aflac.com/insights.
1 2012 Aflac WorkForces Report, a research study conducted by Research Now, January 2012.