Many companies are still lagging in implementing a holistic employee benefits strategy.
A study found that only 40% of employees felt that their employers cared about them, with most members frequently stressed about non-work-related issues, like job security, affordability of basic expenses, and healthcare costs.
That’s why companies must refine their employee benefits to cater to their teams’ unique needs. This helps boost employee morale and job satisfaction, which in turn increases their productivity and the company's overall performance.
In this article, we’ll cover the key elements of an employee benefits strategy and provide a step-by-step guide for implementing a successful program.
Why Employee Benefits Planning Matters
Companies should have a clear roadmap of how they will implement employee benefits to optimize resource allocation and help them achieve the desired outcomes.
The key advantages of planning your employee benefits strategy include:
- Regulatory Compliance: Organizations must ensure their employee benefits comply with relevant legal and regulatory standards, including labor laws and tax requirements. The planning phase provides a window for reviewing current employee benefits against legal requirements to spot and address compliance gaps. Planning also ensures you document the proposed employee benefits and draft or modify relevant company policies to provide a future reference point.
- Ensuring Sustainability: A common reason employee benefits strategies fail is the lack of adequate resources to support the programs long-term. Employee benefits planning helps companies forecast expenses, so that the strategies are included in the company budget.
- Alignment with Business Goals: Employee benefits planning ensures the proposed package supports the company's long-term business strategy. For example, if your organization aims to attract top talent and increase retention rates, you can plan the benefits to include career development opportunities, which help employees envision their future at your company.
- Effective Employee Engagement: Part of employee benefits planning often involves engaging members to secure their buy-in. For example, when HR teams communicate how employees will benefit from the programs, they are more likely to participate actively.
Core Pillars of a Strong Employee Benefits Strategy
The best employee benefits strategies cater to your team’s holistic well-being, including their physical, mental, emotional, and financial aspects.
As such, you should build your employee benefits strategy on the following five core pillars:
- Health Insurance: A good employee benefits strategy should address members' healthcare needs by covering their dental, vision, and medical expenses. The health insurance packages could also cover your employees' dependents to further cushion them against the rising healthcare costs.
- Work-Life Balance: The employee benefits strategy should support flexible working arrangements to allow members to manage their schedules and allocate time for self-care or to pursue personal projects. Additionally, employees should receive paid time off, allowing them to take breaks from work when sick or to go on vacation.
- Financial Planning: A strong employee benefits strategy should empower members to take charge of their personal finances, especially retirement planning. For example, companies should enroll the employees in 401(k) plans and match their contributions to encourage a savings culture.
- Employee Wellness: Health and wellness programs are significant drivers of employee engagement. Besides boosting morale, wellness programs help employees manage workplace challenges such as stress, anxiety, and burnout. As such, companies should focus on wellness programs that promote employees' holistic well-being, encompassing physical, mental, and emotional aspects.
- Recognition and Rewards: The employee benefits strategy should have policies that create an inclusive culture, giving members a sense of belonging regardless of their age, race, gender, or nationality. Also, companies should offer performance-based bonuses to boost employee morale and job satisfaction.
Steps to Build an Employee Benefits Strategy That Works
Your employee benefits strategy significantly influences your team’s well-being, especially their motivation and job satisfaction. This has a carry-over effect on the company’s performance and its ability to meet its business goals.
Below is a detailed guide on how to create a winning employee benefits plan:
1. Outline Your Goals
The first step should always be to determine what you want to achieve with your employee engagement strategy.
Common reasons for building an employee benefits strategy include:
- Attracting top talent
- Promoting employee wellness
- Boosting employee morale and job satisfaction
- Improving your company’s employee retention rate
These goals help you create a roadmap for implementing your benefits strategy and provide milestones that you can use to measure ROI.
2. Set Your Budget
Next, determine how much you are willing to spend on your employee benefits strategy. The main influencing factors include:
- Types of Employee Benefits: Each additional benefit increases the overall cost.
- Number of Employees: Employee benefits costs increase with company size, though not always proportionally.
- Workforce Demographics: An ageing workforce often requires higher health insurance costs than one comprising millennials and Gen Zs.
- Administrative Tasks: These are the recurring costs associated with implementing the employee benefits strategy.
3. Assess Employee Benefits Needs
Conduct surveys, interviews, and informal discussions to learn about your employees’ wellness challenges and lifestyle goals.
For instance, some members could be stressed about their retirement planning, while others could be struggling with lifestyle conditions.
These insights should help you prioritize employee benefits that offer the most value to your team, so that you can maximize the realized ROI.
4. Design the Benefits
Create an employee benefits package that caters to your team’s holistic needs and includes the core pillars discussed above: health insurance, retirement planning, health and wellness, work-life balance, and recognition.
However, providing all these benefits at once can be financially strenuous, especially for small businesses. As such, we recommend going for easy wins, such as starting a corporate wellness program to boost members’ morale and productivity.
5. Communicate the Benefits Clearly
Inform your team about the proposed employee benefits, especially how they promote well-being. This includes mentioning new changes or add-ons to the benefits package.
Suppose you previously offered subsidized gym memberships as the only health and wellness options, but have since added mental health services and employee assistance programs. Highlight these changes and train employees on how to access the benefits.
6. Implement the Strategy and Monitor Performance
Roll out the employee benefits and track how members utilize them to determine ROI. For example, you could measure how many employees enroll and participate in the newly introduced health and wellness programs to determine engagement rates.
Additionally, conduct regular pulse surveys to assess changes in employee sentiment and identify areas for improvement.
Common Pitfalls to Avoid in the Process
Below are common mistakes companies make when building an employee benefits strategy and ways to avoid them:
- Low Employee Engagement: Failing to communicate the employee benefits strategy to your members often results in missed opportunities to secure their buy-in early on. Instead, be transparent about the proposed employee benefits to build trust and encourage members to provide feedback.
- Ignoring Engagement KPIs: Failing to track essential performance metrics results in resource wastage, as you might continue providing benefits that don’t align with employee needs. Also, employees will likely disengage from the programs, which could impact their retention rates. Measure your team’s job satisfaction, morale, and productivity to determine your strategy’s effectiveness and ROI.
- Budget Constraints: A significant portion of employee benefits strategies fail because companies lack adequate resources to sustain the programs. Set a budget during the early phases and outline a plan of how you’ll finance the strategy in the long term.
- Lack of Personalization: Offering one-size-fits-all employee benefits often locks out members with unique wellness challenges and needs, which reduces engagement rates. To avoid this and boost enrollment and participation rates, let members pick their preferred benefits.
- Lack of Incentives: Your team may be unwilling to utilize the implemented employee benefits, such as free gym memberships, if the programs do not include incentives. Incorporate wellness gifts for employees to boost morale and help members break the psychological barriers to participation.
Measuring the Success of Your Benefits Strategy
We recommend measuring the success of your employee benefits strategy to identify dissatisfaction early and address it before it escalates into increased turnover rates. Additionally, tracking the effectiveness of your employee benefits strategy helps you link specific packages to business performance (ROI).
Below are the employee benefits strategy KPIs to consider:
- Enrollment and Participation Rates: Usage statistics provide insights into whether your team is aware of the employee benefits program and how to utilize it. Additionally, participation rates may indicate how aligned the employee benefits are with members’ wellness needs.
- Healthcare Cost Analysis: Track your year-over-year spending on health benefits and compare them against health outcomes to determine whether your programs have been effective in helping employees improve their overall health and fitness.
- Recruitment Success: Track the number of top talents you’ve attracted since implementing the new employee benefits. A positive change means your employee benefits strategy has made your company more attractive to job candidates, which gives you an edge over your competitors.
- Turnover/Retention Rates: Calculate retention rates to determine the number of employees who have stayed at your company compared to previous years. A positive change means employees feel valued, which has increased their morale and job satisfaction.
Power Smarter Wellness Benefits with SoHookd
Employee benefits are no longer about generic perks that you can check off a list. You should aim for benefits that match employee expectations and support their wellness goals.
At SoHookd, we help companies transition from traditional employment perks to wellness programs that give members the power to choose benefits that align with their lifestyle, values, and personal goals.
This personalization encourages employees to own the wellness benefits, which boosts enrollment and participation rates.
We offer the only wellness-focused incentive marketplace and help companies launch employee wellness incentive programs that allow members to redeem gifts that support their wellness goals.
Download our free ebook to learn how psychology-backed incentives can boost your team’s participation by up to 73%.
Frequently Asked Questions (FAQs)
Let’s wind up this guide by answering commonly asked questions about creating an employee benefits strategy:
How Is a Benefits Strategy Different From Just Offering Perks?
The primary distinction between an employee benefits strategy and merely offering perks is that the former is structured, long-term, and aligned with a company’s business objectives.
In contrast, perks are often one-time/short-term add-ons that companies offer their members to celebrate milestones, such as birthdays, and enhance the workplace experience.
What’s the ROI of a Well-Planned Benefits Strategy?
The ROI of a well-planned benefits strategy includes:
- Reduced absenteeism from burnout, sickness, and work-related accidents.
- Improved employee productivity and morale.
- Decreased turnover rates.
These outcomes ensure organizations operate at near full capacity, which translates to improved company performance in the long term.
How Often Should You Review Your Employee Benefits Strategy?
There’s no timeline for how frequently you should review your employee benefits strategy.
However, we recommend conducting regular pulse surveys to monitor employee engagement. You could then track other engagement metrics annually, such as turnover/retention rates and employee net promoter scores.
Conclusion
The right employee benefits strategy will boost your team’s morale and productivity, improving the company’s overall performance. To achieve this, companies must ensure their employee benefits strategy accounts for their members' holistic wellness.
But how would you do that? Partner with a corporate wellness company.
At SoHookd, we have nearly a decade of experience partnering with companies to deliver wellness benefits to their employees. Our wellness program packages are procurement-friendly with no contracts or per-employee-per-month (PEPM) fees.
Our team will help you customize a pre-built wellness program for your team and launch it within 2 weeks. Alternatively, we can help you build a personalized wellness program tailored to your members’ unique needs.
Scheduled a personalized demo to learn how our wellness product packages would integrate seamlessly into your employee benefits strategy.
