There are few HR topics that garner more media attention than employee benefits.
A simple Google search of “employee benefits” yields more than 429 million results.
Paid family leave, workplace flexibility and health care now dominate the conversation in Washington, D.C., and in our workplaces, and employee benefits continues to be among the most popular topics at SHRM.
The recent 2017 SHRM study on Employee Job Satisfaction and Engagement found that benefits were a significant factor in employees’ decision to stay with or leave an organization.
However, different groups of employees, whether it be because of their life stage or the market demands for their skills, may have different benefits preferences.
The survey also found that the most valued components of a benefits program are all about employee quality of life in a broader sense—health care, leave and flexibility. An organization’s benefits package was both a stay factor and a leave factor, but flexibility emerged as a particularly important consideration in sticking with a company.
These benefits are among those with the largest importance/satisfaction gaps.
- Health care
Another SHRM study on benefits, the SHRM 2017 Employee Benefits survey, looked at the prevalence of benefits over the past five years. Key findings from the survey include:
- Nearly one-third of organizations increased their overall benefits offerings in the last 12 months, and they were most likely to increase health (22 percent) and wellness (24 percent) benefits.
- Over the past four years, spousal and domestic partner benefits have increased but may now be leveling off. These new data show that:
- 95 percent provide health care coverage for opposite-sex spouses.
- 85 percent provide coverage for same-sex spouses.
- Just over one-half provide coverage for domestic partners, regardless of whether they are the same or opposite sex.
- Financial advice benefits are trending upward, going from 28 percent in 2014 to 49 percent in 2017.
Strategic Benefits Programs
In SHRM’s 2017 Strategic Benefits research, the majority of HR professionals surveyed reported that their organization uses benefits strategically for talent acquisition and retention—especially in the areas of health care, retirement, leave, wellness and professional development.
These strategically focused organizations review their benefits offerings more regularly,—and collect feedback on benefits costs, employee feedback and market data at higher rates—than organizations without a strategic benefits focus.
According to the survey, the top five changes strategic users are making are in the areas of health care, wellness, retirement, professional development and leave.
Additionally, the skills gap has intensified the war for talent in specific industries and talent pools. Organizations are using strategic benefits to differentiate themselves when they can’t lead the market on pay alone.
When reviewing your organization’s benefits program, ask yourself the following:
- What degree of customization does your benefits program allow for?
- How readily can you adapt your offerings to meet unexpected talent challenges?
- How much agility and flexibility do you need to keep your star performers?
Flexible benefits, or “cafeteria plans,” can help address the varying needs of your workforce; however, a more-strategic plan will focus on the areas of the organization that have the greatest talent challenges and on the retention of employees who are the most vital to meeting business objectives.
Managing costs is important, but so is return on investment. In reviewing your benefits program, challenge yourself to evaluate the return on the benefit. This can include the impact on areas such as recruiting and retention, but also on the utilization rate.
Be Careful with Change
One tip from behavioral science research is that people are loss averse—the pain of losing something is twice as powerful as the pleasure of gaining something, so when making changes (especially reductions) in benefits, make sure to consider the impact on employees. Get their feedback. Make sure you are communicating changes in a way that mitigates the perception of loss. Even if you are trying to make improvements, the changes may not be what employees want or the changes may not be perceived as improvements.
What trends are shaping the current employee benefits landscape, and how can you optimize your organization’s benefits program?
Please join @shrmnextchat at 3 p.m. ET on July 19 for #Nextchat with special guests SHRM Senior Vice President of Knowledge Development Alex Alonso (@SHRMKnwldgeSVP) and SHRM Vice President of Research Shonna Waters (@Shonna_Waters).
During this #Nextchat, we’ll provide some highlights from SHRM’s 2017 Employee Benefits, Strategic Benefits, and Employee Job Satisfaction and Engagement surveys to provide you with the most up-to-date information on benefits trends.
We’ll also focus on the purpose and outcomes of using benefits as a strategic tool and discuss practical steps that you can take to optimize your benefits program.
Q1. Which employee benefits do you feel are most important in attracting and retaining talent now, and what are employees requesting?
Q2. What improvements have you made to employee benefits in the past year to remain competitive, and what prompted these changes?
Q3. What are your biggest challenges related to employee benefits, and what are you doing to mitigate them?
Q4. How are you incorporating a strategic benefits plan into your recruiting and retention strategy?
Q5. What innovative wellness benefits programs (financial and health) have you created to improve employee satisfaction and retention?
Q6. With professional development (PD) cited as an important benefit for retention, how are you modifying/expanding your PD benefits offerings?
Q7. What market data, organizational metrics and employee feedback do you collect to help make future benefits-offering decisions?
Q8. What flexible and family-friendly benefits does your organization currently offer, or what barriers do you face in wanting to implement or expand them further?