The essence of a strategy is the goal it is designed to accomplish. When asking what employee benefits strategies are, first and foremost, we must clearly define the goals for having an employee benefits strategy. Before reading any further, please consider your company’s unique priorities and goals this year, in 2024, and beyond — they should already be outlined and clear.
With your company’s priorities and goals in mind, here are some priorities and goals that an effective employee benefits strategy can help support:
And with that in mind, let’s explore specifically the question of…
Employee benefits strategies aim to achieve organizational goals, such as enhancing employee engagement and satisfaction, by offering valuable benefits, such as comprehensive healthcare offerings with an app to help them navigate their health benefits.
The importance of mental health to employees is growing. According to the 2023 Mental Health Benefits Pulse Survey by Millman, 59% of employers had an increase in claims expenses related to mental health in 2023. This followed a similarly significant increase in 2022.
Not surprisingly, according to the 2024 NAMI Workplace Mental Health Poll, 92% of employees responded that mental health coverage is important to creating a positive workplace culture.
Now that you don’t have to go to the doctor to go to the doctor, employees everywhere want to take advantage. Healthee’s telehealth offering is an extension of its AI-powered health benefits platform, providing 24/7 access to healthcare professionals.
Through this service, employees can connect with licensed professionals for immediate guidance on health concerns, from mental health support to general medical advice. The telehealth feature integrates directly into the Healthee app, making it simple for users to schedule appointments, receive healthcare support, and access personalized recommendations based on their unique health and coverage needs.
Employees are keen, now more than ever, to learn to manage finances.
According to the Mercer 2023 Inside Employees’ Minds report:
As the well-known proverb says, “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.” Taken to the next level, if you teach your employees to manage their money wisely, they can get a lot more fish out of each paycheck — or something like that.
Offering pet insurance to employees who absolutely adore their furry (or slithery) friends is not standard. However, if you want to delight employees, particularly millennial-aged employees, and you can afford it, this can be a huge way to attract top talent.
Everyone knows that the US healthcare system is painfully difficult to navigate. Healthcare navigation solutions have the potential to make employees’ lives much better and encourage employee engagement.
Here, for example, are a few things that Healthee’s navigation platform is doing for employees nationwide:
Most employee benefits fall under these five main categories:
Health and wellness benefits can be in the form of:
Retirement and financial security benefits help employees prepare for their future and protect their financial stability.
This category typically includes:
According to Zippia, 72% of employees say a good work-life balance is very important to them.
Work-life balance benefits are designed to help employees manage their personal and professional lives more effectively and include:
Rewarding employees for their hard work and achievements can motivate them to maintain high performance levels and increase your company’s talent retention. And this is the main goal of performance and recognition benefits.
This benefits category can be in the form of:
Professional development is one of the most important factors in retaining your best talent.
According to the OCTanner 2024 Global Culture Report, “Employees who are satisfied with their organization’s skill building efforts are more than 5x as likely to be promoters of the organization and nearly 5x more likely to do great work.” Additionally, “According to the LinkedIn 2023 Learning Report, the number-one way companies try to improve retention is by providing learning opportunities, followed closely by upskilling and creating a culture of learning.”
These benefits are vital not only because they enhance employee skills but also boost job satisfaction by showing employees that their company invests in their future success.
This type of employee benefits commonly includes:
Employee benefits strategies usually center around the following goals: cost containment, talent attraction, employee satisfaction, employee wellness, legal compliance, DEI, scalability, and leveraging technology for efficient management.
Of course, most companies will have to prioritize the goals they’re looking to achieve when choosing the best employee benefits strategy.
Here are some categories of strategies to choose from:
To meet all personal needs of employees
This comprehensive approach includes compensation, benefits, well-being initiatives, recognition, and career development opportunities, aiming to address all aspects of an employee’s professional and personal needs based on Maslow’s hierarchy of needs (see below for more on the Total Rewards Strategy).
For employer branding
Tailored to enhance employer branding, the Employee Value Proposition strategy defines and communicates the unique set of benefits and opportunities provided to employees, encouraging engagement with organizational values and goals.
For employees’ wellbeing
Slightly different from the Total Rewards Strategy above, the Wellbeing-Centric Approach focuses specifically on employee health and wellbeing. This strategy incorporates physical, mental, and financial wellness programs, aiming to boost productivity and satisfaction by providing extra support to employees physically and emotionally.
For employees’ personal finances
The Flexible Benefits Strategy gives employees the flexibility to customize their benefits packages to suit their specific needs and life stages, offering choices in health coverage, retirement planning, and work-life balance options, among others.
To encourage high performance
By connecting benefits directly to employee performance through bonuses, stock options, and other incentives, its main objective is to drive engagement and align individual achievements with company objectives.
For career growth and personal development (great for employee retention)
The Career Development Strategy gives employees the opportunity for continuous learning and growth, preparing them for future roles and enhancing retention by investing in their long-term career paths. See the section above about “Professional development benefits” for more about how career development and skill development are extremely important for employee retention.
These strategies not only support a dynamic and evolving workforce but also help sculpt a workplace culture that values both individual and collective contributions.
Start by evaluating the company’s goals.
Do you want to increase employee retention?
Minimize employees’ healthcare costs?
Or attract high-quality talents?
You have to be very clear with your objectives because this will tell you which benefits you should offer and how you are going to offer them to your employees. Then, review the company’s financial capabilities.
Examining the current financial health and projections will help you understand how much can be reasonably allocated to employee benefits without compromising business operations.
However, some benefits, such as technology-based benefits, are “double-edged” to save money and provide a better employee experience.
Consider your employees’ overall demographics, including
to understand their varying needs and priorities.
If you don’t have anonymous employee health data to consider already. In that case, you may consider sending out surveys or questionnaires or conducting voluntary health risk assessments to get insights into common health issues or needs among your employees.
And don’t forget to look at how your current benefits are actually being used. Are there some that have higher or lower utilization rates than was expected? If so, is there a problem causing that that can be fixed, or is this just an indication that it’s more worth investing in different benefits?
Finally, look for patterns. Identifying patterns in benefits usage can help you predict future needs and guide adjustments. For example, if more employees start using mental health services, it may indicate rising stress levels within your company. This could be addressed through adding support programs, etc.
If you use a health benefits navigation platform such as Healthee, which records and displays the data analysis for you, that can streamline this entire step.
Now that you have insights on the most used benefits and your employees’ demographics research what competitors are offering in terms of these benefits.
Get a sense of
Then, align this data with the preferences and needs identified in your workforce analysis.
Based on your research, tailor your benefits offerings to your employees’ life stages, needs, and preferences. For example, if you’re looking to attract freshly graduated employees, you may want to consider offering student loan repayment assistance.
It’s ideal to align the needs and preferences of your workforce with the benefits you offer while ensuring flexibility in your options. After looking at the data you have, you will see that — although there’s no way to give all of your employees the perfect benefits package for each one individually — it is possible to offer a range of customizable options that allow each employee to tailor their benefits to best fit their individual circumstances and life stages.
Of course, partnering with reputable providers and benefits brokers while asking them the right questions can help ensure quality service and competitive pricing.
Here’s the thing so many companies get wrong. It doesn’t matter how well you’ve aligned the needs of your workforce with your benefits offerings…
If your employees don’t understand your benefits packages, they may not engage with them. And it’s guaranteed they won’t get the most out of them.
Finding creative ways to communicate benefits to employees is a great way to get them to engage.
Not to mention the gold standard of benefits communication that is finally available: AI. For example, the all-in-one health navigation platform Healthee, makes it possible for employees to independently navigate their health benefits with the ease of making a purchase on Amazon.
Regularly review how many employees are signing up and using each benefit. Low participation might indicate that a benefit is not valued or well-understood.
Occasionally, you also want to consider asking your employees for feedback about the benefits they have. But employee satisfaction isn’t the only thing you have to consider…
On top of that, analyze the financial cost of each benefit versus the budget you set. This will tell you if the benefits are sustainable under the company’s financial conditions.
Pro tip: Be prepared to pivot. As the workforce demographics and lifestyles change, so too should the benefits program.
Offering employee benefits is the key to attracting and retaining top talent. According to a study, 77% of employees stay longer with a company that provides a comprehensive benefits package. Moreover, offering employee benefits can turn your satisfied employees into your company’s brand ambassadors. Sixty-one percent (61%) of employees say a strong benefits package would make them more likely to recommend their company to their peers.
The total rewards strategy is an excellent example of an employee benefits strategy. This strategy is derived from Maslow’s hierarchy of needs and aims to satisfy each level.
The total rewards strategy is a benefits package consisting of the following:
According to a recent study, 80% of employees would choose additional benefits over a pay raise. The majority of US workers prefer better benefits over salary increases because employee benefits address specific needs that a simple salary increment might not cover.
Health benefits reduce the burden of medical expenses, retirement plans build long-term financial stability, and paid time offs (PTOs), or flexible working conditions can contribute to job satisfaction. Benefits enrich employee experience and well-being in ways that additional wages alone might not achieve.
Adding employee benefits on top of regular wages will enhance your employees’ total employment compensation. Base salary might cover daily living expenses, and employee benefits provide additional economic and health security.
Together, these two will make an attractive and competitive compensation package for current and potential employees, which is important for creating a satisfied and stable workforce.
On average, for every dollar that is paid to an employee as salary, an additional $0.3 to $0.4 is spent on top of their wages. But keep in mind that 30-40% is just the average across all industries. This percentage can vary depending on the employees’ work industry, location, and covered benefits.
Employers often consider a reference-based pricing model to reduce their employee healthcare costs. This pricing model sets a predefined limit on how much a company will pay for certain medical services or treatments. Reference-based pricing also involves negotiating healthcare costs with providers. Which then results in lower healthcare expenses.
The Affordable Care Act (ACA) requires employers to offer health insurance to employees working at least 30 hours per week for 90 days. Many employers use this threshold to determine eligibility for other benefits as well.
Employees working fewer hours typically have no or fewer benefits. And if they do, it is at the discretion of their employer.
Conducting surveys is a popular approach to assessing employee benefits preferences. Surveys allow employees to express their health benefits needs and preferences directly.
Another effective method to evaluate employee benefits preferences is analyzing existing data your company may have. If you’re using the Healthee app, the dashboard allows you to see real-time metrics on benefits usage to help you see a pattern of the actual benefits the employees are using.
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