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October 16, 2023

How to Use Employee Benefits to Gain a Competitive Advantage

To be one of the best-performing companies, you need productive workers. Employee benefits play a critical role both in attracting top talent and in giving workers the support they need to achieve their full potential. With the following four steps, you can use employee benefits to gain a competitive edge.

1. Identify Your Goals

Before you do anything else, determine precisely what you’re trying to accomplish with your employee benefits. To effectively align your benefits with your goals, you need to be as specific as possible.

One of your goals is likely to attract and retain top talent. Dig deeper into this goal by identifying specific benefits that will appeal to workers. For example, if you’re having trouble retaining working parents, you may need to offer benefits designed to help families, such as a robust health plan and caregiver perks.

Another goal is likely to help workers focus on their jobs and achieve their full potential. Consider what may be the major barriers to productivity. For example, if workers are distracted by financial worries, financial wellness benefits could help them become more productive.

As you carry out this step, utilize the following tactics:

  • Obtain feedback from workers. Talk to workers to discover what they need. Conduct surveys and meetings to find out what problems they are facing and what kinds of benefits would convince them to stay at your company.
  • Benchmark your benefits. Since you’re competing against other employers, it makes sense to compare your benefits packages. Use data about other employers to see how your benefits stack up.
  • Look for gaps in current benefit offerings. If you can identify underserved needs, you can make your company stand out. For example, many employers have realized that workers need help covering fertility treatments. According to a 2022 survey from the International Foundation of Employee Benefit Plans (IFEBP), 40% of U.S. organizations now offer fertility benefits, up from 30% in 2020.

2. Craft a Benefit Package That Achieves Your Goals

Once you’ve figured out what your company and workers need from your benefits, it’s time to craft a winning package.

At this stage, your company’s budget may be the main barrier. According to Benefits Pro, smaller employers, in particular, struggle to afford meaningful benefits packages. This is, in part, because they have less bargaining power when dealing with insurers and may lack a dedicated HR professional. However, amid rising costs, even larger employees may face challenges to stay within their budget. According to IFEBP, employers expect health plan costs to increase by 7% in 2024. In this challenging environment, employers of all sizes can benefit from working with an experienced employee benefits broker.

It may not be possible to pay for every benefit under the sun, but you can still devise strategies to meet diverse needs. For example, if some workers need low-cost health coverage and others need robust coverage but you can’t afford to offer a robust plan with low cost-sharing, offering two or more plan options may give everyone what they need. Voluntary benefits can also help you offer diverse benefits without taking on all the costs – employees can pay for premiums using payroll deductions.

3. Educate Your Employees on Their Benefits

Even once you’ve put together a competitive benefits package, your work isn’t done. Now, you need to help your workers understand their benefits and make wise enrollment decisions.

Many employees struggle to understand their benefits. The problem may be that they have difficulty understanding dense benefit documents, particularly the terms used – such as “copay” and “deductible.” A lack of understanding could cause them to make poor enrollment decisions, which could leave them dissatisfied with their benefits.

According to IFEBP, only 34% of employees have a high level of understanding of their benefits. The other two-thirds have only a medium or low level of understanding, which may be insufficient to make good enrollment decisions.                                                           

You can help your workers by:

  • Providing easy-to-digest benefits education in the form of interactive tools, visual aids, and bite-sized explanations.
  • Providing multiple opportunities for people to ask questions about their benefits.
  • Making sure you reach all your workers – including new hires and remote workers – in your benefits education.

4. Engage Employees Throughout the Year

Many benefits are notoriously underused. When employees don’t use their benefits, companies may end up wasting money without seeing any improvement in employee satisfaction, wellbeing, or productivity.

  • Provide reminders about time-sensitive benefits, such as FSA funds that are about to expire.
  • Encourage workers to use benefits. This is especially important when there may be a stigma to using benefits, as is the case with mental health benefits.
  • Help workers save money. Employees may not use their benefits because they’re worried about the expense. Point out benefits that are available with no out-of-pocket costs, such as vaccines and other preventative care. Also give employees tips and tools to compare costs. The FTC found that prices for similar medical services can vary significantly, even across hospitals in the same area, meaning it pays to shop around.
  • Remind employees of the value of their benefits. Provide a total compensation statement so your team knows what their benefits are worth.

Do you need to update your employee benefits? Heffernan can help you put together an employee benefits package that gives you a competitive advantage. Learn more.

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