2018-10-01 07:00:59 Healthcare and Benefits English In today's market, where job seekers have the upper hand, it is important to offer competitive benefits to attract and keep the best... https://quickbooks.intuit.com/r/us_qrc/uploads/2018/09/How-to-offer-competitive-benefits-without-breaking-the-bank_featured.jpg https://quickbooks.intuit.com/r/payroll/how-to-offer-cost-effective-competitive-benefits/ How to Offer Cost-Effective, Competitive Benefits

How to Offer Cost-Effective, Competitive Benefits

6 min read

The well-being of your staff is in your hands.

Your team needs to be rested, productive, motivated and have access to medical care — good people are hard to find, and if you expect the best from people, you need to give them competitive benefits.

Research shows that it’s a job seeker’s market and that candidate experiences are more important than ever before. In the United States especially, there are more open roles than there are people with the skills to fill them.

Hard working, talented people are in positions to turn away opportunities. Harvard Business Review points out that benefits are determining factors in making or breaking a small business’s ability to recruit.

But health insurance alone can be unaffordable to businesses that are competing against the mega-corporations with far deeper pockets.

On average, according to HBR, the average cost of health insurance for individual coverage is $6,435 per year, per employee. Family coverage nearly triples to $18,142.

Rather than cutting corners, employers need to gain value from their investments. Here are some tips for offering competitive benefits — and using those benefits as a strategic hiring advantage — without breaking the bank.

Choose Benefits that People Want and Need

One of the ways to offer a cost-effective yet high-quality benefits package is to survey your employees. Don’t assume that you know what they want: instead, get clear about their priorities.

You might consider implementing a mix of internal surveys, regular meetings, and quarterly reviews, to make sure that you’re investing in the right programs. Get regular feedback related to the following:

  • Health insurance quality
  • Supplemental insurance (i.e. life insurance, accident insurance)
  • Day to day happiness levels
  • Employee recognition
  • Time off

This feedback will help ensure that you are always offering your best as an employer — in your best position to attract the best talent, as a result. You may find that the results of this feedback exercise are surprising — that it’s possible to offer more competitive benefits at minimal to no additional cost. Employees may point to minimal-cost perks, that you may not have considered, like the following:

  • Telemedicine
  • ID theft
  • Pet-friendly office
  • Kid-friendly offices
  • Standing desks

“One idea we implemented was providing transparent and open recognition, which is given by fellow team members and then projected onto a 10-foot high screen on the front wall of our office,” explains Darren Schreher, hiring manager for a $20M e-commerce company that specializes in festival wear.

“Additionally, we give personalized birthday celebrations, free music festival tickets as rewards, and a team member of the month award worth $500. Lastly, we do a monthly town hall meeting recognizing the major wins of each department followed by free lunch and games. We are certain that these kinds of initiatives lead to decreased turnover and happier employees.”

That certainty comes from a consistent feedback process. As an employer, it’s important to be in tune with what employees want and need. This perspective will help you use your benefits program as a strategic recruiting and retention advantage.

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Partner with Professional Employer Organization (PEO)

You want to cut costs, without cutting corners. That’s where a partnership with a PEO can help.

When building benefits programs, small businesses often run into the challenge of managing multiple vendor relationships — each with their own surcharges. As these programs add up, costs can pile on, as well. PEOs eliminate these challenges by pooling together employees from many different businesses. You can think of this approach as similar to a small business leasing out its workforce to a bigger entity.

With this pooling model, PEOs can buy benefits such as health insurance, dental, vision, group life insurance, 401(K) and other perks. PEOs also offer packages for managing payroll and managing workers compensation insurance.

There are multiple types of PEOs for small business owners to include. Examples include ADP, Justworks, and Trinet. The one that you choose will depend on your business entity structure, along with your overall needs. Other costs to consider include rates that your partner negotiates with insurance carriers, in addition to platform fees, which can range from $40 to $500 per month, per employee.

When evaluating PEOs, the following information will help guide your decision:

  • Whether they offer the benefits that your employees want and need
  • Whether the costs of working with a partner make sense for your particular business, in the states where your employees reside
  • Whether it’s more or less expensive to work with insurance providers or brokers directly

The right PEO can help your small business bring on benefits that are typically limited to bigger companies. By pooling your resources with other companies, your business may be able to obtain these benefits at a discounted cost. Every PEO is different, so make sure that you do your diligence and evaluate different options, in-depth.

Offer Flexible Schedules

Some companies offer lifestyle perks including stipends for vacations, wellness programs, and gym members. But not all small businesses are lucrative enough to support these initiatives. One way to offer this same value, at a much lower cost, is to give your employees the option to work from anywhere — and take as much personal time as they may need.

“Flexible work schedules and allowing remote workers is a very cost-effective way to support a healthy work-life balance and keep employees happy,” explains Meisha Bochicchio, content marketing manager at PlanSource, a benefits administration software company.

From a corporate policy and legal complexity perspective, flexible and remote work programs are straightforward to implement. As a result, they can have more impact to ROI than programs that require resources to implement and overhead to maintain.

“Employee benefits are important, but can be costly to organizations and difficult to manage,” says Bochicchio. “The legal requirements are more complex than ever and fees related to non-compliance can be devastating. That, and sometimes companies offer (and pay for) perks that employees either don’t know about or don’t care about – which is a blatant waste of money.”

To work for your business, flexible and remote work schedules need:

  • A clear policy for requesting or managing time off
  • Parameters for who needs to be in the office and when
  • Guidelines for employees to meet deadlines and work closely with managers

Measure the ROI of Your Benefits Package

To be effective as a recruiting and retention tool, your benefits package needs to meet the goals of your employees. That’s why calculating the true ROI of a benefits package can be tricky, according to Bochicchio, as individual employees have unique needs.

“Rather than looking for a one-size-fits-all equation, consider several KPIs in tandem,” explains Meisha. “Data points to reference include benefit utilization rates, employee retention, and turnover rates, and the overall costs of the benefits that you are offering.”

This perspective will help you identify potential areas of improvement, opportunities for cutting costs, and the overall effectiveness of your program. After all, the goal of your benefits program is to support your employees — and that’s good for business.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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