How to choose benefits that keep employees
by Michael McKenna
Mr. McKenna is president/owner of Comprehensive Benefit Administrators (www.cbacompanies.com), a company that combines traditional brokerage services with specialty services such as advocacy and claims administration. He can be reached at mmckenna@cbacompanies.com.Benefits can be a powerful and persuasive tool for employee retention. Increasingly, the role of the benefits provider has changed and businesses less and less look at a one-size-fits-all approach.
Thus, the employer needs to be sensitive to their mixed bag of employees. What millennials are looking for in a benefits experience will most likely be much different than what baby boomers are expecting. By recognizing this, and developing a benefits plan which is sensitive to the generational make-up of their workforce, employers can achieve high marks from all their employees, if they find common ground among the employee base and the financial realities of the employer’s ability to pay.
Increasingly, employers select their benefits on the basis of four key strategies: convenience; choice; technology; and return on investment (ROI). Looking at what goes into each of these factors can give businesses better insight into how their choices might impact employee retention.
Convenience
First and foremost, a benefits package must be a convenient package. This may seem basic, but for many employers keeping a package convenient is a struggle. For example, an employer may think of opting to switch to a health or dental plan that would require smaller networks in order to save money.
If doing so, however, the employer should ensure that the network is large enough so that employee access to good medical and dental providers is within 10 minutes of work or home. Additionally, convenient access to benefits management support is an important consideration. Are human resource associates available to the employees? If not, can the broker or insurer provide education and service support?
Especially with dual income households, access to a compassionate and convenient resource can go a long way toward building loyalty in an employee.
Choice
The American consumer can be a demanding bunch. Several years ago, as the new benefits purchasing environment was flourishing, I coined the term “needs-based purchasing,” in reference to the ability of a business to have a robust choice in benefits.
Needs-based purchasing recognizes that what one person needs for benefits can be entirely different from another employee. For example, in health insurance, only 8% of members generate 60% of all medical and pharmacy claims. Given this, it stands to reason that an educated employee who realizes he or she needs coverage only occasionally, is healthy, and incurs minimal costs may want higher deductible medical plans with more risk but lower premiums than the employee who has a spouse and three children.
Technology
Regardless of your employee’s age or sophistication, technology, when used strategically, can help with the perception of the quality of your benefits package. If an employer is serious about “selling” the value of their offerings to the employee it must be communicated well. An employer should investigate if their service provider or broker has a service app which can be accessed by the employee’s smart phone.
The app should offer easy access to their benefits information and service teams. Another effective tool is video-based benefits education. There are very good companies out there that can produce an overview of an employer’s benefits package using a fun, animated, educational experience. After all, 70% of adults are visual learners!
Return on Investment
Lastly, employers should have an ROI-based benefit built into their offering. Free medical second opinions outside of the health plan or access to a zero-dollar co-pay telemedicine program are two examples of this.
The outcomes are immediate benefit, value, and a feeling of applicability among all consumers that you employ. In addition, these services are generally run outside of the company’s health plan and, as a result, save both the company and the consumer money. Furthermore, these benefits can create one of those rare opportunities to engage the employee and their dependents in a “consumerism” dialogue.
Employees might start sharing their positive experiences with friends or colleagues (e.g., “Because I was able to use my company’s telemedicine program, I had access to quality medical care for my child’s earache from the convenience of home in the middle of the night. And because my company program has a zero co-pay option, it cost me less than an office visit co-pay!”), which reflect well on the company as a whole, augmenting its reputation within the community and/or industry.
The market is moving toward needs-based purchasing, and employers are increasingly selective in what they choose for their companies and their employees. Convenience, choice, technology, and ROI are the building blocks of personalizing the value of a company’s benefits package, which has a proven impact on both the attraction and retention of quality people.◊
