Benefits Administration and Design

Employee benefits are compensation not related directly to money. For example, health insurance, or vacation time. They are crucial as they dictate the type and quality of the workforce in the long term. This is because the deciding factor for potential employees is often the “perks” that come with the job. There are benefits that all employers must give their staff:

• Leave for medical necessities and the death of family.
• Paid compensation.
• Time off for civic duties.
• Contributions to social security.
• Insurance against unemployment.
• Insurance against disability.

Aside from these, any others are optional. Benefits do not just have a financial value for employees. They also give an insight into the company. They show its values, and they show its intentions. Specifically, they are an indicator of how important the employees are to the company. This is because a benefits package requires substantial effort and expense. As a result, employees trust them to give an idea of what the company is like.

For example, an organization may have broad share options. It could focus its benefits on training, mentorship, and fast promotion. These benefits will clearly communicate to a potential employee that the company rewards demanding work. Other organizations may prioritize fully comprehensive health insurance, pet insurance, and monthly therapy sessions. These benefits will communicate a distinct set of priorities.

The final intentions behind the company’s benefits plan will vary. However, the intention of every organization is to create compensation that is both internally fair and externally competitive. This is crucial. If the benefits are not internally fair, group cohesion and organizational morale will plummet.

External competitiveness comes with two of its own issues. If the benefits package is lacking compared to the market, the best talent is at risk of leaving for a better offer. However, if the compensation is too high, the company is misallocating its budget.

Conveying the value of benefits to employees

It is crucial to communicate the value of a benefits package effectively. The alternative is to spend time and money to create the right benefits package for the right people without anyone using it. This loss clearly has a negative impact on the employee. However, it also directly affects the company. It does not gain the improved loyalty and organizational morale that well communicated benefits bring.

There is a pitfall around communicating benefits. While promoting them to potential employees, it becomes easy for them to become the focus. Especially if the benefits are extremely impressive and uncommon in the industry.

Specific benefits affect the workforce in their own ways. For example, healthcare packages can help reduce employee anxiety, improving work output. Paid time off can help improve the work-life balance, improving the company’s reputation. An organization that prides itself on a resolute, strong work ethic above all will have benefits to reflect this. These benefits will then attract a certain type of employee. A company that does not communicate its benefits at all attracts yet another type.

Benefits packages, when created correctly, improve company loyalty, employee satisfaction, and retainment. This means they directly affect hiring costs and company growth.

Tips to follow when creating a benefits package

One of the most crucial aspects to creating a benefits package is a clear understanding of the intention behind them. An in-depth understanding of the identity and values of the company is necessary. After that, there must be an understanding of the role and how it fits into the broader plan of the company. Its purpose, the type of person that would be ideal, and how the proposed benefits will attract them.

The second factor is to ensure that you receive feedback from existing employees. This is the most effective source of data, and it is current. Existing employees know what is currently missing. They will tell you what needs improving. They know if the paid time off is enough. Feedback in the form of anonymous surveys and conversations is an especially effective way to gain good data. This way, employees can give their opinions without fear of retribution.

With this information, the goal will be to provide the most impactful benefits for the expenses involved. This way, their effect will be far greater than by adding their value to the employees’ monthly compensation.

Communication is crucial

When communicating benefits, use comparisons to make their value as relatable as possible. For example, a monthly subscription might usually cost $100 a month, or $1200 a year. Communicating this expense is beneficial to the company. Organizations that do not do this effectively sell themselves short. Do this for every benefit, along with the value of all benefits at the end.

The non-monetary rewards can often convert into a monetary value. For example, if the salary is X dollars per month, calculate the daily amount. Then use it to explain the financial value of each day of paid time off.

There will be cases where it is not possible to talk about the financial value of benefits. However, it is still possible to clearly explain their value. Social events with included food expenses. Flexible work schedules, allowing for a better work-life balance. Go into detail on why these are benefits for the employee.

Communication begins during the onboarding process and continues on an ongoing basis. As benefits develop continually refer to the workforce to get their insights. This will keep them effective.

Consider how communication of benefits may vary across an organization. Part of the benefits package will be the same for all. However, there will be situations to tailor communication to certain slices of the workforce. For example, discussing the specifics of shares to directors and c-suite members.

Consider how different demographics and sections of the company will have different desires and needs in their benefits. For example, younger employees will get value out of childcare services. Older demographics may value health insurance.

This understanding of differing priorities will help you to create personal, customizable benefits.

Conclusion

Benefits packages serve a variety of purposes. Each organization has its own specific goals, but there are universal ones. Organizations all want to attract the right people for their workforce. The best benefits packages have a clear relationship to a particular lifestyle. They both build a sense of company identity and complement the personalities of the employees.