Manage Benefits as a Business Strategy

CUNA’s E-Scan online portal
November 8, 2010 | COMMENTS

Traditionally, employee benefits have been viewed as one-size-fits-all and a fixed expense for employers. But as the workplace evolves, the type of benefits employees seek has changed as well.

The current landscape calls for further shifts in the way employers view benefits offerings, according to MetLife’s Eighth Annual Employee Benefit Trends study, as reported in Benefits Quarterly.

This shift in perspective creates a framework that helps companies strengthen employee engagement and satisfaction, in turn driving employee attraction, retention and productivity.

To shift a company's focus from benefits as an expense to benefits as strategic business drivers, employers must move away from the traditional notion of benefits such as medical coverage, retirement accounts, and time-off policies. Thinking needs to shift toward the key strategies of health and wellness, financial security, and life balance.

Conversations about benefits programs typically start one of two ways: Management provides a predetermined budget for benefits, or HR provides a list of specific plan offerings for consideration. Either way, it’s often a reactive process. As a result, many employers miss opportunities to align benefits with their overall business strategy.

Benefits should be viewed as an investment delivering critical returns in two categories:

1. Soft returns include reputation, a sense of meeting obligations, and goodwill.
2. Hard returns, which tend to have a more measurable impact on a credit union’s bottom line, include employee attraction, retention, and productivity.

To create a benefits package that delivers these returns requires a paradigm shift in four key areas.

1. Cultivate a culture of health and well-being. Medical insurance isn’t the only health-oriented offering employees value. The MetLife study found that 71 % of employees who participate in at-work wellness programs say they greatly value these initiatives. On the employer side, 48% of employers that offer wellness programs say they’re effective at improving productivity. Participation is on the rise—57% of employees with access to a wellness program now say they participate, compared to 46% in 2008.
2. Foster financial security. Many people trust the financial guidance and services their employers provide, even in times when their confidence in the overall economy falters. About 42% of employees are interested in having their employers provide access to retirement planning seminars, but only 35% of employers currently offer them, according to the MetLife study. More than three-quarters (77%) of employees say financial advice and guidance would improve their productivity, and 38% of employers believe retirement programs—offering 401(k)s, retirement seminars, and access to retirement planning professionals—are very effective in improving employee productivity.
3. Promote work/life balance. There’s an enduring perception that employers view their employees' personal lives solely as a distraction from work. But a company culture that promotes reasonable work/life balance and acknowledges the daily challenges and concerns of each individual will increase employee loyalty. MetLife's study found that 82% of employees believe work/life programs would improve productivity. Listening to employees' needs and priorities is the first step in displaying a commitment to work/life balance. Employers that know what kinds of demands their employees face on both the professional and home fronts are in a better position to serve those needs.
4. Craft an unparalleled experience. Companies have an opportunity to provide efficient, effective benefit programs that match employee needs and requests. Creating an experience that employees truly appreciate is similar to crafting the optimal customer service experience. Employers that aim to provide such an experience stand to derive the most value from their benefit programs.

Overall, the most critical step in establishing a high-quality benefits experience is effective communication. Information about benefits must be clear and concise. Also consider the channel through which you communicate. Whether it’s via e-mail, traditional mail, or text messages, employers need to understand employee preferences and deliver messages accordingly.