We recently sat down with Leora Kirk, Senior HR Consultant at KMA, to ask about the current trends in employee benefits and perks, and for her advice on how to be competitive in recruiting and retaining talent.
How do you determine what benefits and perks employees value most?
Traditionally, companies evaluated if a benefit was valued by conducting a utilization review. This is a simple assessment of how many employees you have vs. how many of them are actually participating in each benefit. Of course, this is a very simple evaluation and may not always reflect the nuances of reality. As benefits have become more tailored to employees, there may only be a few individuals who participate in a benefit, but that benefit is incredibly valuable to them.
The last couple of years we have seen a substantial increase in employee surveys. As the labor market continues to be competitive, it’s important that we work to retain employees, and a big part of that is asking employees what they value. KMA has supported clients with many employee surveys over the last few years, some that were specifically focused on benefits. I think it’s a great practice annually, prior to starting open enrollment, to survey employees and ask about each benefit offered whether or not it’s of value, the level of satisfaction with each benefit, and also what other benefits employees would like to see offered to help identify any gaps in needs.
What are some of the more unique benefits being offered lately by businesses trying to stand out in the market?
Flexibility around work location and work times still remains a big focus for employees. Recent surveys have shown that employees who have been able to work remotely generally do not wish to return to working from the office full time. This is even more true for working parents and caregivers, who are now able to be more engaged with their other responsibilities.
But beyond flexibility, there is a genuine focus on the employee as a whole — this may mean selecting a medical carrier that has broader coverage for mental health and alternative services, wellness reimbursement programs, tuition and education reimbursement, and support for employees in terms of flexible and generous leave and time-off policies.
If companies wish to focus on attracting and retaining populations who have been marginalized — a strategy that’s gaining ground in the current labor market — they should explore student loan reimbursement programs, lactation support services for mothers trying to return to work, daycare assistance such as Dependent Care contributions, or elder care support services.
What are some lower cost benefits employers can offer to stay competitive?
Not all employers have infinite budgets for benefits. The reality is that all companies work with a set budget for benefits and can only stretch their funds so far. So it’s important to allocate those funds where they are most valued and needed.
Offering medical coverage is often crucial but can be expensive for small companies. Companies may look instead at ways to allow employees to save their earnings by facilitating saving accounts such as Medical and Dependent Care Flexible Savings accounts. Employers may also consider direct reimbursement options to assist employees with medical costs elsewhere. Of course, companies should evaluate the benefits and limitations of each offering, taking into account employee needs.
Life, short and long-term disability benefits are often affordable, and offer a safety net for employees in case of medical emergencies that require time out of work, or for birthing parents. Life insurance policies often come with Employee Assistance Programs, which would offer some mental health support in the form of free counseling services and connecting employees to legal and financial services.
Wellness reimbursement plans, where the employee submits for direct reimbursement, do not have any overhead costs and can provide employees with some extra cash for gym memberships, yoga classes, or anything else that might help support their wellbeing.
It’s imperative that companies focus right now on their leave policies, particularly parental leave policies, to attract employees and remain competitive.
What’s the best way to promote the benefits package a company is offering in order to recruit and retain employees?
Candidates have options, and they can choose the employer that best aligns with their own values. It’s no longer enough for employers to just offer the basic package of benefits. Companies need to stand for something and need to shout it from the rooftops. If you are offering competitive benefits, and a culture that values the individual and their wellbeing, you should really be promoting it at your first point of contact with a candidate.
In terms of retaining employees, it’s important to continue the benefits conversation going beyond open enrollment. You can spotlight a benefit or a feature of a benefit each month. Invite employees for education sessions to learn more about their total compensation package. Annual employee surveys are a great way to gauge if your employees understand all the current benefits offered, and what value they place on them, and identify any gaps or needs.
There are many companies that create total compensation reports for their employees, showing the dollar value of each benefit. My recommendation would be to make it less about how much the company is paying for the benefits, and more about the value each benefit adds to the employee and their family in terms of overall wellbeing.
Thanks for your insights, Leora!