Hello Business Hub & Startups

15 Oct 2020

Employee Benefits: How to chart the right plan

Experts say there are basically two types of employees: the rising star – the first to arrive at work, also the last to leave – and the deadwood. The former, you keep and polish; the latter, you prune out.

But how do you “keep and polish” rising stars? Better yet, how do you nurture as many employees to become rising stars?

It’s in the benefits, says Ray Silverstein, founder of President's Resource Organization (PRO), a small-business advisory network.  “There are certain benefits good employees feel they must have,” he once told Entrepreneur Middle East.

Indeed, the key is in keeping employees, especially the promising ones, gratified by rewarding them with that quintessential “fruits of thy labour.”

The effects of making productive employees happy far outweigh the investment, human resource experts say, noting that these employees become more satisfied at work if given the benefits that mean a lot to them.

Thus, they transform into enthusiastic team members who become regular fixtures at work, rarely being absent, at times even dropping by on a weekend to wrap up some pending matters on their “to-do” list.

They are likewise less likely to check out the latest releases on online employment vacancy portals. 

Most importantly, they level up on their commitment to meet company goals, inspired by the not-so-remote possibility of receiving more benefits as the organization becomes even more successful.

So how do you come up with the right plan? 


Objectives and budget

The Society for Human Resource Management (SHRM), which has over 300,000 members – HR managers and other business executives – in 165 countries, says it starts with identifying the company’s objectives alongside its budget.

Objectives “provide overall guidance in establishing the selection and design of the benefits program,” SHRM explained, stressing that this should reflect on the requirements of both the employer and employees.

SHRM said factors to be considered are company size, location, line industry and agreements with employees.

The international human resource organization likewise pointed out that it is vital to know how much budget is available. 

“If a current benefits plan exists, organizations should analyze current benefits costs and projected costs and create a budget spreadsheet outlining annual benefits costs. The rising cost of offering benefits such as health insurance will greatly affect the benefits an employer may offer,” SHRM said.


Needs assessment

A needs assessment determines the best benefit selection, says SHRM.

And this may consider the employer’s understanding of the employees’ requirements, the competitors’ benefits package as well as tax laws and regulations.

SHRM also suggests doing employee interviews through a simplified questionnaire. 

In coming up with a benefits plan, it is essential, SHRM also suggested, that companies look into the workforce demographics.

“Younger employees may value paid time off more, whereas older employees may place a higher value on retirement income plans,” it noted.


Program

With the objective ironed out and needs assessment finalized, the next step, says SHRM, is to formulate the plan itself. This can be a little tricky because the benefits should come according to the following: priority, cost and budget.

Indeed, says SHRM, this step is “complex and may take many factors into consideration” like the administrative costs or whether benefits that are underused or not valued by employees can be eliminated.


Strategy

Once done, it becomes imperative upon the employer to communicate to the employees how much important it has been to have their inputs included in the formulation of the benefits plan – after all, it involves the fruits of their labor.

SHRM says a communication strategy is “a critical component to the benefits planning and management.”

“If employee input was obtained and used in the benefits design process, employers should be sure to share this with employees and let them know how their feedback influenced the benefits program's design. 

“The positive impact on recruiting, retention and employee morale may be lost without effective communication plans,” SHRM advised. 

Ergo, the global human resource group said, an excellent benefits communication plan should be able to effectively create awareness and appreciation of the new or existing benefits and improving employee financial security.

It should likewise provide a high level of understanding of the benefits offered, and encourage wise use of benefits.


Evaluation

With the benefits plan in place and properly communicated to the employees, it is essential that a periodic review of the program is conducted.

“It is another important step in the benefits management process,” SHRM explained, saying that the benefits program must be assessed on a regular basis to determine if it is meeting the organization's objectives and employees' needs. 

And because benefits plans are always influenced by outside factors like the business climate, new regulatory requirements and the likes, employers should consider measurements to assess the programs and make necessary adjustments if needed.

And so there: the whole nine yards of coming up with the right employee benefits plan. It’s a two-way traffic that benefits and makes both parties happy as productivity goes nowhere but up.