Best Practices for Benefits

How to Develop an Effective Employee Benefits Plan?

The most essential step when designing a benefit plan is to identify the respective organization's objectives. Identifying goals provides overarching guidance for forming the structure of the plan moving forward.

It is important to note that this method may or may not result in a list of specific benefits that organizations may choose to provide. However, the fundamental purpose of identification is to provide a perspective of the needs of both the employee and the organization. The organization needs to utilize an HR strategy to develop benefits plans.

Consider factors such as location, size, industry, and more when developing an employee benefits program. That said, it is vital to understand that benefits, objectives and goals are not related to statistics, instead focus on analyzing and reflecting current employer and employee needs and strategies accordingly.

Check out these video guides to learn more about financial statement sand accounting basics for non-profits!

A needs assessment is the process of identifying and determining how to fill in the gaps between an organization's current strengths and areas of improvement for a desired goal in the long-run.

With the intent to determine the best benefits selections and designs based on the employee's needs, this strategy can be utilized to build a complete employee benefits program.

- - - - Make sure to design the plan based on the employee's identified employee needs. For instance, depending on the demographics within the employee bodies, younger employees may value vacation time more whereas older employees may value retirement plans more instead.

- - - - Regulation
        Depending on the Federal Tax laws and other legal requirements organizations may be required to offer only certain types of benefits. Make sure to stay up to date with local laws so that the benefits plans meet the minimum standards.

- - - - Job Market
        Implementing market research is an excellent way to determine the standard industry plans and to gain knowledge for references. Understanding the market will help you arrange your benefits plans effectively.

- - - - Monitoring Benefits
        If your organization has already established a benefits plan, carefully evaluate what has been successful and which ones are not quite. This way you will be able to refine your plan based on employee reviews feedback.
        A common way to include employee inquiries is in the form of personal interviews, and simplified questionnaires. Important to note: While employee input is likely to increase staff engagement and satisfaction with the benefits package, this is only true if the employer is committed to carrying out the feedback in benefit selection and design.

- Using the data gathered in Step 1 & Step 2, make sure to determine the level of benefits that you want to offer accordingly and organize the benefits in terms of their priorities.

- After that, it is important for employers to calculate the cost of implementing those prioritized benefits and evaluate them against the respective organization's current benefits budget.
  - - 1. To learn more about how to budget for employee benefits visit cost-of-benefits!

- When altering an existing benefits plan make sure to identify areas where you can get rid of under-used offerings that can reduce costs and maximize the plan's functionality. Depending on the organization's goals, some plans may need to create room for cost savings, others may be more of a complete package to attract and retain skilled employees.

As a way for employers to reduce/avoid the high cost of the benefits package, organizations can implement the cost-sharing method. Initially, in a cost-sharing plan, employers contribute a certain portion of the payment, and the rest is withdrawn from the employee's paychecks themselves. For instance, cost-sharing can be very effective in terms of health insurance.

- - - 1. To learn more about cost-sharing and its examples, please click the link below: healthcoverageguide.org

- This is one of the most challenging evaluation procedures that organizations must go through since it involves deciding whether to add, modify, or eliminate benefits offerings factors such as employee contribution amounts, cost containment features, administrative resources, and more. Make sure to conduct thorough research on plan offerings that are appropriate for the organization's values.

Effective and consistent communication of the offering from the employer to their employees is a crucial way to introduce and make use of the benefits plan.
- 1. - - Communication strategy is a great way to assist employees in terms of benefits, management, and planning. To learn more about how to develop an effective benefits communicating strategy visit SHRM!

It is essential to have employee input when bulking a benefits plan. Without employee buy-in no matter how good the benefits plan may be, it would be less effective.

When you include the employee's feedback and inputs in the design process, make sure to communicate how the employees have influenced the benefits plan. This will not only increase the effective means of the benefits plan but it gives recognition to the employees as they feel heard and valued in their working environment.

- An effective benefits communication objective should consider the following:
  1. - - Encourage the use of benefits within your organizations.
        Make efforts to help employees understand the construction and usage of the different types of benefits offered in their respective organizations.
        Promote awareness of new and existing benefits plans.

Effective communication between employers and employees, including high levels of engagement in the decision-making process. This leads to an increase in employee morale, employee retention, and the attraction of skilled employees.

It is important to review the benefits programs regularly to determine whether or not the implemented benefits plan is meeting the standards of the respective organizations and the employee's needs.
Strategies such as trend or benchmarking can be a great way to measure benefits, offering successful levels along a set of expectations:
- - - - Benchmarking: need to be in the know of all your competitors, to make sure you are staying competitive within the industry and to attract and retain skilled employees.

- - - - Trend: Benefits will constantly change to cater to employees' prioritized needs, therefore it is essential to do research and get feedback from employees to choose the right benefits program to stand out.