by jeffp | Dec 8, 2015 | Employee Benefits
Do you include employee training and development in your benefits package? You should—research has revealed that workers consider such benefits when deciding whether to accept a new position or stay with their current employer. In fact, one study conducted by The Society for Human Resource Management discovered a direct correlation between employee turnover and development opportunities—or the lack thereof.
Unfortunately, not all employee-training investments represent time and money well spent. According to training experts, many companies make mistakes that severely reduce the benefit of their training programs. Consider the following missteps you should avoid when offering an employee training opportunity.
- Avoid large groups. It’s difficult to have a productive discussion with dozens of people in the room—particularly if you want all employees present to participate. When possible, limit training sessions to a dozen or fewer workers at a time and everyone will feel more comfortable chiming in.
- Avoid pointless games. Creative team-building activities may sound like a fun way to capture your employees’ interest and break the ice, but make sure they have a direct relation to the goal of the training. If they don’t, it will be harder to get all of your workers to participate.
- Avoid complicated training materials. While different workers will have different learning styles—such as visual, auditory and kinesthetic—keeping the material simple will enhance the experience of all. This is another area where multiple small training groups can be beneficial, allowing you to fine-tune your presentation based on the questions in each previous session.
- Avoid the lecture. Unless you want your employees to spend the session doodling in their notebook or checking Facebook on their cell phone, don’t hire trainers who rely on lectures. Instead, look for professionals who are adept at initiating and steering conversations without dominating discussions. The more he prompts your employees to participate, the more they will engage in the opportunity.
- Avoid irrelevant information. Training opportunities that are directly connected to your employees’ jobs and development goals are always better investments than those that focus on information or ideas that are not immediately applicable. The easiest way to determine the training your workers would most like to receive is to survey them on the topic.
- Avoid discomfort. Uncomfortable chairs, an air conditioner on the fritz, and too many noisy distractions will sap the attention of any employee. For best results, hold your employee training sessions in a comfortable, quiet room. If you must meet during normal lunch hours, make sure you provide refreshments as well.
Some studies have shown training programs can increase employee retention by as much as 70 percent. When you consider the expense that goes into finding, hiring and onboarding replacement workers, it’s easy to see that greater retention is better for your company’s bottom line. If you’d like further advice on implementing a program at your organization, consult your benefits advisor.
by jeffp | Nov 20, 2015 | Employee Benefits
Recently, the Society for Human Resource Management (SHRM) conducted several surveys of their members. In one, 20 percent of organizations reported leveraging benefits packages to retain workers. That number is surprisingly low given how effective desirable benefits can be for keeping staff happy, engaged and committed to their employers.
For example, one MetLife survey found that 58 percent of employees say benefits are one reason they remain with their employer. That percentage jumps to 63 percent for Generation Y workers and 62 percent for those in Generation X. In the same survey, 61 percent of employees who are very satisfied with the company benefits package they receive feel a strong sense of loyalty towards their employers. Only 24 percent of those very dissatisfied with their benefits feel the same loyalty.
Most Common Benefits
Most employers view health insurance and retirement savings benefits as the most important for employee retention. In the SHRM survey mentioned earlier, 72 percent of the organizations reported leveraging health insurance—including medical coverage and flexible spending accounts—to retain valuable employees. Fifty-eight percent relied on retirement savings benefits—including 401k and stock options, to do the same. Other commonly offered benefits include paid holidays, paid vacation and sick time, and supplemental insurance plans including vision, dental, life and disability.
Benefits Most Employees Want
While 90 percent of employees consider health insurance most important according to The Principal Financial Group, it’s not the only thing they find attractive in a benefits package. For example, a study by the Families and Work Institute found that 87 percent of employees say the flexibility to balance work and personal life is “extremely” or “very” important.
When structuring an employee benefits package that will keep your staff happy and engaged in their work, it’s important to survey them and find out what they really want. Then think outside the box when exploring ways to satisfy their needs. You’re likely to find some benefits—like their birthday off and PTO plans that combine personal, sick and vacation time—that you can offer at little to no cost.
Other benefits popular with today’s workforce include onsite childcare, onsite fitness classes, health and lifestyle coaching, wellness program bonuses, referral bonuses, one-on-one investment advising, flexible schedules (including four-day workweeks), telecommuting opportunities, leadership training and career development programs.
Structuring a Package
There are no one-size-fits-all formulas for benefits offerings. Every business needs a plan tailored for its specific needs. Working with an advisor is the best way to structure a package for your workforce, not only to ensure you meet state and federal benefits regulations, but also to provide insight into costs and the needs of your particular organization.
Remember, happy workers are engaged in their jobs, increasing business productivity. They’re also less likely to leave for greener pastures, reducing your company’s hiring and training costs. While a solid employee benefits package may require a financial investment, the long-term benefits will be more than worth the expenditure.
by jeffp | Nov 6, 2015 | Employee Benefits
While a solid benefits package will help your company attract and retain top talent, setting one up incorrectly can subject you to fines and even criminal prosecution. Benefit planning is a complicated undertaking, and it’s all too easy for busy business owners to make mistakes. Consider the following potential legal pitfalls you need to avoid.
Required Benefits
The law requires all employers to provide their employees with time off to vote, serve jury duty or perform military service. You must also comply with workers’ compensation requirements, pay state and federal unemployment taxes, contribute to a short-term disability program if one exists in your state, and comply with the Federal Family and Medical Leave Act (FMLA), which covers maternity and adoption leave as well time off for serious personal and family medical conditions. In addition, you must withhold FICA taxes from your employee’s paychecks and pay your own portion of FICA taxes for each worker. Failure to provide any of these required benefits may subject your business to fines or criminal prosecution.
Government Scrutiny
Health insurance and retirement plans are among the benefits deemed most important by employers. They’re also subject to government regulations. For example, the Employee Retirement Income Security Act (ERISA) regulates employers who offer pension plans to their workers. It imposes a wide range of requirements, including employer-paid insurance to protect retirement benefits.
The Health Insurance Portability and Accountability Act (HIPAA) amended ERISA to impose requirements on group health plans. It increased employee access to health insurance benefits by limiting preexisting condition rules. The more recent Affordable Care Act requires all employers with more than 50 employees to offer health benefits to every member of their staff working full time hours or pay significant penalties. Implementation of the employer sponsored insurance portion of the new regulation was set for January 2014, though the government recently postponed it.
Audits
If you haven’t designed your employee benefits program appropriately, don’t think it will go unnoticed. The IRS is notoriously aggressive in their audits, as is the U.S. Department of Labor. Any discovered errors are subject to penalties. You may also need to repay any associated tax benefits your company has received.
Common Errors
According to benefits professionals, the most common mistake employers make is excluding employees from the plan. Regulations for voluntary benefits vary so it can be challenging for employers to determine which workers must be offered the opportunity to participate. Another common error is failing to enroll new employees in healthcare or supplementary insurance plans during the ‘open enrollment’ period—a fixed time after hire during which you may make changes without incurring additional costs. This is often the fault of poor administration by the employee responsible for the details—for example, when a small business puts a bookkeeper or office manager in charge of benefits.
Whether you have 20 employees or 200, don’t try to build a benefits plan without consulting a qualified advisor. You can reduce your costs by conducting preliminary research—including what your employees want and what your competitors are offering—on your own. Then hire a benefits consultant to walk you safely around potential legal pitfalls.
by jeffp | Oct 22, 2015 | Employee Benefits
According to the American Benefits Council, 401(k) plans are the most popular type of employer-sponsored retirement plan in the nation. In fact, 99 percent of employers who responded to the Verisight and McGladrey Compensation, Retirement and Benefits Trends Survey indicated they now sponsor a defined contribution plan. A WorldatWork survey even found that 88 percent of companies offering a 401(k) with a matching benefit continued to match employee contributions during the recent recession.
While 401(k) plans can produce meaningful retirement benefits, the overall success of any organizations’ employer-sponsored retirement plan is determined by its quality. It’s important to benchmark your program regularly against market norms for many reasons, including the following:
Benchmarking is required by law – Employers must monitor the cost of any 401(k) program they offer according to the Department of Labor. A benchmarking report will include an analysis of all the fees associated with the program, enabling you to compare them to market norms.
Benchmarking is usually free – Your 401(k) benefit advisor should be able to create a benchmarking report or contract with a third party to produce one for you free of charge. Worst case scenario, you can enlist the assistance of an independent third-party provider to conduct the benchmarking process for a reasonably small fee.
Benchmarking protects your employees – Benchmarking reports should include information on 401(k) plan complexity, participant (employee) fees and participant (employee) success in addition to a detailed accounting of employer fees. Unreasonable fees charged to plan assets (participant accounts) by investment managers, administrators and record keepers can quickly eat into retirement earnings. Even 1 percent in unnecessary costs can suck hundreds of thousands of dollars out of plan balances over time.
Benchmarking protects your company – A lack of due diligence can lead to expensive audits and even lawsuits. According to the Department of Labor, 75 percent of the 401(k) plan audits conducted last year resulted in fines, penalties or reimbursements. Several groups of 401(k) plan participants have been successful in securing legal victories over their employers for failure to address excessive fees associated with their retirement program. Maintaining a file of 401(k) benchmarking reports illustrates your intention of exercising due diligence in regards to administrative and investment management fees and expenses.
Benchmarking has become a standard – Retirement plan fees are continually changing. If you want to stay on top of the costs associated with your employer-sponsored 401(k) program, annual benchmarking is definitely time well spent.
In addition to regular benchmarking you may want to periodically request bids from at least three 401(k) service providers or ask your benefits plan advisor to do so. Analysis of competitor bids will allow you to make an informed decision on the quality of the retirement plan you’ve sponsored for your employees and make adjustments as necessary.
by jeffp | Oct 8, 2015 | Employee Benefits
We all know that unhealthy lifestyle choices increase the prevalence of chronic disease in our society as a whole as well as within our nation’s workplaces. Employees who are sedentary, practice poor nutrition or use tobacco products are more likely to suffer from dangerous conditions such as diabetes, heart disease and cancer. Not only do these diseases decrease quality of life and lead to premature disability and death, they also cost employers money.
When employees are unhealthy, productivity suffers. Chronic illness increases absenteeism and reduces performance, a powerful one-two punch to any business bottom line. Fortunately, workplace wellness programs can help employers mitigate losses. Through preventative education and incentives, these programs encourage workers to adopt healthier diets, find time to exercise, and make other important lifestyle changes to improve their health. They also have a direct impact on job satisfaction.
Many Employers Offer Wellness Programs
In a study sponsored by the U.S. Department of Labor and the U.S. Department of Health and Human Services, nearly half of U.S. employers reported offering some type of workplace wellness program. Among them, 80 percent included nutrition and weight loss counseling in their offerings. Seventy-seven percent offered smoking cessation assistance. All of these activities had a positive impact on business profitability. In fact, according to a study conducted by Aflac, 61 percent of employers report increased profitability due to their workplace wellness programs.
Wellness Programs Impact Employees
Research has shown that employees who work for companies offering wellness programs are more satisfied with their jobs. In one survey, 67 percent of respondents said an employer-sponsored wellness program shows the company cares about them. Sixty-seven percent also responded that they’re more likely to recommend the workplace to other job seekers as a result.
In addition, the Department of Health and Human Services’ study revealed wellness programs regularly result in statistically significant improvements in exercise frequency, weight control and smoking reduction—enhancing employee quality of life both inside and outside the office.
Employers Should Make the Most of Workplace Wellness Programs
Hiring and retaining top-notch employees is a concern for employers in many industries. A competitive benefits package often makes the difference when a candidate is considering multiple offers or a current employee is contemplating a job change. Fortunately, many professionals view a workplace wellness program as a valuable addition to the traditional benefits bundle.
Of course, employers must first ensure these professionals are aware that such a program exists at their organization. In the case of new hires, this can be accomplished by outlining the program in job advertisements as well as discussing it with candidates. According to a study by Virgin Health Miles/Workforce Magazine, 87 percent of employees consider wellness packages when choosing an employer.
Employers should also regularly review their organizations’ wellness offerings with current employees. Seventy percent of workers feel workplace wellness programs have a positive impact on their work culture. An employee who enjoys the culture of his or her workplace is more likely to be satisfied by the job at hand.
Finally, consider including incentives in your workplace wellness program to boost participation. In the Workforce Magazine survey, 78 percent of respondents indicated that rewards are important. Sixty-one percent reported the availability of incentives was the key reason they chose to participate in a wellness program.
If you’d like to learn more about workplace wellness, creating a wellness program, or increasing participation in your current program, consult your benefits advisor.
by jeffp | Sep 21, 2015 | Employee Benefits
Salary alone is not enough to recruit and retain your industry’s best professionals. A comprehensive benefits package is necessary as well. Most employers know this, and they spend billions of dollars a year on benefit offerings as a result. However, the recruitment and retention value of any benefits program is wholly dependent on employee participation. An outstanding package, complete with all the bells and whistles, is essentially worthless if few of your employees elect to enroll.
Fortunately, there’s a simple key to maximizing participation rates; communication. Here are four keys for effective employee benefit communication
Think: EARLY
Don’t wait until new employee orientation to introduce the value of your company’s benefits package. Mention the benefits offered in your job postings. Talk more about them when interviewing prospective new hires. When you make an employment offer, reiterate them once again. If your top candidate is entertaining more than one opportunity, you can bet he’ll consider your benefits package.
Think: OFTEN
A recent survey conducted by one insurance company found that a mere 32 percent of employees are comfortable making decisions about benefits offered by their employers. Regular communication about your company’s benefits package can increase awareness, understanding, and as a result, participation. Don’t rely on annual open enrollment periods alone. Consider a monthly benefits newsletter, quarterly benefits lunch-and-learns, and webinars employees can access at any time to learn more.
Think: CLEARLY
Jargon-filled booklets about health insurance, life insurance and retirement plans are real employee turnoffs. In various surveys, employees have suggested that easier to understand documentation would improve their utilization of the benefits offered by their employer. They’d also like documentation personalized to their needs and opportunities to meet face to face with benefits experts.
Think: VALUE
Your employees know exactly how much compensation to expect in each paycheck, but they probably have no idea how much their benefits are worth—even if they’re participating in the program. Don’t focus on individual offerings but on the total value of your company’s benefits package. This will include employer-paid taxes, commuter-assistance programs, voluntary insurance, vacation time, sick days and training opportunities as well as your employer-sponsored health plan, pension fund or 401(k) matches.
Employees who understand their benefit options and appreciate the value of the package offered are more likely to participate—maximizing enrollment levels. However, effective benefits communication is also essential if you want to retain your best employees. One recent survey found that 59 percent of workers would move on to a job with slightly lower pay if they believed it came with better benefits. Implement the suggestions above and talk with your benefits provider to make the most of your employee benefits program.
