For many HR leaders, the beginning of a new plan year can be a hectic time, with the pressure of enrollment deadlines building as employee questions pile up. This leaves little time for a proper review of the company’s benefits program. It is unfortunate because carrying out a thorough annual benefits strategy review is not just good practice; it’s an essential step for controlling costs, maintaining compliance, and attracting and retaining productive and skilled employees.
The benefits of this yearly review are clear, but it can be challenging for busy HR directors to find the time and mental capacity to take on this task while also addressing the issues that arise in their day-to-day role. However, an effective strategic benefits review can make their daily burden lighter, and an employee benefits consultant can help guide the process to alleviate the burden on HR teams.
Look at the Current State of Benefits
Before pressing forward with a review, businesses need an honest assessment of their current benefits’ costs and utilization levels, as well as their employee satisfaction. This can highlight which benefits are inspiring the most engagement and which ones employees are not taking advantage of for various reasons.
It can also be helpful to review claims data to see where the company’s healthcare dollars are being spent. This can point to opportunities to contain costs. For example, a business experiencing a spike in visits to emergency rooms could potentially reduce costs by offering better options for urgent care.
This process should include a thorough assessment of vendor relationships as well. Consider working with an employee benefits consultant to benchmark your vendor performance against the current industry standards to confirm their service levels meet your needs and spot missed opportunities for additional value.
Assess the Competition
Keep in mind that your benefits don’t exist in a vacuum. Today’s labor market is tight, and the competition is tough, but even if you’re not recruiting, employee retention is a perennial concern. That’s why it is essential to be aware of what other employers in your area and industry offer in terms of benefits. This is particularly useful if you have limited resources, as it can show you where you’ll get the best return on investment. The goal here is not to match what the competition offers; it’s to understand which benefits make the most significant difference for your desired workforce and focus your efforts there.
It is also helpful to research current trends in benefits on a more general scale. Whether it’s student loan repayment or mental health solutions, employees’ preferences often change with the times, and meeting their expectations can make a big difference.
Evaluate Compliance and Risk
Compliance requirements constantly change, and staying on top of these alterations is the only way to avoid costly penalties. Annual review time is the perfect opportunity for a thorough compliance audit that includes essential requirements such as ERISA, COBRA, ACA reporting, and state-specific mandates.
In some cases, HR departments may find vulnerabilities during this process, especially if they use multiple platforms that do not communicate or rely on manual processes. These can lead to expensive problems if not addressed properly.
Plan for the Future
It is always best to approach annual reviews with a strategic mindset. Instead of making business decisions based on next year’s needs, consider where the organization will be in five years. Consider factors such as its expected growth trajectory, potential regulatory changes, and shifts in workforce demographics.
By taking a long-term view, businesses can give their benefits strategy a better chance of standing the test of time and avoiding the need for constant overhauls. It can also help demonstrate to leadership how investments made now that may not have immediate returns can position the company for future success.
Bear in mind that even the best benefits package will not provide much value if employees are unaware of what is available to them and how to use it. Be sure to consider how to educate employees about their options, when and how you will communicate changes to them, and what resources you can offer them for ongoing support throughout the year.
Carry Out a Winning Annual Benefits Strategy Review
Most HR directors are not benefits specialists; juggling talent management, employee relations, compliance, and other priorities often takes up all their time. Trying to become an authority in every aspect of employee benefits on top of everything else is neither realistic nor necessary.
Working with an employee benefits consultant with a firm grasp of the finer points of strategic benefits planning can give you back the time and headspace you need for other priorities.
If you’re ready to move beyond reactive benefits management and develop a truly strategic approach, the team of benefits consultants at Business Benefits Group is here to help. Reach out today to schedule a consultation.