It’s no secret that HR analytics have transformed the way we work over the past decade. There’s no shortage of data that supports our HR practices, and we’re able to make more informed decisions than ever before.
That applies to your company benefits package, too. If you’re trying to create a benefits package that makes both your employees and your CFO happy, it’s not enough to make decisions based on what you’ve done in the past or the random feedback you get through the HR grapevine. To understand what’s actually working and what’s not—and to create an employee benefits package fit for the future—you should dig into the numbers as possible.
Here’s how to design compensation and benefits packages that are backed by HR data.
1. Identify your biggest health care expenses
Healthcare costs are one of the most important types of HR data collected. Figuring out ways to curb overspending is the most impactful way to boost your company’s bottom line and save your employees money in a year when everyone’s worried about their finances.
Ask your broker which chronic conditions or behaviors are most common at your company, and which ones are most expensive. Then ask how you could tweak your plan design to better manage those costs, while still providing the best possible care. For example, if heart disease or obesity are the biggest strains on your health care budget, maybe it’s time to add a healthy lifestyle program to your benefits design.
If your broker just shrugs at your request…it’s time for a new broker.
2. Review employee satisfaction survey results
The best time to collect that data is three months before you finalize your employee benefits package for the year. That allows for enough time to process this feedback, tweak your benefits package accordingly. (And survey your employees again to get their feedback on your revised plan, if you’d like!)
You don’t need to act on every suggestion your employees offer, but you’ll likely learn something useful, and your employees will appreciate your transparency.
3. Look at benefits participation data
Track how many employees use your financial wellness programs, decision support tools, retirement benefits, wellness initiatives, and any other benefits you want to understand better. Look at how often your company benefits package is being used, too — are your employees using their sponsored meditation app once a month? Or once a year? If your vendors can’t provide this participation data to you, fill in the gaps by surveying your employees.
Having actual numbers to review will help you decide what to change when benefits plan design season rolls around—whether that means dropping certain programs, switching to a new vendor, or trying a new approach to promoting what you already offer.
4. Check out retirement contribution rates
Ask your retirement vendor for your employees’ retirement contribution rates—both as a whole, and broken down by age and income level. Then compare those rates to the national average (Last year, employees contributed 7% of their salaries on average).
If your workforce’s contributions are below average (or even if they’re not), consider adding a financial wellness program or a benefits guidance tool to your plan.
A financial wellness program can help your employees manage their other non-benefits-related financial burdens better, freeing them up to contribute more generously to their 401(k)s. And a benefits guidance tool can drive bigger contributions by showing employees exactly how much their contributions will save them on taxes next year—and by showing them exactly how much they should be setting aside right now if they want to reach their retirement goals.
Bonus tip: If your retirement vendor’s demographic data reveals that certain employee groups would benefit from these tools more than others, consider putting together a get-the-word-out campaign specifically for those groups.
5. Assess employee demographic data
Some HR teams still design their benefits packages almost exclusively to retain existing employees (especially certain salt-and-pepper executive types), at the expense of attracting talented younger workers.
This, I’m afraid, is a mistake. Ask your broker for information about the values and preferences of the available talent you’ll be recruiting from. Then use that information to design a package that will attract and retain the workforce you have AND the workforce you want in five years.
Oh, and if you’re not able to afford all the benefits these demographic groups yearn for, do the next best thing: add benefits communication tools to your plan that can provide personalized advice to every employee about the benefits you can afford.