If you’re trying to create a benefits plan 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 a solid game plan for the future—you should dig into as much hard data as possible. Focusing on these five types is a great place to start:
#1: Biggest health care expenses
Ask your broker for the latest data about your employees’ most expensive health conditions or behaviors. Then ask your broker how you could tweak your plan design to better manage those costs while still providing the best possible care. (For example: if conditions related to 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: Employee satisfaction survey results
The best time to collect that data is three months before your final plan is due; this allows for enough time to process this feedback, tweak your plan 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: Benefits participation data
Create a spreadsheet to track how many employees use—and to what degree they use—your financial wellness programs, decision support tools, retirement benefits, wellness initiatives, and any other benefits you want to understand better. If your vendors can’t provide this participation data to you, fill in the gaps by surveying your employees (see previous tip).
Having actual numbers to review will help you decide what to change come plan design season—whether than means dropping certain programs, switching to a new vendor, or trying a new approach to promoting what you already offer.
#4. 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 average employee contribution rates for the two biggest retirement vendors in the country last year: Vanguard (6.2%) and Fidelity (8.4%).
If your workforce’s contributions are below these averages (or even if they’re not), consider adding a financial wellness program or a benefits decision support 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 decision support 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: 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.
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