The 5 Most Common Mistakes with Employee Benefits

Progressive companies are increasingly relying upon
employee benefits to attract and retain top talent
according to a new MetLife study.  55% of employers rank
‘employee retention’ as their No. 1 benefits objective.
Unfortunately, the same study showed that only 33% of
workers feel strongly that their company effectively
educates them on their benefits options.  This reveals just
one of the many problems the employers face when confronted
with the daunting task of developing a benefits strategy
and communicating it with their workers.  If you’re going
to use benefits to build a solid workforce, here are the
five most common mistakes to avoid.

Lack of communication

Perhaps the biggest mistake employers make is not involving
the employees during benefits decisions.  Open
communication is key.  Finding out what employees want in
regard to benefits should be your first step before making
any changes.  Communicating your objectives will make
employees an active part of the decision making process.
Different employees have different needs.  Don’t assume
that the folks in the warehouse are interested in the same
benefits as the middle managers in accounting.  This is a
big mistake.

Cutting benefits to control costs

This is often misused because it is a short term solution
to a long term problem and frequently results in high
levels of employee turnover.  While cost sharing is an
important element in a long term benefits strategy, it’s
important to do this over multiple years.  Managed
incorrectly, this is a serious morale killer.  To avoid
this, develop a 3-year cost sharing timeline and instead of
trying to figure out how to cut benefits, focus on
exchanging low value / high cost benefits for high value /
low cost benefits.  Approaching this with a give-and-take
mindset can alleviate most complaints from your employees.

Offering everything but the kitchen sink

Offering every known benefit causes more problems than it
solves.  When you offer every benefit imaginable, you set
yourself up for skyrocketing costs.  Also, down the road
your employees will ask why you never add new benefits.
Instead, consider starting with a simple package and adding
new benefits incrementally.  This will also provide the
advantage of testing new benefits to understand their
impact on your workforce.

Offering the benefits your management team suggests

Don’t assume that feedback from managers will give you the
best idea of what benefits to offer.  While this is a valid
way to gauge several business issues, benefits desires are
often personal and not communicated to managers.
Administering a survey to collect information about what
employees want from their benefits is a simple solution.
Larger companies can form a committee to explore the issue
further and develop champions of the process through
leaders in the organization, encouraging everyone to get
involved.

Taking a short term approach

Anything you do to make short term improvements without
considering long term objectives can be dangerous.  This is
often where an outside advisor can be advantageous,
especially one with a long history in business that can
share experiences that support or refute possible changes.
By focusing on long term goals like employee retention,
productivity, and absenteeism, you can navigate many common
obstacles.

Designing and implementing a benefits strategy can take as
little as two weeks and the long term implications can be
sizable.   As the labor market tightens, employee benefits
will continue to grow in importance as companies seek an
edge to attract and retain strong workers.

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Mike Nacke designs employee benefits for growing
manufacturers to attract and retain top talent, improve
productivity and employee morale, and reduce absenteeism.
He is also the host of Employee Magnetism, the talk show
that offers practical advice on employee retention and
attraction strategies from some of the nation’s top experts.
For more information, visit http://www.mikenacke.com