Cooking Up a Benefits Plan
The field of human resources is changing. In our HR Redefined series, we give innovators a medium to share personal reflections, professional advice, and best practice guidance.
At Red Frog Events, the people are our number one asset. We have 70 full time employees, and they are what we do and why we do it. As the Total Rewards Sr. Manager, it’s my job to make sure we’re taking care of our people so they want to stay with us for years to come. I do this using a benefits “recipe” that I’ve mastered over my eight years with Red Frog—and it’s one I’m happy to share in order to help you cook up your own unique and appetizing benefits plan.
There’s one other thing you should know about me: I love donuts! I’ve learned to bake them, I go out of my way to find the best local donuts in every city I visit, and I even dressed my son and dogs up as donuts for Halloween—I’m all in. So, the rest of this blog will be donut-themed. (Bear with me!)
Setting the Stage
Attracting employees has become a lot more difficult in recent years. Unemployment is on a steady decline, hitting 4.3% as of May 2017. The job seeker to job ratio has also decreased to 1.4:1—almost a 1:1 ratio. We’re experience a gig economy that takes qualified candidates off the market. Not to mention most of the baby boomer generation is retiring, leaving a widening skill-gap. This means that more employers are competing for the same pool of employees in a shrinking talent pool.
The power has shifted to the candidate, which can be a challenge for recruiters. According to Fortune, millennials are willing to take $7,600 less in salary for a company that has better career advancement and culture. When an employee leaves a company, it can cost up to 6-9 months’ salary in recruiting and training efforts alone. This shows me that we need to increase our focus from recruiting to retaining employees.
How do you retain employees? I want to dare you to be a donut in a world full of plain bagels!
But not just any donut. I want you to create the most amazing, eye-catching benefits package, so that your employees want to take advantage of them all.
Let’s Get Cooking!
To kick off our recipe, we need four ingredients:
- Supportive Leadership - Make sure you’re supported from the top down.
- Dedicated HR Individual - If you’re all in, your benefits can be all in.
- Deep Employee Understanding - Know the needs and wants of your employees.
- Sprinkles! - Don’t forget that little extra appeal that keeps them coming back for more.
Now that we have our ingredients ready, here are the four steps for creating a top-notch benefits package:
Step 1: Develop a Mission
Create a mission statement that reflects your company's goals. At Red Frog, we have something called the “Red Frog Way,” which is our guiding principle. Your mission should be your purpose and driver when crafting a benefits package. Setting an overall goal will help you define what to offer and why you’re offering it.
This is also where our first ingredient comes into play: Supportive Leadership. I started at Red Frog as an intern with no HR experience. One day, our founder and CEO asked me to “go and get us some benefits.” At that point, I was the one cleaning up the office, so I became HR. His only guideline? “I want the best.” He wanted robust benefits at an affordable rate, but most importantly he didn’t want employees to ever question if they could afford to go to the doctor or get the care they need. This showed me from day one that I had wonderful support from the CEO, so I went out and found us a broker.
A guiding mission can also provide consistency in your plan offering. I recently had a baby and I learned that selecting a pediatrician is a long-term commitment for your child. That’s one key reason why multi-year plans are important to employees. They’re going to go through life events where they want stability, and it’s important not to change their health care in a way that uproots this stability.
Step 2: Customize
To offer the right benefits, you have to understand the needs and wants of your current employees. Start by assessing your employee demographic—gender, marital and family status, age, etc.
How do you know what employees want? You survey them. At Red Frog, we conduct two pulse surveys a year. These are a quick gut-check on how employees are feeling about our company. We also conduct a longer employee engagement survey once a year where we list out every benefit and perk that we offer. Employees rank these on a 5 point scale, from extremely satisfied to not satisfied at all. We also ask which benefit is the most important to them and which is the least. That shows us which benefits we can drop if cuts need to be made, and we can refer to the data to explain adjustments to employees.
The core of a benefits package is the health care plan. When you invest in this core, voluntary benefits and perks follow naturally. Make your benefits package easy to digest by limiting the amount of plans you offer. You want to meet the needs of your employees without overwhelming them. Employees don’t live in this world every day, so if they start hearing FSA, HSA, HMO, etc. they’re going to tune out and make an uninformed decision at the very last minute.
You want to build a benefits package that touches on individual, company, and home life. We offer unlimited PTO, work-from-home, flexible hours, casual dress, paid sabbatical after 5 years of employment, generous charitable matching, on-site gym, and much more. While you may wonder how you can offer these types of benefits and perks with a limited budget, know many of these are actually free or very low cost.
Step 3: Promote
What’s a great benefits package if nobody knows about it? Promote your offering externally to website visitors, job applicants, and via your Glassdoor profile. Internally, don't let employees just set their benefits and forget them. Keep them top of mind throughout the year by promoting your benefits and perks whenever you can, not just during open enrollment. Do this by utilizing community spaces for flyers and share new benefit tips and offerings in weekly town halls or all hands meetings. Then recap all of your offerings during open enrollment communication.
Step 4: Taste Test
Don’t be afraid to do a trial run of a new benefit or perk for 90 days to see how it does. Gather feedback with surveys and if the benefit or perk is successful, introduce it long term. As you review employee feedback, don’t forget to share it with leadership. They are invested in these plans too and want to know how they’re performing and being utilized.
Don’t forget to review existing benefits and make sure they continue to align with your company mission and goals. Research the market, and talk with your broker when preparing for open enrollment to see what is trending and most appealing to other employers. Review competitor offerings to make sure you’re not missing anything or potentially losing talent. Most importantly, communicate your findings and any changes with your employees. They want to know they have a voice, and you can show them exactly how they influenced the benefits package you create.
For more information on building out a benefits plan and employee benefits in general, take a look at our comprehensive Employee Benefits Guide.
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