When it comes to employee retention, maintaining your benefits plan is vital. Frequent reductions to benefits can cause employees to become frustrated, and possibly seek work elsewhere. However, a high-quality benefits package can get expensive. In a volatile market, many businesses are looking to cut costs where they can.
Is there a way to save money on employee benefits without eliminating options? Absolutely. There are many ways you can tweak your plan to keep all the essential benefits in place, but at a reduced cost overall. It just takes a little creativity and planning, but you can definitely create a solid cost savings benefits plan to keep your employees happy.
Evaluate Your Spending Habits.
A benefits consultant or insurance broker can help you analyze your company’s spending and break down the data to show you places where you’re overpaying for certain perks and coverage. If employees aren’t using some of your company’s benefits, you can downsize without eliminating them to save costs.
When it comes to medical costs especially, many businesses are actually over-insuring. A robust healthcare plan is important, as many employees won’t stay for long at a company with limited coverage. However, you can often scale back considerably without eliminating any essential benefits.
A good consultant or broker can look at your current expenses and develop a spending forecast for the next year. This can help you plan a budget where you’re not overpaying. A broker or consultant can even help you negotiate a reduced rate on healthcare based on risk assessment, which could end up saving you considerably.
Educate Your Employees.
If you’re contributing to retirement plans and healthcare costs, the more your employees know, the better. Usually, employees contribute some amount of their income to certain benefits. If they find ways to save money, those savings will be passed along to you.
Let’s look at healthcare as an example. Oftentimes, people err on the side of more coverage, just in case. However, many employees may actually be able to get by with lower cost bronze plans rather than options like gold and silver, depending on factors like out-of-pocket maximums. Holding a seminar during work hours carefully breaking down the costs of coverage – and where there’s an opportunity to save – can help employees make more frugal decisions.
Implement A Wellness Program.
From smoking cessation programs to weight loss programs, having access to information about health and wellness at work makes it much easier for employees to adopt a healthier lifestyle. This means benefits costs go down as less and less employees will need to opt for more expensive plans due to risk factors like obesity, smoking, or diabetes.
Studies show wellness programs work. A survey conducted by United Healthcare showed 67% of employees enrolled in a wellness program lost weight, 23% quit smoking, and 30% said a disease was detected earlier because they became more proactive about their health.
Not only is this a tried-and-true method for saving costs on healthcare, it benefits your company in other ways. Healthier, happier employees tend to be more productive workers and take less sick days – both of which benefit you financially.
Retool Your Employer Contribution Strategy.
Employer contributions are always an incentive for an employee to stick around. However, retooling how you make contributions can help you save money on employee benefits without removing anything from your package.
For example, you could lower the amount you contribute to an employee’s 401k. You could also – if it’s legally permissible in your state – offer a flat rate contribution to healthcare benefits instead of paying a certain percentage. This way, a higher cost plan won’t cost you more money.
You can also take steps to incentivize employees to opt for lower cost choices via contributions. For example, some companies offer to pay for Bronze healthcare plans in full, while only contributing a set amount to higher tier options. Depending on the cost of your healthcare plan and the size of your company, this strategy could help you save.
The Bottom Line
Saving money on employee benefits isn’t easy, especially if you’re hoping to do so without eliminating anything. However, a little creativity and minor adjustments go a long way in developing a more cost-efficient benefits package. This does not mean cutting out perks, but rather changing how they’re offered.
Any changes to employee benefits – even changes that don’t eliminate benefits outright – should be discussed in depth with your employees beforehand. Health insurance, retirement funds, and more can be confusing. You’ll need to take extra steps to educate your employees if you make any adjustments so they remain confident they’ll still get the benefits they’ve always enjoyed.
Need some help? At UBC Insurance Solutions, we worked for you – not insurance companies. We work one-on-one with every one of our clients to develop a cost-efficient benefits package to meet their unique needs. If you’re looking for ways to save, reach out here and someone will be in touch shortly.