Are You Getting the Best Benefit From Your Employee Benefits? Are your employee benefits giving you the payback you deserve in increased employee appreciation and satisfaction? Chances are, your employee benefits are not. On average, organizations spend 41 cents for employee benefits for every dollar of payroll. That's 29% of the total employee compensation package. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68% of the cost or market value of the employee benefits they receive.
In fact, the most recent data indicates that employers are spending 43% of total pay on types of employee benefits.
Employees undervalue their comprehensive set of employee benefits for many reasons including: employers communicate the value of employee benefits poorly, the employees have little or no choice in employee benefits packages or options, and the employees misunderstand the market value of their employee benefits.
Maximize the Value of Employee Benefits Expenditures
Employers can overcome these factors by allowing employees to make choices about the types of employee benefits and by providing lots of information. You can jump start the education process by providing paycheck inserts that detail your cost for each employee benefit. Other ways to get employees to think about the value of their employee benefits include interactive computer quizzes, employee benefits fairs, telephone hot lines, workplace posters and video tapes or television discussing employee benefits.
Firms that wish to maximize the value of their employee benefits expenditures need to survey their employees to ask them the types of employee benefits that they value and how much they value each type. Employee benefits surveys or focus groups are important first steps in understanding employee preferences for types of benefits. Relevant questions about the desired types of employee benefits might include the following.
What types of employee benefits are most important to you?
If you could choose one new type of employee benefit, what would it be? If you were given X dollars for employee benefits, how would you spend them? Follow-up research about the cost of employee benefits that employees desire can help you determine which programs will provide the most â€œbang for the buck.â€ On the basis of the data developed, you can adapt your employee benefits offerings or provide choices about types of employee benefits that are consistent with organizational objectives such as employee retention or performance.
Consider Types of Employee Benefits
The variety of employee benefits offered today is immense. Some employee benefits, such as health insurance and retirement benefits, are almost institutionalized or expected in the United States.
However, other employee benefits are not - and these are the types of employee benefits that set companies apart. Organizational values are often manifest in the types of employee benefits organizations offer. Thus, the employee benefits help to establish an organization's positive reputation as an employer of choice in the marketplace.
So, isn't it about time to reconsider the employee benefits package that your company offers? Following is a long list of the types of employee benefits that are offered across hundreds of U.S. firms. The cost of these employee benefits varies, as do employee and employer perceptions about the value the employee benefits deliver.
The key for organizations looking for a competitive edge, through the types of employee benefits, they offer, is to determine what employee benefits you can provide that are most valued and useful to your employees. Hopefully, these employee benefits will approach a 1:1 cost to perceived benefit ratio. Types of Employee Benefits
Following are samples of the employee benefits that are offered across many organizations. Use this list of employee benefits to think...
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