No longer a “one-size-fits-all” model, today’s benefit plans are much different than they used to be. Many companies are exploring a mix and match model of benefits, where they learn what’s most important to their employees and offer a selection to choose from, allowing employees to cobble together the benefits that are most important to them.
If you want to ensure that you’re providing a benefits package that will encourage your current employees to stay put, and to attract the new hires you need, consider developing a benefits system that acknowledges different priorities for different groups of employees and allows them to pick and choose which benefits they want.
What will benefit plans look like in the years to come?
Cutting-edge benefit plans offer more choice and are likely to become the norm in the future. These plans often include an array of options from which employees can choose various benefits, such as student loan repayment, flexible work options, gym memberships, longer parental leave and mindfulness benefits. As traditional healthcare coverage has become increasingly expensive, newer benefit plans also offer choices in the types of healthcare benefits offered: Rather than purchasing an entire healthcare benefits plan, employers can offer employees various pieces such as hospital coverage, prescription coverage and accident coverage.
For some employees, flexibility benefits and student loan repayment are more valuable than health benefits. For example, one survey found that working parents value work flexibility (84 percent) and work-life balance (80 percent) significantly more than health insurance (42 percent). Mixing and matching benefit options within one plan gives employees the option to choose what’s most important to them.
How do employee-selected benefit plans work?
Employers start by selecting the types of benefits they’re interested in offering, then develop a system for ranking the value of each one. For instance, you may offer each full-time employee benefits worth 50 points. Pricey benefits such as health insurance may be worth 30 points, while less expensive benefits such as flexible hours or gym memberships would be worth fewer points. Every employee has the option to select the benefits they want up to the total amount you’re willing to offer. With a wide variety of choices, this type of benefit plan makes it possible to satisfy employees with a wide variety of needs and expectations.
Benefits of offering benefit choices
Offering an array of benefits and allowing employees to choose what they want can be an important part of attracting and retaining good employees. In fact, seven out of 10 employers say they offer voluntary benefits to improve morale for their existing employees and to attract and retain new talent, according to LIMRA.
In addition, allowing employees to choose their own benefits can save money for employers. Rather than paying for gym memberships, massages or other costly perks for every employee, employers will only pay for specific benefits for the employees who select them.
Flexible plans that will appeal to a diverse workforce, allow employees to obtain the benefits that are most important to them. For instance, young employees with high student loan bills can opt for student loan repayment, and employees with young children may opt for parental leave or flexible hours, which may be more valuable to them. Employees who want more time off or opportunities to work remotely can also get what they want—and in many cases, their choices may save money for their employers.
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