When it comes to navigating the world of employee benefits, there’s a lot to take in, especially if you’re a first timer. Among the suite of benefits you’re likely to be offered, voluntary benefits are often misunderstood. What are Some Examples of Voluntary Benefits? Voluntary benefits include a variety of options, all designed to...
Get the Best Results from Your Benefit Budget Conversations
Many companies are recession-planning and looking for ways to cut costs. But employees remain top of mind for employers, with 55% of businesses saying they will not reduce salaries if there is a recession and 47% saying they will not reduce benefits, according to Employee Benefit News.
Benefits are critical for attracting and retaining talent. Because of this, it is critical to make a strong case for employee benefits during budget conversations with leadership. So, how can you be ready to have budget conversations with your leadership team?
The Impact Cutting a Benefits Budget Would Have
Why do you come to work? Two big reasons? Salary and benefits. They provide care, value and investment for the employees. And showing you care boosts morale, loyalty and productivity. These are also a form of compensation. Cutting into benefits and salaries could cause a decrease in productivity and the business’s overall performance.
A big question coming into play is how the pandemic changed businesses. According to the World Economic Forum, 62% of Americans believe their health is more important to them than before the pandemic. The decisions based on the budget of benefits for employees fall in line with the change the pandemic had. It became hard to separate home and work. Many people feel wellness matters more than ever. When companies support employee wellness, it creates loyalty among employees and increases productivity.
Preparing for Benefits Budget Conversations
Conversations about money can be uncomfortable. Here are some things you can share to support your cause:
- Benefits objectives
- Company values and how your benefits tie into them
- Employee feedback (surveys, anecdotal, etc.)
- ROI of the investment
- Comparison of current benefit packages with your competitors
The Benefit Budget Conversation
When the benefit budget conversation is here, give the information you prepared and make the argument on why benefits cannot be reduced. Keep the conversation focused on the value benefits have on your company, including:
- Employee retention
- Attraction of more talent
- Health/medical coverage is necessary
- Employee work/life balance
- Show proof of benefits plan success
After presenting your information, the conversation can go many ways. If the financial team or leadership team does want to reduce the benefits budget, being able to navigate this conversation can be hard. First, ask questions. Make sure you understand where they are coming from. Knowing the bigger picture can help with the next step.
Offer alternatives. Offering solutions rather than simply calling attention to a problem can provide an educational opportunity and perspective from our area. This can show that certain benefits fit into the larger picture of the company and give a solution to the bigger problem. Demonstrate that you thought through the issue at hand and considered multiple options.
Can you Save Money in Your Benefits Budget Without Impacting Employees?
Absolutely! Communicate the benefits you offer to your employees more often, since benefits can be under-utilized or misunderstood. This can make their decision more informed and intentional. Repurposing the budget to focus on the benefits your employees want can also save money. This comes from communication, surveys and market trends. Finally, use data to guide decisions, as this can identify areas of waste or inefficiency.
In 2022, WEX’s annual employer survey showed that the biggest challenges employers face with benefits are within education. This includes things such as consistency and engagement in meetings/webinars, bite-size educational content and the biggest: engagement. Focusing on challenged areas can help identify waste or inefficiency, create a more functional and beneficial budget and company overall.
The information in this blog post is for educational purposes only. It is not investment, legal or tax advice. For legal or tax advice, you should consult your own counsel. To stay up to date on benefits trends and insights, subscribe to our blog.