As the cost of maintaining employee benefit programs continues to rise, a report finds that some companies have learned that prevention is the best medicine to keep costs down.
“Indeed, medical insurance is far and away the most expensive benefit item being offered by organizations, and it can be a budget buster,” says the Aberdeen Group report, Taming the Benefits Management Beast: Driving Costs Down and Satisfaction Up. “The answer isn’t found in reducing medical insurance coverage, but in finding ways to make it less needed.”
Two cases in point are wellness programs and disease management programs—both of which attempt to reign in the need and cost of other healthcare by keeping employee more healthy to begin with.
Getting there is only half the battle as there are obstacles in the way for managing an effective benefits management program.
Seventy-two percent of all organizations cite budget as the top challenge; 24% cite resistance to change; 18% cite the lack of automation of benefits data collection and management; and 15% cite a lack of visibility into the overall benefits program.
“Adopting an effective benefits management program starts with ensuring that the benefit elements being offered to employees are competitive, serve the entire demographic population of the staff, and include input from individual workers,” the report says.
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It finds the greatest gains in benefits management programs have been with those organizations that clearly communicate the benefits program to employees, routinely survey employees for their satisfaction with the program, and regularly measure the plan’s overall effectiveness.
To evaluate market competitiveness, 94% of all organizations cite published benefits reports and compensation surveys as their primary source while 77% rely on benefits data directly from other companies in their market.
And a top level benefits program goes beyond just medical insurance and a great stock plan. Employees want less tangible items as well, those that directly impact their own success.
They want a culture that fosters respect, access to top executives, access to challenging work, the ability to influence decisions that affect them, and a manageable workload.
“These benefits,” says the report, “go a long way toward retaining employees.”
To comment on this story, email craig.sebastiano@rci.rogers.com.