Employers usually expect to offer some kind of benefits. Employees expect to receive them. The problem starts when the workplace benefits do not align with worker needs. Poorly designed benefits programs get less use while they still cost money. Even worse, they may not contribute to long-term employee engagement or retention.
About three in four employees say that comprehensive, personalized benefits would help them to stay with their employers. For this reason, many organizations are switching to personalized benefits programs. With this guide, HR professionals will better understand how these programs work, why they grow in popularity and how best to implement them.
Understanding Personalized Benefits Programs
The key to unlocking the advantages of personalized benefits programs lies in understanding what it really means. Many companies offer a range of benefits that their employees may or may not choose to use. By itself, the presence of different benefits does not indicate personalization.
The personalized benefits program takes options to the next level, providing value that truly suits each employee. Where one business might offer free gym memberships, another offers a wellness allowance. That way, workers can use the money however it suits them, whether they go to the gym or download a mental health app.
Reasons to Customize Benefits for Employees
Administrators with established benefits programs might wonder why they need to reconsider their offerings in the first place. The answer is simple. The changing dynamic of the modern worker makes it harder for businesses to create benefits that work for everyone.
Diverse Ages
As workers age, they are less likely to retire than previous generations. The U.S. Census Bureau reports that employees over age 55 represent a quarter of the workforce. Thirty years ago, their share was about 10%.
While baby boomers increasingly stay in the workforce, younger generations continue to come up. McKinsey estimated that Gen Z represents a quarter of the workforce, as well. Greater diversity in the workplace calls for benefits that appeal to everyone. Tailoring the workplace retreat to the younger crowd looking for excitement might alienate the older employees. Of course, selecting benefits to suit workers with decades of experience could leave new employees out in the cold.
Workplace Misalignment With Employee Expectations
Keeping benefits open and varied helps to address workplace misalignment with employee expectations. Administrators sometimes assume that employees want certain things based on age, generation in particular. These assumptions can damage worker sentiment. For example, employees increasingly value flexibility as they get older. A workplace with few Gen Z workers might need to lean into flexible benefits options, even if they thought it unnecessary.
Different Life Stages
With a growing range of ages and experience levels in the workplace, companies cannot expect everyone to utilize the same benefits. Offering subsidized day care is a great benefit but only works for parents with young children. Adapting such a program to accommodate adult day care or respite care helps employees with aging parents. Adaptability becomes the main feature, so that workers can change as they move through life.
Unique Priorities
Even if everyone at the business is about the same age and life stage, they may still have unique priorities that call for customized benefits. A workplace exercise program can appeal to everyone, but it does not appeal to everyone. Where one person loves free, daily access to the gym, others might want a national parks pass. The ability to choose the best program increases use and the value each employee gets.
Challenges in Implementing Personalized Benefits Programs
Businesses that still offer traditional benefits programs may cite a number of challenges to implementing personalized benefits. Fortunately, the most common obstacles have reasonable solutions.
Balancing Value and Efficiency
Customizing a benefits program that provides more of what employees value can cost more money. The trick for most companies is to look for ways to keep offerings efficient. Program administrators should evaluate options, consulting with professionals like individual health insurance brokers for advice.
Setting a budget can help employers determine how to maximize effect. For example, it may make sense to offer a stipend for relevant activities instead of contracting with a single vendor. This approach better ensures that workers use the benefit, instead of losing half the money for no advantage.
Seeking Employee Feedback
The best benefits programs integrate regular employee feedback. Workers can vote with their words, their literal votes or their use of the actual benefits. Administrators sometimes come into benefits program design with a specific set of assumptions. If these assumptions prove incorrect, the company may spend more money on underutilized benefits.
Instead, getting routine feedback from workers can ensure that the benefits actually suit the workforce. Before implementing or changing the program, the company should seek input from employees. Input could come from anonymous surveys, casual conversations or even focus groups.
Ensuring Effective Onboarding
To avoid wasting money on any program, companies must implement effective onboarding. Employees who do not know about the program or how to use it are less likely to take advantage. For example, of employers that offer employee assistance programs for mental health, more than half of their workers never use it. About a third of employees who need it also do not use it, even when they could.
Onboarding for benefits should look similar to employee onboarding. Workers should receive opportunities to learn about the programs, not simply from HR emails or texts on a messaging platform. Employees should have a chance to ask questions and get help in utilizing the programs.
Advantages of Personalized Benefits
Personalizing benefits programs can take significant investment of time and money. Companies may resist undergoing the effort until they realize how customized benefits can increase engagement, retention and positive branding as an employer.
Increase Engagement
Increasing engagement is a difficult task, especially as global employee engagement continues to drop. Gallup estimates that about one in five employees engage highly with their workplaces. The rest may just go through the motions until they find a better job, which proves harder in the current economy.
Low engagement costs productivity and talent but is not as difficult to fix as it seems. Employees who get a good paycheck and little else might check out most of the time. By comparison, workers who see the company prioritize their contributions are more likely to invest.
Improve Retention
Although a weak job market might make employees stay in place, it does not stop them from dreaming of greener pastures. About three in five workers are in the process of leaving employment within the next year, according to Aon.
Companies looking to stem the tide must take these numbers seriously, and act. When employees say they want a new job, greater flexibility, career development or other benefits. Instead of finding this out at the exit interview, administrators can take proactive steps to provide those critical benefits. Workers who get more of what they want are less likely to look elsewhere.
Strengthen Employer Branding
Employer branding is a growing consideration for prospective hires. The trouble is that even some companies with solid branding strategies admit that they do not know how to turn it into stronger recruitment. Applicants tend to look up potential employers to see employee experiences. Poor or inconsistent branding strategies may lead top talent to apply elsewhere. By comparison, focus on personalizing the employee experience can improve employer branding.
In a world where employee engagement is low, connecting with workers’ values provides the solution. Companies often seek to offer benefits that suit their employees, but they do not always know how. Personalized benefits help to bridge the gap. With a customizable benefits program, employers can offer more of what employees want. Strong selection and execution for a personalized benefits program can increase engagement, retention and recruiting efforts.
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