Personalizing Employee Benefits: A Strategy for Retaining Employees
Studies show that employees are more likely to stay with their employer if they feel their needs are being met. With retention hinging on employers' ability to dial in to employees' needs, it's not surprising that personalized benefits are gaining eminence. According to MetLife's 15th Annual U.S. Employee Benefit Trends Study, employees want personalized benefits, and employers can score big by offering them, especially those relating to health and wellness.
Further, Talent Economy, a human capital media publication, states that personalizing benefits is important, particularly among businesses that provide a wide range of benefits. The reasoning behind this thinking is that it can be difficult for employees to absorb all the choices available to them. When customized, the benefits become more palatable and easier to analyze.
Also notable is a study by the Society for Human Resource Management, which found that consumers today don't want a one-size-fits-all approach; they prefer benefits that acknowledge their individual and family needs.
The reason for this big shift? All signs point to diversity.
Diversity: The game changer
With the U.S. workforce becoming more diverse than ever, the need for personalized benefits has grown by leaps and bounds. This seismic shift has been caused by:
- The many generations that now make up the workforce.
- The changing definition of family, which now extends to same-sex couples and single parents.
- Differences in education and compensation; those who earn less believe that benefits and job satisfaction go hand in hand.
- The growing gig economy; more employers are using benefits to attract temporary, part-time and gig workers.
Ideas for customization
Personalizing benefits is about understanding your employees' preferences and needs and giving them the tools to make the right choices.
For example, you might provide technology that notifies employees when open enrollment starts. During the enrollment period, employees can access the system from home on their mobile device, compare the different health care plans available to them, and estimate costs. If they select a High Deductible Health Plan (HDHP), the system can then inform them of their eligibility for a Health Savings Account (HSA), which can be used to pay for health care expenses not covered by the HDHP.
In another example, an employee new to the workforce logs in to the system to choose her benefits. However, she has no idea what type of coverage she needs. To determine her preferences and needs, the system "interviews" her by asking various questions. Based on her answers, the system recommends a benefits package.
Other ideas include cost-saving tips and customized plans that provide suggestions on improving health based on health status.
For small employers, personalizing benefits may seem financially impossible. But it doesn't have to be. Companies with few employees can take a simpler approach — such as engaging in direct communication year-round to help employees learn how to use their specific benefit plans.