The Cost of Employee Benefits to Employers
Building employee benefits packages requires several considerations for employers. To offer the best benefits to employees, it’s essential to gather information around what competitors are offering, the size, location, and health of your workforce, and what your employees want in their plans. With insights from your research and findings from benchmarking data, employee benefits packages can be strategically built to suit the needs of employees without breaking the bank.
What Affects the Cost of an Employee Benefits Program?
Many factors can contribute to the cost of providing employee benefits, however, the two most impactful to consider are the size of your organization and the scope of benefits that you’d like to offer. The number of employees taking advantage of the benefits you offer is essential when understanding cost, and knowing exactly how much coverage you’ll be offering will determine the cost of coverage for each employee.
What Are Some of the Most Common Benefits Offered?
Researching the benefits offered by competition is a great way to begin mapping out what you’d like to offer employees. A few of the most common benefits include:
- Health Insurance: This tends to be the most expensive for both employers and employees to pay for. In 2021, KFF found that to cover a family the average was over $16,000 and for an individual employee it was over $6,000. Premiums and deductibles can also have considerable costs, and with every passing year health insurance costs are projected to increase.
- Life Insurance: Life insurance plans replace the income brought into a family by an employee should they pass away. These plans are typically more inexpensive, costing a few hundred dollars annually to employers.
- Voluntary Benefits: These benefits can be a range of things depending on what your employees value, some examples include: financial assistance for additional schooling or certifications, paid insurance premiums, flexible hours, pet insurance, or mental health benefits. Employers may choose to cater these towards what current employees would like and also what prospective employees may see as valuable.
Choosing which benefits to offer should be relative to what type of talent you’d like to attract and what will increase retention within your workforce for both new and existing employees.
Keeping Employee Benefits Programs Costs Down
Soliciting employee feedback is the first and foremost step to giving employees the coverage they want without paying for expensive perks they may not use. After receiving this information, your benefits consultant can help develop plans based around employee interests. They can also help determine what percent of cost to share with employees.
Once a strategy is agreed upon and policies are written, it’s time to take a look at utilization and best practices to help keep costs down. Educating employees on their plans can lead to savings for both employees and employers alike. Additionally, providing wellness programs and covering costs of screenings and vaccinations as premeditated measures are great ways to keep your employees healthy and health insurance costs low.
Ready to talk more about restructuring your benefits plan and cutting down costs? At Exude, we have experts ready to help with strategic benefits consulting to enhance your employee benefits offering. Get in touch with one of our experts below to get started!