how to save money on employee benefits

^{5 Practical Ways to Save on Employee Benefit Costs}

1. Select a Broker. A good health insurance broker can be a tremendous asset to an employer that’s interested in saving money on the cost of benefits in the long ...
2. Invest in Technology and Systems. The availability of technology and systems to manage and maintain benefit information and employee records can also boost the productivity of your HR department.
3. Stay Compliant. Sometimes cost savings involves avoiding risky practices that could result in fines and penalties for an organization.
4. Engage Employees with Clear Communication. Let’s say an employer works with a great broker, and together they create a value-based health care plan, and the company invests in all ...
5. Move Towards Values-Based Health Care. Annual family premiums for employer-sponsored health insurance rose an average of 3 percent to $18,142 in 2016, a slight increase at a time when ...

Full Answer

How do you encourage employees to save large amounts?

Encourage employees to save large amounts of money when they can by making it more enticing to save. Once, the money is deposited into a 401K or other investment account, there’s usually a penalty for taking money out.

Why do you need an employee benefits strategy?

Having a strong employee benefits strategy ensures that your organization doesn’t overpay for coverage, and even helps you identify ways to save money on employee benefits. So where does an employer start when looking for ways to incorporate savings into its employee benefits strategy?

Should you encourage employees to take bonuses?

Encourage employees to save large amounts of money when they can by making it more enticing to save. Once, the money is deposited into a 401K or other investment account, there’s usually a penalty for taking money out. So, you don’t need to worry about employees taking the bonus and then withdrawing the money.

Why automate employee savings?

Automating savings helps ensure your employees are actually saving. 5 Extra perks: Employees are more likely to have what they need going into retirement if they continually increase the amount they save. The reality is—most contribution rates set by retirement and savings accounts are too low.

How do I cut employee benefits costs?

4 Ways To Reduce Employee Benefit CostsGroup Discount Rates On Premium Insurance Plans. If your business is shopping for new group health insurance plans, it might be time to consider partnering with a PEO. ... Cut Down Administrative Workload And Costs. ... Get Personalized Support. ... Determine The Best Renewal Rates.

How can an employee afford benefits?

7 inexpensive ways to afford employee benefitsSetting a budget. ... Splitting the cost with employees. ... Outsource HR to PEOs. ... Choose higher deductible plans. ... Offer non-financial benefits. ... Professional development. ... Well-being benefits and discounts.

What benefits do employees value most?

The most sought-after employee benefits are:Paid time off. ... Flexible hours. ... Paid family leave. ... Four-day work week. ... Free food in the office. ... Student loan assistance. ... Pet insurance/pet friendly offices. ... Fitness perks. Gyms and yoga studios have certainly struggled during the pandemic.More items...

How can employee benefits be improved?

Here are nine benefits to cover every aspect of employee well-being and increase the effectiveness of your workforce:Recognition. ... Cost-Free Training and Education. ... Flexible Schedules/Compressed Workweeks. ... Remote Work. ... Parental Leave. ... Paid Time Off for Volunteering. ... Pet-Friendly Offices. ... Gym Memberships/Fitness Classes.More items...

Should I offer employee benefits?

Providing benefits puts your compensation packages on par with some of your competitors and may help you surpass others. Improved wellness and productivity. Health insurance helps keep employees healthy so they can come to work (and don't have to take long periods of sick time).

How do you create a benefit strategy?

4 Steps to Enhancing Your Benefits Offerings to Meet the Needs of an Ever-changing WorkforceAssess the current needs and resources of their organization.Define staffing objectives based on business goals.Plan and design benefits strategies, including needs, assets and outcomes.Participate in budget forecasting.More items...•

What are the 4 major types of employee benefits?

There are four major types of employee benefits many employers offer: medical insurance, life insurance, disability insurance, and retirement plans. Below, we've loosely categorized these types of employee benefits and given a basic definition of each.

Are benefits more important than salary?

According to the Glassdoor survey, 80% of employees prefer additional benefits over a pay increase. Employees are starting to prioritize the benefits they would receive from a company over salary because employee benefits provide better experience and helps increase their job satisfaction.

What are the top 3 most sought after employee benefits?

What do workers want most from their employers in 2021? Above everything, they're looking for time away from work. Paid time off, flexibility/remote working options and paid family leave are the top non-insurance benefits employees want, according to a new survey of 1,500 U.S. workers by benefits provider Unum.

How do I create an employee benefits program?

Here are five primary factors that you must consider before designing the benefits plan:Identifying the objectives of the benefits. Before designing your employee benefits program, be clear about its objectives. ... Employee benefit expenses. ... Conducting a survey. ... Choosing the right benefits plan. ... Evaluate periodically.

How do I create an employee benefits package?

You Probably Need More Friends—Here's How To Make ThemAim To Provide Value To All Employees. ... Offer Employee Ownership Opportunities. ... Provide Remote Work Benefits. ... Add Inclusion And Equity Efforts. ... Consider Soft Benefits. ... Offer Free Healthcare. ... Let Employees Choose. ... Conduct A Cost/Benefit Analysis.

What are considered good benefits?

Better health, dental, and vision insurance topped the list, with 88% of respondents saying that they would give this benefit “some consideration” (34%) or “heavy consideration” (54%) when choosing a job.

401 (k) Benefits to Save Money AND Taxes

If your company offers a 401 (k), use it. Even if they don’t offer a company match; use it. (If they do offer a company match—even better.)

Health Insurance Options for Employees

If you’ve ever had to buy your own health insurance, you know that the steep cost of it is a very real thing, so having an employer-funded health program is a big way to save money in and of itself.

Flexible Spending Accounts & Dependent Care (FSA Benefits)

If medical expenses are a significant budget item for your family, check to see if your employer offers an FSA… specifically a dependent care FSA. This is a pre-tax benefit, which means the higher your tax bracket is, the more you can save with a plan like this.

Using a Health Savings Account (HSA) to Save for Retirement

Pairing with your health insurance benefits, HSAs are an incredible way to build wealth and/or lessen the blow of medical costs.

Stock Options for Growing Wealth

Clearly, stock options are one of the best employee benefits to save money and add wealth to your long-term financial plan… if you have them.

Life & Disability Insurance

A big reason many people want to build wealth is not to just retire, but to also provide for their family members if something bad happens to them.

Using Your Yearly Bonus to Increase Your Savings

Getting a bonus always feels fantastic… but blowing all your bonus money on a new boat may not be the best plan; especially if you’re trying to get ahead on your retirement savings.

Why is it important to have a strong employee benefits strategy?

Having a strong employee benefits strategy ensures that your organization doesn’t overpay for coverage, and even helps you identify ways to save money on employee benefits.

What is the benefit package?

A company’s benefits package is typically one of the biggest line items in its budget (second only to payroll), so any savings you can find can really affect your bottom line.

What percentage of respondents to this Collective Health poll said they are “often confused about all the benefits options available to them

It’s not just business owners who find benefits confusing. 60 percent of respondents to this Collective Health poll said they are “often confused about all the benefits options available to them.”

Can switching carriers save money?

Sure, switching to a less popular carrier might save your organization money upfront, but doing so may hurt your ability to attract and retain talent. On the other hand, you can’t sacrifice profitability in the name of offering employees every possible benefit plan.

Is benefits confusing?

On top of being costly, benefits can also be incredibly confusing. In fact , trying to put together a benefits package that meets your company’s budget and your employees’ needs without the help of a certified HR professional or an insurance expert can leave your head spinning.

What percentage of employees base their acceptance of a job offer in part on the benefits package?

Top companies know that a competitive benefits package is foundational to a strong talent management strategy. According to Unum’s Benefits Buyers Study, 78 percent of workers base their acceptance or rejection of a job offer in part on the benefits package. For current employees, nearly half say that they would stay with their employer ...

What are the incentives for large companies?

Among large firms with an incentive, the incentives include: lower premium contributions or cost sharing (52% of firms); requiring a completed biometric screening to be eligible for other wellness incentives (32% of firms); and cash, contributions to health-related savings accounts, or merchandise (56% of firms).

What are the options for value based health care?

There are a number of options that employers can take to implement value-based health care plans, including employee health screenings, wellness programs, disease management, and utilizing a high-performance network of providers.

How much does going paperless save?

In fact, by one estimate going paperless can save $500 per person per year in terms of paper, ink, toner, and printing costs [3]. Going paperless can also help an organization avoid losing critical documents and sensitive employee information, by securing that information in the cloud. Apart from the immediate savings on printing and ...

How does paperless HR help?

In fact, by one estimate going paperless can save $500 per person per year in terms of paper, ink, toner, and printing costs [3]. Going paperless can also help an organization avoid losing critical documents and sensitive employee information, by securing that information in the cloud.

Get New Quotes

Other cost saving employee benefits strategies are to shop around for coverage and get new quotes regularly. Your employee needs change over time, so reevaluate your rates to prevent over-insuring based on past numbers.

Outsource HR

Delegating the paperwork involved for all your offered benefits to a third party can free up your in-office staff for other tasks and save you money. You can reduce your administration costs and give your employees access to knowledgeable representatives and tools like online portals.

Educate Your Staff

Inform your employees. Educate them on what their Employee Benefits include, and which options would be the most cost-effective for them. Many of the people you have on staff may not understand the different plans for health care or other insurance.

Offer an HSA

Another way to improve upon your healthcare costs is to offer a health savings account. The money is available for a variety of needs, and any unused funds carry over to the following year. You cut your costs while giving your employees more control over their healthcare.

Re-evaluate Your Retirement Contributions

If you need a short-term solution during a financial pinch, you can temporarily reduce the amount of the employee’s retirement contribution that you match as the employer. Keep in mind that this can be an unpopular decision if you choose to implement it as a long-term solution.

How to encourage employees to save money?

Encourage employees to save large amounts of money when they can by making it more enticing to save. Once, the money is deposited into a 401K or other investment account, there’s usually a penalty for taking money out. So, you don’t need to worry about employees taking the bonus and then withdrawing the money.

Why is automating savings important?

Why it works: Saving is hard, and according to an article that appeared in the Harvard Business Review, if people aren’t thinking about saving, then they probably won’t save. Automating savings helps ensure your employees are actually saving. 5.

What are the concerns of employees?

According to the 2017 Employee Financial Wellness Survey, here are a few of the concerns employees have 3: 1 Not having enough saved to cover emergencies/unexpected expenses (about 50% of surveyed employees) 2 Not being able to meet monthly expenses (29% of surveyed employees) 3 Not being able to keep up with debts (17% of surveyed employees)

What is the logical approach to paying off debt?

When faced with debt, the logical approach is to begin paying off loans according to their interest rate, monthly payment amount, or some other figure—the idea being to pay less to the institutions you owe. However, debt is emotional. And, many people find it harder to be successful following a logical approach.

How many employees carry a balance on one or more credit cards?

In addition, 42% of employees found it hard to meet monthly household expenses, and nearly 60% of employees consistently carried a balance on one or more credit cards. 3. Unfortunately, the stress employees feel about their ability to save, manage their expenses, and retire not only affects them, but it also affects their employers.

Why do people not see bonuses?

Why it works: People don’t see bonuses and tax refunds the way they see their monthly paycheck. Consequently, they’re not as hesitant to direct the “extra” money to a savings account, and with an additional incentive to do so, the choice to save is even easier.

Do employers need to invest in saving?

Fortunately, there are a few excellent ways to help your employees be better at saving, and they don’t require a significant capital investment. In fact, they can be easily worked into your benefits program immediately.