How Organizations Manage Benefits for Employees

In North America a new challenge for employers that is becoming increasingly important is being able to manage the cost of benefits as well as being able to manage company goals with those benefits. Companies can utilize a various amount of benefits in order to maintain well performing employees. The definition of a company benefit is an indirect reward given to a single employee or team of them for being apart of the company. Benefits can include health insurance, retirement pensions, and paid vacations. Recently benefits costs have been skyrocketing which is why this is an important topic for Companies. Employers need to be able to control costs of benefits as well as maximize value, and there is a few ways to do this. There are also some specific features employers can use to manage benefits and one of these is communication in an organization and among their employees.

Types of Benefits/How they are managed

One of the most talked about types of benefit plans are health care benefits. There are some government mandated but a lot of them are at the discretion of the employers. Health care benefits costs have been increasing greatly in the past few years so it is critical for employers to be able to balance them so that they do not cost the company a great deal. It’s a fine line between spending too much on health care and not providing employees with enough. Companies have begun to try and manage these rising health care costs by using online Internet resources, which have come to be known as “e-health”. Another one of the most important benefit packages is retirement benefits. The percentage of the population that is of retired age has been increasing recently. More and more people are retiring which is making it important for employees to have solid retirement plans as they approach retirement. Companies manage their retirement benefits by coming up with competitive pension plans. Competitive pension plans are extremely attractive to employee especially considering the increasing amount of retirees.

Controlling Costs/Maximizing Value

There are many ways employers can approach controlling the costs of their benefits as well as maximizing their value. To start they should get the opinion of stakeholders and non-biased parties on their benefits package. Obtaining feedback from non-biased parties regarding current benefits packages should allow the employers to tweak the packages to help control costs. Employers must be able to identify the features of their benefits packages. Reviewing trends and demographics of their employees can help tailor benefits to their employees. They should look for groups of employees with special needs, which can be employees with large families or different health conditions. Developing benefits plans that fit into these employees special needs can help control the cost as well as hopefully maximize their value.

Importance of communication

In current organizations most employees are not aware of the costs and budgets of the benefits that they receive from their company. There is a large spectrum between companies that can communicate their benefits effectively and those who cannot. An employer’s ability to communicate benefits to their employees and how satisfied employees are with those benefits are directly related. Most employees have trouble understanding the intricacies of their health benefits, and if they do not understand them fully it can cause unhappiness among employees. In order to correct this employers and HR executives need to develop different systems of communication for their employee benefit packages. Some examples of different types of communication systems can include weekly newsletters, emails and electronic notifications, presentations and company meetings. It is key for employers to get across as much information about the benefit plans to the employees as possible. This allows employees to understand what they are truly receiving. One way that employers and HR executives manage benefits is by communicating benefits by stating their dollar amount. This allows the benefits to be put into perspective by the employees receiving them. These are called benefit statements and are becoming very popular by use of the Internet.   

Conclusion

In organizations there are many types of benefits that are provided to their employees. Some of them include retirement packages, such as pension plans, as well as health care benefits. They must be managed quite carefully so as to avoid employee dissatisfaction. In the recent years the costs of company benefit plans have been skyrocketing. It is important for employers to ask for feedback on benefit plans and try and tailor benefit plans to employee’s special needs. This would allow them to control the costs as well as hopefully maximize the value of the benefits. One of the easiest ways to manage employee benefits is by effective communication. Effective communication includes employers being able to facilitate presentations and employee meetings to make them aware of the intricacies of the benefits they are receiving.

References

Jane Kwon (2013). Employee Benefits in a Total Rewards Framework. [ONLINE] Available at: http://search.proquest.com/docview/1287031458. [Last Accessed March 31/2013].

Mathis Jackson, (2011). Human Resource Management. 13th ed. Ohio: South-Western Cengage Learning.

Jack Moore (1999). Managing employee benefit plans. [ONLINE] Available at: http://search.proquest.com/docview/225960842. [Last Accessed March 31/2013].

Karen Gustin (2005). Managing employee benefits. [ONLINE] Available at: http://search.proquest.com/docview/231233514. [Last Accessed March 31/2013].

Len Strazewski (2002). Managing employee benefits online. [ONLINE] Available at: http://search.proquest.com/docview/200334713. [Last Accessed March 31/2013].