“Our benefits are so expensive.”
How many times have you heard that one lately?
Employees are feeling the pain of escalating health care costs. Everyone is.
It’s becoming an all too common conversation in HR. Employees feel like they’re getting ripped off by ever-increasing costs of their benefits.
“Why won’t the company pay for more?”
The truth is most organizations are paying for more. Most employers can’t cover 100% of employee health costs but are paying a higher percentage of those costs.
Here’s the rub: employees don’t always see that. And some of the ones who do see it, don’t really care. They still feel the company should do more. As BambooHR points out, increased costs feels like a pay cut to employees, and can endanger employee engagement, productivity and retention.
Health care benefits were originally intended as a way to differentiate an employer from their competition while providing protection to employees. But it’s evolved into a complicated albatross. It's nearly impossible to keep up with healthcare costs, and eliminating the benefit is not an option.
So what can you do?
Communicate and Educate
Communication has always been a critical aspect of HR. Recruitment, assessing candidates, creating handbooks, employee onboarding, corporate policy creation and management, and so on.
But thorough communication has never been more important than it is right now.
If “branding” is the connection between a company and its customers, then HR is where branding occurs between a company and its employees.
Perhaps even more than management, effectively communicating the company’s investment for each benefit rests upon HR’s shoulders. And on top of that, you can also communicate the proactive steps you’re taking to offset some of the effects of escalating costs.
Consider these four strategies to protect your engagement and workplace stability in the wake of accelerating health benefits costs:
- Don’t Play the Blame Game - It’s important that you don’t allow the increase to turn into a festival of complaints. Don’t lay the blame on executives, or the government, or insurance companies, or anyone else. The rising cost of health insurance is due to many highly complicated factors that can’t be summarized by a trite phrase or politically correct soundbite. You can read more about the complexity of the issues in our article: 10 Reasons Why Health Benefits Costs Will Increase. And while employers are not usually responsible for rising benefit costs, playing the victim isn’t going to satisfy your employees, nor will it spur them to be more sympathetic. The better path to take is to…
- Be Transparent - It’s time to put those open door policies to use. Be upfront and honest when increases are on the horizon. Show - don’t just tell - employees how much the company is paying to stem the tide. And for those who really want to know, be prepared to show just how extensive you and your management have worked to keep prices down by sourcing vendors and looking at different plans.
- Expand Your Options - When premium increases are unavoidable, work with vendors to increase options, such as cafeteria plans or HSAs. If the costs, and not depth of coverage, is the primary issue, then help employees understand their options that will work within their budgets. It’s a great way to give some of the control back to your employees. And if possible, work with management to match some contributions to these plans.
- Consider Other Low Cost Perks - Many organizations add perks with little to no hard costs that hold tangible value with employees. It's an easy way to offset some of the bad juju caused by insurance rate hikes. Look at expanding vacation time, or creating flexible work options. Try offering fitness reimbursements or loosen up the dress code. Or provide employee discounts. The best employee discount programs stretch employees' paychecks further on purchases they make every day. And each time they save, they'll have you, their employer, to thank.
Benefits are High Stakes
Some studies have shown that people are willing to change jobs and take less salary for better benefits. Many older workers are staying in the workforce to retain these benefits. Employees who are satisfied with their benefits are four times more likely to be satisfied with their jobs.
There isn’t much you can do to control costs, but you do have the ability to manage the communication of those changes forced upon you, as well as the addition of other benefits that might help offset a loss of employee engagement. And protecting your most valuable resource - engaged employees - always takes priority.
You’ll never get rid of every “Why won’t the company pay more?” question.
But you can always have the best response ready.
For more in-depth open enrollment insights, check out our article: 2020 Open Enrollment: 10 Tips for HR Professionals.