YOU BUDGET FOR PAPERCLIPS… WHY NOT EMPLOYEE BENEFITS?
You’ll want to read this if payroll and employee benefits aren’t two of the top five items in your operating budget.
I see carefully crafted operating budgets all the time. It’s generally quite easy to find a line item for office supplies. But nothing, not even on page two, for employee benefits. Why?
I started asking employers why they don’t budget for benefits. The responses have been remarkably the same, “Because we just have to have them.”
Ok, let me get this straight. Because you drive, and just have to put gas in your car, does that mean you don’t budget for it? Just wondering.
No question, employee benefits raise the employer frustration flag quicker than almost any HR topic. Most employers feel like it’s a no-win situation. Employees still won’t be happy, no matter how much is spent on benefits. Sadly, in my experience, you are probably right.
Enough of the sob story, though. There are things you can do and ways you can make this better.
How to Budget for Employee Benefits
Employee benefits are a bull-by-the-horns kind of topic. It is best to take an active role and shift how you look at your benefits. This starts with expectation setting and a budget. This process helps prepare both yourself and employees for what “may” happen year after year.
It’s probably safe to say you are like most employers and dread open enrollment. Stop dreading it and take charge. During your benefit renewal meeting, don’t sit across the table from your broker with your eyes closed. When that piece of paper slides across the table with some scary renewal percentage, don’t be shocked. Be prepared.
Prepare for Open Enrollment
In order to prepare, it helps to understand a few things:
- What is your budget for employee benefits? If you don’t have one, get one.
- Work with your broker to get as much information about the usage on your plan as possible. Based on the size of your plan, this may be difficult but worth a conversation.
- Look at your plan design and have your broker benchmark it against the industry standard. You may have an incredibly rich plan design, and a few tweaks might save tens of thousands.
- Look at your cost sharing. How much do you pay versus your employees? Again, have your broker benchmark this against industry standard to see if you are over contributing.
This information will help you make a smart plan and cost sharing decisions. Don’t let the benefits drive your discussions. You drive the discussions about your benefits. Just a little information can go a long way when it comes to helping employees understand premium increases each year.