How to Develop Employee Benefits Strategies That Attract and Retain Talent

Creating a robust employee benefits strategy is essential for organizations aiming to attract top talent, boost employee engagement, and retain their workforce in today’s competitive market. 

A well-designed strategy goes beyond offering standard perks, addressing the diverse needs of employees while aligning with the company’s goals and values. From health insurance and retirement plans to innovative options like Lifestyle Spending Accounts, crafting an effective benefits program requires thoughtful planning, adaptability, and the right tools to balance employee satisfaction with organizational sustainability.

Here’s how you can create a comprehensive employee benefits strategy that works out in the favor of your company and its employees.

Key takeaways

• Employee benefits strategies align workforce needs with organizational goals, offering tailored benefits to attract, retain, and engage talent.
• Core benefits like health insurance, retirement plans, and PTO form the foundation of effective packages, with added benefits like tuition reimbursement or wellness programs enhancing appeal.
• Flexible, inclusive options, such as Lifestyle Spending Accounts, gender-affirming care, and teletherapy, address diverse workforce demographics and life stages.
• Benchmarking against competitors, regularly reviewing offerings, and gathering employee feedback ensure that your benefits remain competitive, relevant, and cost-effective.
• Clear, multi-channel communication is critical for maximizing employee engagement in your benefits program; use email, meetings, and resources like calculators or benefits counselors.
• Partnering with platforms like Forma can simplify benefits management, automate compliance, and empower employees to customize benefits, which boosts satisfaction and reduces HR’s administrative burden.

What is an employee benefits strategy?

An employee benefits strategy is a comprehensive plan for designing and managing employee benefits programs that support an organization's goals and values while meeting the diverse needs of its workforce. It involves aligning benefits offerings with business objectives, budgetary constraints, and employee preferences to create a competitive and engaging benefits package.

A well-designed benefits strategy takes into account factors such as:

• Workforce demographics: Understanding the age, life stages, and family structures of your employees helps tailor benefits to their specific needs.
• Industry benchmarks: Researching what benefits are commonly offered in your industry and by your competitors provides a baseline for creating a competitive package.
• Legal requirements: Ensuring compliance with federal, state, and local laws regarding mandatory benefits like health insurance, workers' compensation, and family leave.
• Cost considerations: Balancing the desire to offer attractive benefits with the financial sustainability of the organization, considering both short-term expenses and long-term ROI.
• Employee feedback: Gathering input from employees through surveys, focus groups, or other means to understand their priorities and preferences for benefits.

By thoughtfully considering these elements, you can develop a benefits strategy that supports employee well-being and productivity, attracts and retains top talent, and aligns with your overall business strategy.

Why is an employee benefits strategy important?

For employers, an effective employee benefits strategy is no longer optional — it’s essential for attracting, retaining, and engaging a talented workforce. Businesses that prioritize benefits see measurable advantages across multiple areas, from employee satisfaction to overall productivity.

Attract and retain top talent

Benefits play a pivotal role in an employee's decision to join and/or stay with a company. According to OneMedical, 69% of employees say they would leave their current job for another if offered better benefits. This statistic underscores the importance of a benefits strategy in remaining competitive as an employer of choice. Companies that offer modern, tailored, and meaningful benefits are better positioned to attract top-tier candidates and reduce turnover costs.

Enhance employee well-being

A well-rounded benefits program significantly impacts employee mental and physical health. TotalJobs reports that 40% of employees feel less stressed when their company offers comprehensive benefits. Lower stress levels translate to healthier, happier employees, which reduces absenteeism and boosts workplace morale. Benefits addressing health, financial wellness, and work-life balance contribute to creating a resilient and focused workforce.

Boost productivity and engagement

Engaged employees are the backbone of a successful business. Gallup research shows that companies rated highly in employee engagement are 14% more productive than those with lower engagement scores. Benefits play a critical role in driving this engagement by demonstrating that the organization values its employees’ contributions and well-being. Employees who feel supported are more motivated to perform at their best.

Strengthen company culture and loyalty

A thoughtful benefits strategy reflects a company’s values and commitment to its people. By addressing diverse employee needs, such as professional development, mental health, and financial security, businesses can foster a culture of trust and loyalty. Employees who feel appreciated are more likely to advocate for the company and contribute positively to its culture. For example, according to a survey of Canva employees, 87% of respondents said feeling appreciated positively impacts their motivation. 

Incorporating a strategic benefits program not only meets employee expectations but also drives long-term organizational success. Businesses that prioritize benefits create environments where employees thrive, productivity soars, and competitive advantages are secured.

Read more on how Instacart delivered competitive benefits for their employees with Lifestyle Spending Accounts.

How to create comprehensive employee benefits strategies

Developing successful employee benefits strategies involves several key steps to ensure your benefits align with your business goals, workforce needs, and budget. Here’s everything you need to know about creating an employee benefits strategy.

1. Assess your organization's goals and budget

As you embark on creating your employee benefits strategy, first align it with your overall business objectives. What are your organization's top priorities and goals? Whether it's attracting top talent, improving retention, or fostering a healthier, more engaged workforce, your benefits strategy should support these objectives.

Next, carefully consider your budget for employee benefits. While offering a robust benefits package can yield significant returns in terms of employee satisfaction and productivity, it's important to balance generosity with financial sustainability. Analyze your current benefits spend and project future costs based on factors like workforce growth and healthcare inflation.

As you allocate funds, think about the expected ROI of each benefit. Some offerings, like health insurance and retirement plans, are considered table stakes and essential for attracting and retaining employees. Others, like flexible work arrangements or wellness programs, may have a lower direct cost but can significantly impact employee engagement and productivity.

By aligning your benefits strategy with your organizational goals and carefully managing your budget, you lay the foundation for a sustainable, impactful benefits program that drives business success.

2. Understand your workforce demographics and needs

To create a benefits strategy that resonates with your employees, you need a deep understanding of their demographics, life stages, and preferences. Start by analyzing employee data such as age, gender, marital status, and family composition. This information can help you identify common needs and tailor your benefits offerings accordingly.

For example, if a significant portion of your workforce is nearing retirement age, you may want to emphasize financial planning services and retirement benefits. On the other hand, if many of your employees are young parents, childcare support and flexible work arrangements may be more valuable.

In addition to demographic data, gather direct input from your employees through surveys and focus groups. Ask them about their current benefits usage, satisfaction levels, and desired offerings. This qualitative feedback can provide valuable insights into what benefits matter most to your workforce.

As you analyze employee needs, consider how you can offer personalized benefits at scale. Customizable benefits programs like Lifestyle Spending Accounts allow you to provide a range of options that employees can tailor to their individual situations. For example, a flexible benefits allowance could be used for anything from fitness classes to student loan repayment, depending on the employee's priorities.

By taking a data-driven approach to understanding your workforce, you can design a benefits package that meets their diverse needs and demonstrates your commitment to their well-being. This, in turn, can boost employee satisfaction, engagement, and retention.

3. Benchmark Your benefits package against competitors

Understanding how your benefits stack up against others in your industry is a key step in crafting a competitive strategy. Research the latest benefits trends and common offerings among your peers. This will give you a baseline to assess your own package and identify areas for improvement.

Look beyond the basics of health insurance and retirement plans. Are competitors offering innovative perks like unlimited PTO, student loan repayment assistance, or fertility benefits? How do their benefit communications and technology platforms compare to yours?

As you review this information, remember that the goal is not to simply copy what others are doing. Your benefits strategy should be uniquely tailored to your organization's goals, culture, and workforce needs. Use benchmarking data as a starting point for ideas and inspiration, but always filter it through the lens of your specific context.

Also keep in mind that benefits are just one piece of the total rewards puzzle. Compensation, career development opportunities, and work-life balance all play a role in attracting and retaining talent. 

As you benchmark your benefits package, consider how it fits into your overall employee value proposition. Are you offering a cohesive, compelling set of rewards that sets you apart from competitors? Regularly reassessing your position in the market will help you stay ahead of the curve and adapt to changing employee expectations.

4. Design a flexible and inclusive benefits package

In 2024, a one-size-fits-all approach to employee benefits is no longer sufficient. A diverse, multigenerational workforce demands a benefits package that addresses a multitude unique needs and life stages. Designing a benefits program that balances foundational offerings with flexible options can significantly enhance employee satisfaction and retention. Here’s how to create a strategy that works for everyone.

Start with foundational benefits

Begin by offering core benefits that employees expect, such as comprehensive health insurance, retirement plans, and paid time off. These form the backbone of an employee benefits package and demonstrate your commitment to employee well-being. From there, consider enhancing the basics with voluntary add-ons like dental and vision plans, disability coverage, or tuition reimbursement to cater to a wider audience.

Expand with voluntary benefits

To address the specific needs of your workforce, explore voluntary benefits that reflect current trends and challenges. For instance, as mental health has risen in importance for employees and employers alike, organizations are incorporating teletherapy, mindfulness apps, and stress management resources into their benefits offerings. Similarly, caregiving benefits—such as backup childcare, elder care support, and paid family leave—are becoming increasingly vital in supporting employees juggling work and family responsibilities.

Incorporate diversity, equity, and inclusion (DEI)

An inclusive benefits package acknowledges and supports all employees, regardless of age, gender, sexual orientation, or family structure. Offering fertility coverage, gender-affirming care, or domestic partner benefits ensures equity across your workforce. This focus on DEI signals your commitment to creating a supportive and welcoming workplace for everyone.

Prioritize flexibility

Flexibility is a cornerstone of modern benefits design. Implement options like cafeteria-style plans or flexible spending accounts (FSAs) to give employees control over selecting benefits that align with their priorities. This approach caters to diverse needs while empowering employees with ownership over their benefits.

Balance costs and value

While expanding benefits can be costly, it’s essential to evaluate the value of each offering against budget constraints. Leverage group purchasing power, introduce cost-saving wellness initiatives, or explore partnerships with providers to manage expenses without compromising quality. A strategically balanced benefits package can drive engagement and reduce long-term costs, such as healthcare expenses or turnover rates.

By designing a flexible and inclusive benefits package, businesses can effectively support their workforce’s diverse needs while maintaining fiscal responsibility.

5. Communicate benefits effectively to drive engagement

Even the most well-designed benefits package will fall flat if employees don't understand how to engage with it. That's why a strategic, multi-channel communication plan is essential to driving benefits utilization and satisfaction.

Start by developing clear, concise messaging that highlights the value of your benefits offerings. Avoid jargon or complex language, and focus on how each benefit can make a tangible difference in employees' lives. Use storytelling and real-life examples to make the information relatable and memorable.

Next, deploy your messaging across multiple channels to reach employees where they are. This might include a mix of email, intranet posts, virtual or in-person meetings, and printed materials like posters or brochures. Consider segmenting your communications by demographic or job function to tailor the information to specific groups' needs and interests.

Timing is also key. Benefits communication should be a year-round effort, not just during annual enrollment. Provide regular updates and reminders to keep benefits top of mind, and align your messaging with relevant moments like onboarding, life events, or wellness challenges.

To help employees make informed decisions, offer decision-support tools like plan comparison charts, cost calculators, and educational videos. These resources should be easily accessible and designed with the end-user in mind. You can also consider offering one-on-one support through benefits counselors or online chat for employees who need additional guidance.

Finally, don't forget the power of leadership buy-in and peer influence. Encourage company leaders to champion your benefits offerings and share their own experiences. Provide managers with talking points and resources to have informed conversations with their teams. You might also consider enlisting a network of benefits ambassadors - employees who are passionate about your offerings and can help spread the word among their colleagues.

6. Regularly review and adjust your benefits strategy

Your employee benefits strategy is not a set-it-and-forget-it endeavor. The needs of your workforce and the competitive landscape are constantly evolving, so your benefits package must be able to adapt accordingly.

Regularly monitoring benefits usage, costs, and employee feedback will help you identify areas for improvement and ensure your offerings remain relevant and valuable to your employees. Analyze data from your benefits administration platform to track enrollment numbers, utilization rates, and cost trends. This information can help you pinpoint underutilized or overly expensive benefits that may need to be adjusted or replaced.

Employee feedback is also a crucial input for your benefits strategy. Conduct regular surveys and focus groups to gather insights on employee satisfaction, perceived value of benefits, and desired changes. Act on this feedback by making targeted adjustments to your offerings or communication strategies.

As you review your benefits strategy, stay attuned to broader workforce and business trends that may impact your offerings. For example, the COVID-19 pandemic accelerated the shift toward remote work and highlighted the importance of mental health support. In response to the pandemic, 70% of employers introduced new mental health benefits.

Similarly, as your business priorities shift or your organization expands, your benefits strategy may need to evolve to support new goals. For instance, if your organization is focusing on DEI initiatives, you may want to add benefits that cater to diverse populations, such as inclusive family-building benefits or culturally competent healthcare options.

Regularly benchmarking your benefits package against competitors can also help you stay ahead of the curve. As new benefits trends emerge, assess whether they align with your workforce needs and business goals. While you don't need to chase every fad, staying informed about industry practices can help you remain competitive in attracting and retaining top talent.

Finally, don't be afraid to make bold changes when necessary. If a particular benefit is no longer serving your employees or your bottom line, consider replacing it with something more impactful. 

7. Work with a reliable employee benefits management platform

Managing employee benefits can be a complex and resource-intensive process, especially as organizations strive to meet the diverse needs of a modern workforce. Partnering with a reliable employee benefits management platform can help simplify this process, reduce administrative overhead, and ensure that benefits programs are executed seamlessly.

A third-party administrator (TPA) provides tools to design, administer, and manage employee benefits more efficiently. These platforms often include features like streamlined claims processing, automated compliance management, and robust reporting capabilities. By centralizing benefits administration, companies can save time, improve accuracy, and enhance the overall employee experience.

Such platforms also offer scalability, making it easier to adapt benefits offerings as the company grows or as employee needs evolve. Many TPAs allow organizations to customize their benefits to align with company culture while maintaining cost control and compliance.

Additionally, these tools provide employees with user-friendly interfaces to access and manage their benefits, increasing engagement and satisfaction. By eliminating manual processes and providing data-driven insights, a flexible benefits platform empowers HR teams to focus on strategic initiatives, such as improving retention and fostering employee well-being.

Benefits of a forward-thinking employee benefits strategy

A forward-thinking employee benefits strategy goes beyond meeting current expectations; it anticipates future needs and aligns with long-term business goals. This proactive approach offers organizations a competitive edge by fostering resilience, innovation, and adaptability.

Adaptability to changing workforce dynamics

Workforce needs are constantly evolving, influenced by demographic shifts, technological advancements, and societal changes. A forward-thinking strategy ensures your benefits remain relevant, whether through flexible options like Lifestyle Spending Accounts or digital wellness tools. By staying ahead of trends, organizations can attract and retain talent in an ever-changing landscape.

Stronger employer branding

A benefits package that reflects innovation and care signals to prospective and current employees that your organization is invested in their future. Modern, inclusive benefits such as fertility assistance, gender-affirming care, or hybrid work support elevate your reputation as a progressive employer. This strengthens your brand identity and makes you a desirable workplace for top talent.

Improved cost efficiency over time

While innovative benefits may seem costly initially, they often lead to long-term savings. Wellness programs, for instance, can lower healthcare costs, and flexible benefits reduce turnover, saving recruitment and training expenses. A forward-thinking approach includes evaluating ROI, ensuring investments in benefits are both impactful and cost-effective.

Enhanced employee innovation and engagement

Employees supported by modern, adaptable benefits are more likely to thrive, leading to improved focus, creativity, and problem-solving skills. When employees feel their needs are met, they bring their best ideas to the table, driving innovation and growth for the company.

Adopting a forward-thinking strategy demonstrates that your organization is committed to growth, care, and resilience, creating a workplace where employees and the business can succeed together.

Partnering with Forma for benefits strategy success

Creating a modern, impactful employee benefits strategy is no small task, but the rewards are clear — greater engagement, stronger retention, and a happier, healthier workforce. However, achieving this vision requires the right tools and expertise to navigate complexities, manage administration, and meet evolving employee needs.

Forma's flexible benefits platform empowers organizations to craft comprehensive and personalized benefits programs that resonate with today's diverse workforce. The Forma platform streamlines benefits administration and enhances employee engagement through intuitive technology. 

What sets Forma apart is its ability to empower employees with choice in one cohesive experience. Whether it’s Lifestyle Spending Accounts, Health Reimbursement Arrangements, or Pre-tax Accounts, Forma offers personalized solutions that help employees select benefits that matter most to them. This flexibility not only boosts satisfaction but also drives higher engagement and loyalty.

For employers, Forma’s built-in compliance support, real-time analytics, and benchmarking tools offer valuable insights, ensuring that your benefits program remains competitive and aligned with organizational goals. Moreover, our global reach ensures that your workforce—whether local or international—has access to equitable and impactful benefits.

By partnering with Forma, companies unlock the potential to enhance employee well-being while cutting administrative tasks by up to 80%. 

Ready to reduce complexity, drive employee satisfaction, and create modern benefits programs that truly work? Schedule a demo with Forma today.