How to build a competitive employee benefits package

A robust employee benefits package is a strategic necessity to attract and retain top talent at your organization.

Since employees have a diversity of needs, including physical, mental, social, financial, and others, it is vital to design your benefits package in line with what actually matters to employees. The task can be broken down into six steps:

1. Defining goals
2. Assessing employee needs
3. Setting a realistic budget
4. Working with HR staff and other stakeholders
5. Offering a variety of perks
6. Establishing metrics for monitoring utilization

‍

While it appears easy on the surface, creating the perfect employee benefits package is a bit more complex. Benefits management tools can make this less of an issue, but it’s still worthwhile to know what is involved in the process on a strategic level. So, let’s go over the key steps of designing flexible benefits plans in more detail.

Key takeaways

• Align the employee benefits package with the company's overall strategic objectives, ensuring a cohesive and supportive connection between organizational goals and the benefits offered.
• Craft benefits that cater to the diverse needs of employees, fostering an inclusive workplace culture. Prioritize variety to accommodate different lifestyles, ages, and family statuses.
• Establish a feedback loop and regularly evaluate the benefits package's effectiveness. Use data-driven insights to make informed adjustments, keeping the package competitive and aligned with evolving employee needs and industry standards.

What is a good employee benefits package?

A good employee benefits package offers a variety of perks that align with the diverse needs and preferences of employees. Let’s expand upon the steps we’ve outlined in the introduction:

1. Define goals: Clearly outline package goals that are aligned with company objectives.
2. Assess employee needs: Understand diverse employee needs through surveys or interviews.
3. Set a realistic budget: Establish a financial plan balancing competitiveness and sustainability.
4. Work with HR experts: Collaborate with HR for a legally compliant and competitive benefits structure.
5. Prioritize diversity: Design packages addressing a variety of employee needs.
6. Establish metrics: Develop measurable criteria to assess package success.

‍

So, what are the advantages of offering a flexible benefits plan at your organization? Let’s answer this question briefly.

A diverse and comprehensive benefits package will set your organization apart, making it more appealing to prospective employees in a competitive job market. Employees are also more likely to stay with an organization that demonstrates a commitment to their well-being and growth, reducing turnover and the associated recruitment and training costs.

Meeting the needs of existing employees by offering custom benefits plans also enhances overall job satisfaction, contributing to a positive workplace culture and reducing turnover. A well-aligned benefits package fosters a sense of value and belonging, increasing employee engagement and productivity.

6 steps to build a competitive employee benefits package

While the exact benefits vary from industry to industry, here are a few general rules that can help you understand the process of figuring out the right benefits package for your team.

1. Define the organization's goals with the package

Setting clear goals for the employee benefits package aligns it with overall business objectives. By defining specific objectives such as attracting top talent, improving employee satisfaction, and boosting productivity, the benefits package becomes a strategic tool. For example, if the goal is to enhance talent retention, the package may include perks contributing to a positive work environment, ultimately supporting the organization's long-term success.

2. Define the budget

Establishing a realistic budget is crucial for the financial health of the organization and the success of the benefits package. The budget should reflect the company's capacity to invest in employee well-being while remaining financially sustainable. By clearly defining financial boundaries, the organization ensures that the benefits offered are competitive and economically responsible, contributing to a balanced and effective package.

3. Design your program with experts

Involving HR professionals or benefits consultants is vital for creating a well-structured and legally compliant benefits package. These experts can navigate the complexities of benefit regulations, industry standards, and employee expectations. Their input ensures that the package is competitive, aligns with legal requirements, and meets the unique needs of the workforce. This collaboration enhances the overall quality and reliability of the benefits program.

4. Consider diversity

Encouraging the design of benefits packages that cater to the diverse needs of all employees fosters an inclusive workplace culture. Recognizing and addressing the varied needs of a diverse workforce contributes to a sense of belonging and equity. This approach attracts a wider range of talent and enhances employee satisfaction and engagement, creating a positive and supportive work environment.

Creating diverse benefits packages is easy with the help of Forma’s benefits management platform.  <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Talk to our experts</span> and discover how Forma can streamline and automate benefits provision at your organization.

5. Create metrics to evaluate your program's efficacy

It’s important to remember that creating your benefits package is not a one-time responsibility. It’s a continuous process where you have to analyze the efficacy of your package and gradually improve your policies. 

Establishing measurable criteria is essential for assessing the success and impact of the benefits package on employee satisfaction and company goals. Metrics could include employee retention rates, engagement surveys, and performance indicators. By regularly evaluating these metrics, the organization gains insights into the effectiveness of the benefits package, allowing for adjustments and improvements over time.

Evaluating your benefits program’s efficacy can be achieved using an employee management solution. Tools like Forma can help you assess how your employees are utilizing benefits, giving you valuable feedback to fine-tune your benefits plans further.

6. Keep a culture of always learning from feedback

Emphasizing the importance of continuous improvement based on employee feedback creates a responsive and adaptive benefits package. Regularly seeking and analyzing employee input helps identify evolving needs and preferences. A culture of continuous learning fosters agility in adjusting the benefits program to stay competitive and aligned with the workforce's expectations, contributing to ongoing employee satisfaction and loyalty.

The case for competitive employee benefits packages

We’ve highlighted the importance of building competitive employee benefits packages by examining their importance for attracting talent, aligning benefits with organization goals, and fostering a welcoming workplace environment. 

We can conclude that maintaining a balance of competitiveness and financial prudence, coupled with expert guidance and adaptability, ensures the package remains relevant and beneficial.

If you want to provide flexible benefits at scale while keeping complexity low and user experience high, consider <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">scheduling a consultation</span> with one of our experts and find a flexible benefits solution your employees deserve.

How to build a competitive employee benefits package – Frequently asked questions

Let’s attempt to answer a number of questions that often crop up in conversations about employee benefits packages.

What is normally included in a benefits package?

A comprehensive employee benefits package often includes health insurance (medical, dental, vision), retirement plans (401(k), pensions), paid time off (vacation, sick leave, holidays), FSAs/HSAs for pre-tax savings on medical/childcare expenses, life and disability insurance, wellness programs (Lifestyle Spending Accounts (LSAs), gym memberships), professional development (tuition, training), family-friendly benefits (parental leave, child care), Employee Assistance Programs (EAPs) for counseling, recognition and rewards (bonuses, recognition programs), legal and identity protection, flexible work arrangements (remote work, flexible schedules), financial education (budgeting, investing seminars), health and wellness initiatives (on-site wellness, mental well-being programs), transportation benefits (commuter benefits, parking assistance), and stock options/equity grants for sharing in company success.

How do you talk to employees about benefits?

To talk to employees about benefits, use clear, simple language and diverse communication methods like meetings, emails, and online portals. Foster an open dialogue, personalize messages, and ensure changes are clearly communicated. Make information accessible to all and maintain ongoing communication, not limited to enrollment periods. Appoint "benefits champions" for support and establish a feedback loop for continuous improvement.

How can companies measure the success of their benefits package?

To measure a benefits package's success, gather employee feedback through surveys, monitor benefit utilization rates, and compare turnover rates to gauge retention impact. Analyze employee engagement metrics, conduct focus groups, and perform a cost-benefit analysis to understand financial implications. Benchmark against industry standards, establish a continuous feedback loop, collect employee success stories, and evaluate recruitment metrics. These methods help assess the benefits' value to employees, their popularity, and the financial and competitive advantages they bring to the organization.