Chief Financial Officers (CFOs) are now becoming more and more engaged in the HR function, and ensuring that each and every aspect of HR is reviewed carefully and regularly is an important step forward for any organization.
Data from a Robert Half survey shows that HR is the top area where CFOs have expanded their reach over the last three years (39%), largely because CFO involvement in HR allows them to address staffing challenges from a financial perspective.
As CFOs continue to put more time into HR, it’s first crucial to understand the major areas in which CFOs should begin their assessments regarding whether an organization has a sound HR operating structure in place. In this post we will overview the main areas of focus a CFO should assess to ensure a healthy HR function.
HR Areas of Focus for CFO Assessment
Company Culture Audit Company culture is one of the most important aspects of maintaining a competitive modern workplace. In a study conducted by RippleMatch, company culture was the leading reason that a candidate decided to accept a job or not, with almost three quarters of respondents (who were 700-plus recent graduates) reporting that this consideration was the most important. When it comes to auditing your organization’s cultural health, measuring employee satisfaction is key.
Employee Satisfaction In HR’s current “war for talent,” with the unemployment rate the lowest it’s been in decades, it’s more important than ever to create a solid recruitment strategy that’s complemented by employee satisfaction as a serious driving force. CFOs looking to assess the current health of the HR department need to put time into assessing employee satisfaction, whether by: • Implementing regular employee satisfaction surveys • Inviting employees to join company discussions or meetings • Gauging interest in benefits like company events, outings, professional development opportunities, and work-life balance benefits • Ensuring a sound manager-employee review system is in place that happens at least once or twice per year
Addressing Critical Culture Issue Areas Another aspect of a company culture audit is identifying the most critical issue areas. To really have a complete, successful HR program, any company culture problems must be proactively addressed. Critical issues often include that the company has no clear values that employees can recognize and thus cling to; that leadership isn’t accessible or transparent; or that there are no long-term goals in place.
If these three common issues can be recognized and addressed by CFOs, company culture will be on the path to being revamped and competitive.
Compensation and Rewards
Of course, another important aspect of HR is compensation and benefits. And part of staying relevant is ensuring that you’re offering competitive salaries and benefits packages to employees.
Benchmarking Salaries Especially with top-level talent and executives, it can be challenging to know if an employee will be tempted by a better offer within a competing organization. One way to ensure you remain competitive and retain this top talent is to benchmark, which means assessing your own compensation structure and comparing it to other companies within your industry. Then, salaries can be updated if necessary (or, benefits can be improved to balance out any salary discrepancies).
Bonuses and Incentives It’s common knowledge that employee satisfaction increases when employee contributions are overtly recognized and celebrated. This is why bonuses or performance-based incentives can be impactful in HR retention strategies. CFOs should try implementing an incentive that’s based on an employee’s performance, giving them something to work towards and thus improving motivation. Year-end bonuses can also help employees feel recognized and satisfied with their jobs. While a simple “thank you” may work at times to encourage and inspire, HR and CFOs should work together to create an incentive program that the organization can afford and which motivates employees.
Benefits Package Similar to compensation benchmarking, CFOs should do their research to ensure that the company’s benefits package is competitive and updated regularly. This means knowing what modern top talent is looking for. According to Harvard Business Review survey data, the most desirable employee benefits are: • Health, dental, and vision insurance • Flexible hours • Vacation time/paid time off • Work-from home options • Unlimited vacation • Student loan assistance • Tuition assistance • Paid parental leave
One of a business’ largest expenses is the annual dollar amount spent on employee benefits. CFOs should make sure that benefits dollars and being invested wisely into crafting a thoughtful, impactful benefits package.
Technology and Data
Another big consideration for HR departments and CFOs alike is data. With the rise of automation and machine learning, businesses can now streamline processes and analyze large amounts of data to make future plans and projections. And these changes apply to HR efforts, such recruitment and retention, which now depend on sophisticated data and a method in place to analyze it, such as a useable online dashboard.
According to a report from KPMG, 92% of strategic HR functions now see automation as having a significant impact on the HR function, and 66% of organizations are putting a greater focus on the automation conversation within their company.
However, actual strategies are still lacking in HR, KPMG data also shows. While around two thirds of HR executives recently reported to believe that HR is undergoing a big digital transformation, only 40% of these leaders said they have a plan in place at either the enterprise or HR level. So, putting these considerations at the top of the priority list could give your business a significant competitive edge.
Assessing the Existing Technology Stack First, CFOs should start by assessing their HR department’s current technology utilization. Is there a method in place to not only gather data, but to analyze it and incorporate it into a long-term strategy? What databases and dashboards are being used, and are they successful? And of course, cost is an important factor in implementing new technologies, so CFOs are encouraged to always consider technology ROI in terms of process improvement.
How to Find the Right HR tech for Your Business Every organization has different needs and trends, so it’s important for you to help your HR department figure out which technologies will best meet your business’ needs. Some important considerations to keep in mind include: • How automation will impact the need for long-term HR staff • Training for HR staff to be able to properly use technology to handle and analyze data • Implementation processes and timelines for new technology
Key Data Metrics to Track Over Time So what metrics should your HR department care about most? Here are some of the top data metrics for HR to track and use for future planning: • Cost-benefit analysis: tracking the benefits of a program weighed against the cost (such as a benefits package) • Revenue per employee/productivity: tracking the total amount of company revenue divided by the number of employees so that efficiency and productivity can be measured via human capital • Recruitment: tracking how long it takes to fill a position, and how much it costs • Turnover: tracking how long employees stay at the company and which departments see the highest turnover, in addition to the cost of turnover • Retention: tracking the company’s actual ability to retain key talent
Hiring and Retention
Next, CFOs should analyze hiring and retention strategies, one of the most important parts of the HR function.
Recruitment Tactics How is the HR department currently approaching recruitment? This includes considerations like where job advertisements are being posted, whether recruiters are engaged with platforms like LinkedIn or other social media outlets, and whether competitors’ job posts are being assessed and incorporated into the company’s own job ad approach.
Depending on your industry, recruiters should be involved in researching and reaching out to top talent who they find would be great candidates. This could be through networking events or via online platforms.
Hiring Processes It’s also important to consider the efficiency and effectiveness of hiring procedures, such as: • How resumes or cover letters are received (email, online application, etc.) • How long it takes HR to respond • How the interview process works (i.e., phone interview followed by two in-person interviews) • How job offers are relayed (email, formal letter)
Onboarding and Training A good onboarding strategy can make or break recruitment efforts and retention strategies. It’s important to set up a welcoming, informative program that educates new hires and aims to integrate them into company culture by involving multiple departments and individuals. These early connections are important for any new hire to feel like they made the right decision in accepting a job.
Just as important is training and development that new hires will need, so each department should have its own system in place in addition to the overall HR employee training program. These are important considerations: 69% of employees have a higher chance of sticking with a company for three years if they have a great onboarding experience.
Identifying and Addressing Turnover Issues One of the biggest threats for modern businesses is high turnover. The Center for American Progress says that on average, the cost of turnover is 22% of an employee’s annual salary.
The first step in addressing turnover problems is figuring out when employees leave—if it’s near the start of their tenure at the company, greater focus is needed for onboarding and training, perhaps. If it’s later in the employee’s tenure, the reasons could be related to company culture, benefits, compensation, management, or room for growth within the company. All of these considerations deserve a detailed plan from your HR function.
CFOs play a major role in HR compliance, since penalties or legal issues could be involved if required policies and procedures aren’t followed. Here are the top areas for CFOs to review regarding compliance.
Employee Handbook Every HR department should create an employee handbook that lists all policies and procedures. This levels the playing field so that employees don’t think one worker is getting special treatment. The handbook should be updated as the industry changes or as new laws and regulations are put into effect, and it should include things like benefits, leave policies, dress code, flexible working opportunities, tuition reimbursement, and more.
Employee Files CFOs should take a look at how employee files are currently handled. There are many records that need to be kept confidential, so it’s crucial to ensure that there is a security system in place for these sensitive records.
Benefits Compliance Review There are important acts and laws for every HR professional and CFO to understand and ensure compliance with. Some of the most important include: • Family and Medical Leave Act (FMLA): related to required time off for new parents, health issues, or family issues • Fair Labor Standards Act: overtime regulations, minimum wage, etc. • Disability coverage regulations for employees • COBRA: required continued insurance offering after an employee leaves the company
An important aspect of the HR function is ensuring all of these important regulations and policies are followed and applicable requirements are met.
Strategic Alignment Evaluation
Because HR is such a crucial part of company operations, it’s important that the department is aligned with other areas across the organization. HR is often the first point of contact for job candidates, so HR professionals have a unique obligation to reflect company values as well as the positives of working at your business.
Aligning Finance, HR, and Company Goals Part of the CFO’s involvement in HR is to ensure that practices are aligned with finance and overall company goals. Some of the HR metrics to track that were described earlier will apply here, since they’ll be important in determining cost-benefit ratio, the cost of recruitment/new hires, and other HR finance considerations.
Company goals and values should also align with HR for the reasons previously mentioned: HR is often the face of the company during recruitment and hiring, so it’s crucial that these professionals reflect the organization’s mission, vision, and goals. Leadership from each of these areas within the company should meet regularly and discuss any issues so that key team members are aligned across the board.
Long-Term Workforce Planning Many of the considerations already discussed are necessary for efficient workforce planning. This means integrating a company’s goals and mission while ensuring that the organization has the human capital it needs to succeed. HR professionals, in conjunction with the CFO, need to evaluate both current and future needs in personnel and departmental structure, and figure out how to make these efforts cost-effective.
Another consideration here is the professional development and training that will keep personnel effective within the given industry. As mentioned, in regards to technology, systems and processes are constantly changing, and companies have to ensure that they keep up by educating employees, ensuring they can operate with the most cost-effective and efficient tools in place.
In today’s workforce, CFOs are tasked with ensuring that HR not only functions as it should on the appropriate legal and financial level, but also that it is making successful efforts to integrate technology and implement high-impact recruiting and retention strategies.
When assessing the current state of an HR department, CFOs should remember to look at the following key areas:
Compensation, Benefits, and Incentives
Technology and Data Strategy
Hiring, Onboarding, and Retention
Strategic Alignment and Workforce Planning
Only after reviewing these key aspects of HR can CFOs better make decisions about personnel, policies and procedures, cost considerations, and departmental structure that will drive the business forward.
No organization can survive, thrive, or grow without great talent. With that said, unemployment is at its lowest in nearly 40 years, which means difference-making employees have greater power and more opportunities to pick their landing spot of choice than ever before.
In this post, we’ll explore some of the highlights and main ideas of the webinar, including:
• The role of employer branding in talent acquisition
• How to create winning recruiting and hiring practices
• How to use the interview process to find the best talent
Mindful Employer Branding Bringing great talent into the fold and retaining them over time requires having a business that feels inviting, functional, positive, and drama-free. In the past, employees were willing to put up with more due to the perception that there were a limited number of “good jobs” at strong companies, but in today’s environment, hiring and holding onto business-driving team members requires more than the offer of a “good job.”
Now, businesses of all sizes and industries must actively and thoughtfully brand themselves in order to create an identity that is attractive to top talent and invites them to buy into corporate culture. In fact, everything should flow backwards from the brand.
Understanding Your Existing Standing and Perception No business can leverage their workplace culture – even if it’s a great one – if they don’t fully understand it themselves. Small and medium-sized companies often grow so quickly that mindfulness of company culture gets lost in the shuffle as operations scale up. On the other hand, for large enterprises, there’s often so much distance between leadership and rank-and-file employees that a culture gap – or, more precisely, a gap in understanding of culture – can easily form.
Before any business can create a talent-centric culture initiative, they must form a rich understand of both their existing internal culture and the perception of the organization within the talent marketplace. Tools like employee surveys and Glassdoor can be incredibly useful in informing this work.
Once that understanding of existing culture and perception are in place, organizations can begin the work of identifying culture targets and planning initiatives to get them there.
Articulating a Great Culture Branding in a way that speaks to top talent requires identifying what is special or unique about an organization and building out from there. In order to achieve that, each organization must articulate what they value from both the business and humanistic sides of workplace culture and consider what’s really special about who they are, what they do, where they do it, and how they do it.
The better an organization can articulate why employment is a positive and valuable overall experience that will improve each employee’s life and not just a “job,” the better they are able to attract great thinkers and workers without needing to jack up compensation. Once those value-based pillars are in place, the next step is to plan how the organization will staff, train, and develop to foster, reinforce, and maintain that culture.
One important note about establishing and building an effective culture: it requires patience. As soon as you and your core leadership team are sick to death of discussing culture goals and articulating what your organization is all about, that information is probably just starting to sink in at the individual worker level. Once you have buy-in at that level, however, promoting your thriving culture becomes much easier.
Web Presence The internet provides businesses with a powerful, mostly free space to spread the word about their brand identities and individual corporate cultures. A strong, positive web presence helps an organization seem modern with a unique personality and relatable set of values. A weak or negative web presence, on the other hand, will prevent many potential superstars from even applying to work at a company.
For those reasons, digital marketing should be a top priority for organizations of all sizes and ages, not just for lead attraction but also for talent attraction. When an organization’s footprint on the web feels responsive, looks professional, and contains well-planned and well-written content, it gives job seekers an increased sense of confidence and makes a workplace seem future-facing and attractive.
Remember, there are more top jobs out there than top talent, so there’s no incentive for any of those professionals to even consider working in an environment where they don’t have great confidence they will succeed, grow, and build a happier life.
Let’s take a closer look at two of the biggest and most crucial online platforms for businesses trying to establish a strong culture and brand identity: • Glassdoor – Thanks to social proof, if a business has a great team and a thriving culture, Glassdoor can be one of their greatest hiring tools. If the ratings are low, however, it can become a struggle to even create a viable applicant pool for an opening. The more authentic, positive reviews a business can build on Glassdoor, the more attractive they seem to outsiders and prospective applicants.
• LinkedIn – LinkedIn is the ideal social media platform for organizations looking to share their company culture with the world and invite others to join the conversation. Using LinkedIn, business entities and their individual leaders can increase brand awareness, build thought leadership, and share company successes – both business and humanistic – with a wide community of industry professionals. A strong, active LinkedIn presence helps an organization present their values and meaningful work side by side, creating a brand identity that attracts great talent.
Recruiting and Hiring to Win Once businesses have established a talent-centric culture and leveraged online platforms to start circulating that message throughout the industry in a way that attracts talent, they are faced with an equally important next step: actually hiring the right people.
Here are a few guidelines that organizations can use to create an effective recruitment and hiring strategy to ensure they land the right talent.
Have a Plan Building a great team in the office is just like building one on the athletic field: it’s a process that takes multiple years, requires several key acquisitions, and must be dictated by an over-arching plan or strategy. Hiring employees on a purely ad hoc basis is a recipe for disaster, and signing on new hires without an eye toward cultural fit, values, or long-term potential can be destructive as well.
Each organization can empower themselves and simplify their hiring processes by articulating an organizational philosophy on and approach to hiring. While this seems like a huge responsibility up front, it’s the most direct way to measure twice and cut once.
“Always Be Hiring” Growing organizations frequently make the classic mistake of building exactly the team they need in the moment. While that sounds like an ideal situation, it’s actually a liability because growing organizations must be able to grow, and with a goldilocks-sized staff, that potential for instant growth is limited, creating the possibility of backslide.
Organizations who don’t want to miss out on great talent are always hiring because that superstar difference-maker might not be searching for a job the same week the office has an explicit need. By always remaining open-minded about the possibility of bringing on the right new team member, businesses maintain their ability to grow and leave the door open to for the right voice to come on board at an unexpected moment.
One of the worst things a business can do to itself is to get put in a position where a hire must be made under duress or an unexpected exit sends work grinding to a halt. When organizations are proactive rather than reactive, however, they protect productivity and provide themselves with more opportunities to connect with great talent.
Fill the Pipeline Of course, the “Always be hiring” philosophy requires a steady influx of talent and C.V.s, but embracing that constant flow of talent opportunities is a good thing. When a business is constantly talking about new talent and staying in touch with the talent marketplace, it builds organizational confidence that the business isn’t over-reliant on current team members and keeps everybody up to date on talent trends.
One way organizations can keep themselves plugged into the talent market is to set aside one day each month to interview attention-grabbing or potentially intriguing candidates, regardless of specific “needs.” This practice keeps businesses open to great potential opportunities and invites both applicants and leadership to discuss goals, culture, and market trends in a way that helps both sides gauge the potential value of a working relationship.
Never Settle! Talent acquisition isn’t called “worker acquisition” because, in a business setting, it’s much more important to hire the right person than it is to put a body in the chair. In order to win with top talent, organizations must accept nothing less. Nobody should ever be hired just because a position needs to be filled, and no prospective employee who isn’t a strong fit in terms of culture or skill should ever be hired just to end the process.
Conclusion/Takeaways: Attracting and hiring great talent is more complex than ever, but with a clear approach in mind, the use of the right marketing tools, and a strong understanding of itself, an organization of any size can build a brand, culture, and hiring process that ensure they wind up with the best talent possible.
Remember: • Branding is essential to attracting the best talent o To create a successful brand, organizations must articulate, achieve, and maintain a strong, positive workplace culture -That culture should reflect what’s unique, exciting, and humanistic about the work at hand o Web presence (particularly on LinkedIn and Glassdoor) is essential to establishing that brand awareness in the talent market • Recruiting and hiring should be guided by an over-arching plan and approach but also remain flexible so businesses never miss out on great talent in an unexpected moment or find themselves talent deficient after a sudden exit
These are just a few of the ideas explored in Launchways’ webinar “How to Win the War for Talent: Actionable Strategies to Attract and Retain Top Talent at Your Business.” To gain more incredible insight from our roundtable of talent acquisition experts, watch the free recording of the webinar now!
Choosing a new health insurance broker to manage your employee benefits can be an overwhelming task. Health insurance and employee benefits are a large part of your payroll expenses, so picking your broker is a high-stakes affair. The quality of your new insurance broker can make the difference between having an engaged team of high-quality talent that fuels your growth or watching your best team members leave for employers who provide benefits which meet their needs.
In this article, we’ll take a comprehensive look at the process of choosing a new health insurance broker, including:
• Why your health insurance broker matters
• How to start the process to find a new health insurance broker
• What to look for in a new employee benefits broker
• How to tell if an insurance broker can really deliver value to your business
Why Your Health Insurance Broker Matters
Why is it so important to be strategic when it comes time to choose a new health insurance broker? Employee benefits, particularly healthcare, are enormously powerful tools in your arsenal to attract, retain, and engage the talent that you need to grow and sustain your business. Companies of all sizes are struggling to build and maintain effective teams as the job market encourages employees to switch jobs more frequently and Millennials make up a greater share of the workforce. And the challenge is greater for small-to-medium sized businesses (SMBs), who are at a disadvantage compared to their larger counterparts with deeper pockets.
It used to be that a good salary and solid benefits were enough to win an employee’s loyalty for years or even decades. That started changing in 2008 as the job market became less stable and accelerated as the economy recovered and more Millennials entered the workforce. Not only has it become a job seeker market, but what employees are seeking from their jobs has changed. Work and salary are no longer ends in themselves but need to be means to something greater for employees to stick around. Many, particularly younger employees want personal development and meaningful work. As a result, people are staying in their jobs for 2-3 year stints before moving onto the next position that offers them an opportunity for growth and fulfillment. They want workplaces where they feel supported and cared for, otherwise they will leave for somewhere that provides that for them.
And employee benefits are a vital part of any strategy to meet those needs to attract and retain talent. An Aflac survey found that most employees would change jobs for a lower salary but better employment benefits. Unsurprisingly, the same survey found that 80% of respondents believed that their employee benefits plan influences their engagement in their jobs. Competitive benefits are a necessary component for an effective strategy to build and engage your team so that you can grow your company. But how can small businesses who lack their competitors’ resources offer benefits that will make potential hires choose to work for them or stop current employees from jumping ship?
The answer is to develop a careful employee benefits strategy which minimizes costs while maximizing the impact on employees. And to craft and implement an effective strategy, small businesses need a dedicated benefits broker who understands their unique needs and is willing to be deeply involved in their business. Growing companies cannot afford to pay employee benefits broker commissions to major brokers in exchange for out-of-the-box solutions. They need customized solutions and a small-business approach.
So how do you find the insurance broker who will meet your unique needs? Well, let us outline the basic steps to finding a new health insurance broker and what to look for when choosing your new employee benefits partner.
How to Start the Process to Find a New Health Insurance Broker
What an Insurance Broker Is and What They Do
It’s time for a quick definition, in case this is the first time you are shopping around for a new benefits broker. What exactly is the difference between a health insurance broker and an insurance agent? Well, an insurance agent is employed by a specific insurance provider and is the point of contact between the insurance carrier and the plan purchaser. They might be able to offer discounts and assemble a specific group health insurance plan for employers, but they won’t be able to shop around between different providers to deliver the best results.
An insurance broker, on the other hand, is the representative of the employer rather than of the insurance carrier. They are empowered by the employer to negotiate on their behalf with any and all insurance providers. This means that they can get the best rates in the market rather than from a given carrier and can put together a specialized employee benefits package from multiple providers that meets both the employer’s and the employees’ needs. They can also serve as a benefits consultant to help their clients develop effective benefits strategies.
How to Tell if It’s Time to Find a New Insurance Broker
The first step in your journey to find a new employee benefits broker or insurance broker is to decide whether or not you need a new broker. We’ve covered this topic extensively in a previous article but here are some clear warning signs that it’s probably time to start your employee benefits broker search:
• Renewing the same employee benefits package year over year with little consideration for a long-term benefits strategy
• Receiving less guidance or a lower standard of customer service from your insurance broker
• Going several years without reexamining the benefits broker relationship
• Finding it difficult to determine ROI that justifies investment in your current health insurance broker
How to Start the Search for an Insurance Broker
Once you’ve decided to find a new employee benefits broker, you should define your goals for your benefits plan. This will help you find a partner who will work with you to meet those goals. Do you want to reduce costs for your existing healthcare benefits so that you can expand other benefits your employees value like dental or vision insurance? Or do you want to completely restructure your entire employee benefits plan?
Based on these goals, set the criteria to define promising health insurance brokers based on these goals and your knowledge of the market. What does your ideal employee benefits broker look like? What do you not want in your next insurance broker? These criteria will also tell you what questions to ask a new benefits broker.
If you want to be extremely thorough, you can input the criteria you identify into a benefits broker Request For Proposal. Think of the benefits broker RFP as a formalized job description for your next benefits broker. Your benefits broker RFP should include a statement of your benefits and health insurance needs but leave room for brokers to “wow” you with additional services. You can then share your broker RFP with brokers who seem promising during your research so that their representatives can tailor their proposals to your unique needs.
What is more important than the procedure for starting your search is knowing what to look for in a broker. You want to set the right goals for your business, identify accurate needs, and put together criteria which will be genuinely useful in choosing a new health insurance broker.
What to Look for In a New Health Insurance Broker
Size and Customer Service Approach
Generally speaking, you want to work with a boutique broker that specializes in SMBs. This is relevant because large brokers will often prioritize their big accounts over your business. Smaller insurance brokers will treat you as a priority no matter how big your business is because every account is an important account for them. An SMB health insurance broker will be much more willing to offer more customized solutions which are tailored to your specific needs. And they won’t have had a chance to develop the bureaucracy which makes working with the largest benefits brokers so frustrating
In addition to overall size, another thing to look for is the benefits broker’s approach to customer service. You should work with an insurance broker who will provide you with a dedicated account manager, access to key players in their organization, and continued support after setting up the initial insurance plan.
Minimizing Expenses While Maximizing Value for Employees
Your new health insurance broker should do everything in their power to minimize your expenses while maximizing value for your employees. Far too many insurance brokers focus on the former and neglect the latter, but both are vital for a successful benefits strategy.
The best employee benefits brokers are proactive in their approach to insurance challenges. First, they identify demonstrated employee needs by conducting health-risk assessments (or HRAs) and other employee surveys to find out what benefits your employees really need. Then they create an employee insurance package which meets those needs while cutting costs from lower priority benefits. These steps are absolutely necessary to effectively minimize costs and maximize impact.
What should the resulting insurance package look like? An effective health insurance broker will put together a flexible and creative company benefits plan. Often, the package will include a tiered insurance structure which allows low-risk employees to choose cheaper plans and other employees to take on more expensive plans in exchange for more comprehensive coverage.
The foundation of the tiered approach for small businesses will be high-deductible health plans (HDHP) paired with health savings accounts. These plans allow employees to take on more responsibility for and control over their healthcare expenses. They provide a much higher standard of care than the ‘catastrophe insurance’ which is becoming popular but at a low cost to both employer and employee. And thanks to a brand new IRS rule, HDHPs can now offer more preventive care at low-deductibles to reduce your business’ healthcare expenses in the long-term.
Ask potential insurance brokers what they can do for your business. If they answer in terms of both what they will do to help your bottom line and what their plans will do to help your employees stay happy and healthy, odds are that they will be a great partner for your growing business. If not, they’re almost certainly not the right choice for you.
Creative Employee Benefits: Wellness Benefits and More
A great health insurance broker won’t stop at the conventional. They will be at the forefront of the benefits conversation, offering uncommon benefits which will help you stand out in the competitive employer marketplace. And one of the biggest areas which your new employee benefits broker should cover is wellness benefits. These benefits include smoking-cessation and weight-loss programs, gym memberships and nutritional programs, and other ‘lifestyle’ benefits.
Your insurance broker should not just want to put out fires after they’ve started, but rather should head off expenses at the pass. Wellness benefits can prevent healthcare expenses from lifestyle-related illnesses, which represent a full 70% of all healthcare costs. That’s one reason why wellness benefits have an average ROI of 3:1. Plus, they do a great job of making employees feel valued, taken care of, and engaged in their work at the same time as they are saving your money.
Employee Benefits Technology
Another important factor to consider when choosing an employee benefits broker is what employee benefits technology they offer. Generally, brokers will offer two different kinds of technology: benefits enrollment technology and telemedicine.
Benefits enrollment technology is software which can be used to facilitate the benefits experience for your HR team and your employees. The best employee benefits brokers will offer top-of-the-line enrollment software to streamline open enrollment and record the necessary compliance information. They may also offer a company benefits portal which allows employees to review and manage their benefits, request time off, and learn about their healthcare options.
On another note, telemedicine is transforming the way that employees access healthcare. Allowing employees to consult doctors digitally keeps them healthier, reduces costs for everyone involved, and reduces absenteeism. Other software solutions can offer pharmacy discounts, notify employees of nearby providers, and otherwise streamline the healthcare experience for your employees.
How to Tell that a Boutique Health Insurance Broker Can Deliver the Goods
Proven Track Record of Success
Actions and results speak much louder than words and results are the best way to measure the worthiness of a potential health insurance broker. A benefits broker worth their salt will be able to provide you with evidence of past success with clients who are like you. You should look at their website to see if they have published any client case studies. If they do, that’s a great sign in-and-of-itself because it shows that their clients are happy with their results. But you should also take the time to read through the case studies to see if the insurance broker provided their client with the kind of services that you are looking for at your business.
The greatest test of a broker, though, is whether they will let you talk to any current clients to get a truly unfiltered perspective on what working with them will look like. Giving access to their clients is a real sign of trustworthiness and a testament to the kind of relationship that a broker has with their clients. As an employer, you ask for a list of references from any potential hires. You created a job listing with your benefits broker RFP, why shouldn’t you ask for references as well?
Key Takeaways for Finding an Insurance Broker
The decision of how to choose a new health insurance broker is a pretty big deal. The right broker can help you cut costs, provide more value for your employees, and win the war for talent by attracting, retaining, and engaging the talent your business needs to succeed. This can sometimes seem like an overwhelming task. Hopefully, this article has given you a good idea to start. Just remember: • Decide what you want to accomplish with your health insurance plan and employee benefits package so that you know what to look for in an insurance broker • Put together a benefits broker RFP to help define what you’re looking for and solicit proposals • Boutique brokers will make growing businesses a top-priority and provide more customized, hands-on service • Questions to ask a new benefits broker include whether they provide wellness benefits, tiered benefits, and benefits technology • Pick a broker who takes an approach that both minimizes expenses and maximizes impact for employees; focusing on just one isn’t enough • Brokers with a proven track record of success and provide case studies or even direct access to clients are a much safer bet than unknowns
Employee compensation represents one of an organization’s biggest and most crucial investments. With the right compensation structure in place, an organization can hire and retain great talent to drive profitable business. On the other hand, a poor compensation structure can lead to a talent crisis or trouble maintaining profitability.
Unlike so many other elements of business or HR, executive compensation is not simply a matter of best practices. While industry benchmarks are an important part of the formula, any compensation strategy should focus on the unique needs, goals, strengths, and culture of the organization.
Looking forward, we’ll explore some of the main ideas from the webinar, including:
• The value of planning and alignment when it comes to executive compensation
• Creating alignment with a business’ cultural and philosophical values in mind
• Leveraging equity effectively as part of a compensation strategy
• Creating a bonus structure that’s scaled to your business
The Power of Planning and Alignment Executive compensation would probably be a lot easier if all businesses were the same, but the incredible variety of industries, business types, and corporate cultures in the marketplace means that one-size most certainly does not fit all.
In order to succeed in such a wide-open game, organizations must articulate a clear, well-thought-out strategy to guide their approach to talent acquisition and retention that’s built on a deep understanding of what their business is, where they are today, where they’d like to go, and what they need to do to get there. By focusing on compensation strategy conceptually and not just hiring and compensating employees one-off, businesses can create a more cohesive culture that’s aligned with business goals.
For example, in the case of startups, many key players (especially executives) are often brought onto a team one at a time. This creates a flexible situation in which many early-stage companies create a variety of different salary points, equity offers, and bonus packages on an ad hoc basis to fit employees as they hire.
While that model works well for some startups and may be tempting in the short term, it can be disastrous as a basis for a long-term compensation structure for several reasons. First of all, planning compensation one employee at a time makes it easy to lose the forest for the trees. That means that, after several years of hiring, employees throughout the company could command salaries and benefits packages that have little to do with their current value to the organization and better reflect how desperate the company was for talent at the time of hire.
Additionally, working on a case-by-case basis without a well-structured, well-aligned plan in place can wind up producing a pay scale that feels unfair and demotivating for workers just a year or two in. The more transparency and logical explanation an organization can provide about how compensation works, the more likely they are to connect with discerning talent.
When a business builds a consistent, richly-planned, well-articulated compensation structure, it tells the workforce, “Everybody here is valuable, and we are in this together.” By planning a consistent approach to compensation from the outset, organizations can create a well-scaled core team with a healthy culture that’s positioned to drive both innovation and profit.
Planning with Values and Goals in Mind If self-knowledge is the key to compensation alignment, the next logical question is, “What kind of self-knowledge do we need?” The short answer to that question is “as much as possible,” but let’s take a moment to think about some specific questions businesses’ should ask themselves about their organizational values and goals as they build a compensation strategy.
Revenue vs. Profit vs. Innovation – The way leaders are compensated must directly reflect their ability to drive business success. With that said, there a variety of different ways to quantify that success depending on a business’ size, position in the marketplace, and growth targets.
A strong approach to executive compensation must identify key growth indicators or KPIs and ensure individual success is aligned with company success. That means compensation strategies may shift as the organization evolves, but only in mindful ways that reflect the work at hand and upcoming goals.
Individual vs. Team Performance – Some businesses are about achieving results no matter what and elevating the difference-makers who got there when others couldn’t; other organizations emphasize collective or team-based success. Each scenario requires a specific approach to compensation, and a lack of philosophical alignment only sets everybody up to fail.
Make no mistake, incentivizing individual achievement or teamwork will directly and strongly shape workplace culture, which reinforces the importance of planning with organizational goals and values in mind before designing compensation packages out of thin air. Both models can be successful in different scenarios, but once again, it’s a matter of industry, goals, and organizational self-knowledge.
Short- vs. Long-term Performance – It wouldn’t be fair to judge or compete in a race if the distance wasn’t established ahead of time. By the same token, the effectiveness of leaders can’t be fairly judged without a business articulating what they really value and expect.
Some organizations philosophically prefer a slow and steady pace; others are innovation-minded and would rather someone step up to the plate and hit a home run than maintain a solid batting average for several years. Again, both styles can work, but getting caught between the two in terms of articulation or finding compensation out of alignment with organizational goals can both be costly.
Aligning Different Elements of Your Compensation Package Any compensation package includes a salary, employee benefits, and often for executives, equity and bonus opportunities. For a compensation structure to truly work, all those pieces of the pie must be balanced in a way that works for assets and the company alike, building reward, incentive, and buy-in.
Let’s think about how different elements of that compensation puzzle can be implemented or leveraged depending on company goals, size, and industry.
Balancing Base Salary – Base salary is probably the least “unique” piece of a compensation package, as it is generally strongly informed by industry benchmarks. With that said, salary can be adjusted on a sliding scale based on organizational values and growth goals.
For example, an early-stage organization prioritizing growth, innovation, and short-term performance can create strong bonus incentives for executives (more on that later), allowing the organization to place less emphasis on salary. On the other hand, larger, more established businesses who are years or decades past their IPO can align their compensation structure to their market positioning by putting greater emphasis on salaries.
Intelligently Leveraging Equity – In almost any for-profit business scenario, the business itself is the owners’ primary asset. When experienced executives see a profitable idea or great business model, they want to get in on the ground floor and grow along with that company. That means equity offers can be powerful incentives for executives and other leaders to drive growth, achieve milestones, and stay bought in for a half-decade or more.
On the other hand, some organizations’ goals or financial positions might make it advantageous to protect equity. That can be a successful and profitable long-term strategy as well, but in order to win with great talent, those organizations will need to pump up other aspects of compensation, such as salary or achievable bonuses.
Again, the key either way is to articulate a consistent approach that’s aligned to company goals and drives growth – not just to land talent by offering them stock options.
Building an Impactful Bonus Structure – Startup culture has made equity compensation so attractive over the last 20 years that cash bonuses are often forgotten as part of a winning compensation strategy. With that said, a well-scaled bonus structure is a fantastic tool for keeping leadership engaged and maximizing each project or initiative.
Bonuses invite employees to succeed and celebrate alongside the organization they work for and see the true connection between their great work and company growth. In this way, bonuses reward assets for their direct, impactful alignment with company values and goals. That’s why bonuses are great buy-in tools and motivators, both in the long- and short-term.
One of the best ways organizations (even small or medium-sized ones) can provide impactful bonuses that show clear alignment with company values and goals is to provide ad hoc rewards. Essentially, ad hoc bonuses are cash rewards distributed to leaders and/or team members when specific goals are achieved. An ad hoc bonus could come at the end of a timely development sprint, at the completion of a key project, at the closing of a major account, or any other time for organizational celebration.
Conclusion/Takeaways Creating a winning executive compensation structure is highly complex because no two businesses are alike. Remember: • Executive compensation must be aligned with organizational goals and values in order to succeed • Salary, equity offers, and bonuses can all be structured, balanced, and leveraged in different ways depending on company size and objectives, but the compensation structure must match be built purposefully and account for the uniqueness of the organization
When was the last time you considered how well your employee benefits broker was performing? In the intense war for talent that we’re now experiencing across industries, you can’t risk overlooking any aspect of recruitment and retention strategy.
Employee benefits are one of your most effective tools to attract top talent and retain the top performers you have. With more open jobs that unemployed people currently in the US, recruiters and executives must do everything possible to keep their organization competitive in the talent marketplace.
The employee benefits broker your business works with plays a large role in how impactful your overall benefits offering in your ability to attract and retain talent. Think through the crucial questions outlined in this post will help you ensure that you’re working with a benefits broker that’s doing the most for your business.
1.Conduct a straightforward costs and benefits analysis
First of all, the amount of money you put into your employee benefits program is no small expense for your company. For most companies, benefits are the second most costly expense, just behind salaries, according to data from the Society for Human Resource Management (SHRM). So, it’s a smart decision to enlist a skilled benefits broker to ensure those costs are kept low while driving the maximum value for your business. But you must consider how much value is your current broker providing to your business? And what are the measurable advantages that you can directly correlate back to their services?
The truth is, your broker may be providing subpar services that aren’t getting you the results you want or need (or that are visible to employees). What you need to happen: the money you put into a benefits program is well spent, and you don’t have to continuously worry about what your funds are going toward. You have too much on your plate to have to then keep tabs on your benefits broker, so review your current benefits program and employee satisfaction level to determine if your broker is meeting the mark.
2. Consider the latest technologies: Is your broker keeping up?
Approaches to employee benefits administration continue to be updated based on what’s happening in technology and business intelligence. When was the last time you had a conversation with your benefits broker about how they’re using these advances to push forward your company’s benefits strategy? If this conversation has never been had, or if you feel like your benefits broker isn’t using some of these technologies the way they could, it may be time to find a new employee benefits consultant.
Part of your role in choosing a benefits broker is ensuring that you find someone who not only recognizes the importance of proactive change, but who also incorporates these updates into the way they do business. It should be their responsibility to know what’s hot in the benefits market and what high-quality candidates are looking for, so that they can make effective recommendations to you and your team about offerings and updates. If your employee benefits broker is behind the times, your benefits package will be, too. And if that’s the case, you’ll have a much more difficult time attracting and retaining the best talent.
3. Assess business growth (or lack thereof)
If your organization is growing, chances are you need to make updates to many of the vendors or consultants you work with. Benefits brokers are no exception, as these professionals typically have specialties in regards to the size, industry, and culture of the companies they work with. If your workforce is growing rapidly, it may be time to assess whether a different broker would bring you better results.
When your company changes, it’s always a good idea to take a look at if your benefits broker can still provide the level of services you need. It may be especially smart to look at current and historical growth information and projections around the time when it’s time to think about revamping your employee benefits package for the coming year.
4. You haven’t looked around in a while
It’s of course easy to let consultant-shopping fall by the wayside once you’ve hired someone and have gotten used to working together. But when was the last time you looked around to see what else is out there? Even if you don’t end up hiring a new benefits broker, just taking this step could mean that you will reaffirm your decision in hiring your current broker. You may already have the best, most cost-effective person for the job—but you’ll never know if you don’t keep up with your research. If it’s been more than three years, as the SHRM suggests, start shopping for a new broker now, even if you don’t take any further steps forward beyond exploring your options.
5. Service and communication have been lacking
We’ve all experienced when a vendor just isn’t performing up to par. It can be easy to make excuses for these professionals or to hand out too many second chances, especially if we like the person and really want the business relationship to work out. But, we often end up having to do more work than we should be doing in these instances.
Remember: you’ve hired a benefits broker for a specific job. Really think about if they are providing every required aspect of that job, and ideally going above and beyond what is expected to provide the highest level of service. If you’re having to correct their mistakes, call or email them more than once for a response, or remind them about deadlines or new strategies to try, it’s probably time to call it quits and find a broker who will step up and provide everything you need.
6. Employees aren’t satisfied with the benefits program or with the enrollment process
In today’s candidate-driven job market, employees are often on the lookout for a better position. Even if they’re satisfied with their work, their role, and their company, they are always keeping their eyes open to make sure there isn’t something even better out there. One survey conducted showed that 78% of people are open to new jobs in 2019, and 38% reported to be actively searching for a new role.
Benefits play a large role in employees’ decisions about whether to stay or leave. So how happy are your workers with their current benefits package? You may hear complaints or praise at lunch or in the hall, and that could be helpful information when you’re starting to think about your benefits broker. Or, you may even want to implement a benefits survey where employees will feel encouraged to share what they don’t like or what they’d like added in the near future.
This can be a great way to find out if your benefits broker is getting you the package that includes everything the modern employee wants, from plenty of parental leave to gym memberships to excellent health and dental packages, and more.
But, there’s more to benefits satisfaction than just the benefits themselves—employees also care about the benefits portal and having easy access to benefits information. Assess whether information is readily and easily available to all employees.
What kind of benefits technology does your current broker use? The enrollment process should also be streamlined and simple so that employees aren’t dealing with a big headache once a year to get the benefits they want and need. You need a broker consultant who will use the latest tools to ensure that processes are simple and transparent for your employees.
The person behind your employee benefits package and process has a lot of influence on employee satisfaction and your ability to attract high-quality candidates. When you’re assessing whether it’s time to find a new benefits broker, consider:
If the costs versus benefits are aligned
If your broker is keeping up with the latest trends and technologies
If your organization has grown significantly and may have new needs that your current broker can’t provide
If it’s been more than three years since you shopped around
If your broker’s communication and services haven’t been up to par
If employees are complaining or aren’t satisfied with their current benefits package
If some of these considerations are true for you and your organization, it may be time to start shopping around for a new employee benefits broker. Remember that before you make a selection, it’s important to list all the ways your previous broker was not meeting expectations so that you don’t make the same mistakes again.