Keeping Benefits Competitive Requires Vigilance—and a Strategy

In the current hypercompetitive market for talent, most employers focus on making sure compensation stays closely connected to prevailing pay rates. Employers, however, could be missing an opportunity if they do not apply the same level of attention to keeping employee benefits programs competitive.

Simply expanding the benefits package is not necessarily enough to ensure that it remains attractive to job candidates and current employees. Instead, employers can ask employees what they want from their benefits while also engaging with job candidates to understand whether the benefits package is up-to-date and relevant to their needs.

Meta Platforms Inc. (formerly Facebook Inc.), in designing and maintaining its benefits portfolio, focuses on traditional data points such as benchmarking, market insights, and current and projected workforce demographics, as well as employee feedback and sentiments. To make sure its benefits are relevant and valued across its global workforce, the company provides employees with up to $3,000 per year to spend among a wide range of benefits options, such as gym memberships, college tuition and loan-assistance payments, and pet insurance.

"We review the total portfolio to ensure [those benefits] are providing for the diverse needs of our workforce and creating the desired well-being outcomes," said Steve Braun, Meta's vice president of global benefits. If this review reveals that "certain programs are performing to desired expectations and outcomes, we identify ways to expand the reach." However, if a program has become less relevant to employees, the company phases out the program and invests those dollars elsewhere.

"We strive to have a responsive benefit strategy, driven by data insights, that allows us to make changes quickly, if and when necessary," he said.

A Fast-Moving Market

In the current labor market, employers must regularly conduct this type of benefits review and take action on what they find.

"Things are moving so fast that reviewing benefits even once a year may not be enough," said Christina Petersen, chief people officer at Worksome, an enterprise platform that helps corporations hire freelance workers. "By reviewing benefits on an ongoing basis, you can be sure you are considering the newest data."

While it is a good idea to a have a multiyear strategic plan, "it makes sense to have regular check-ins," said Andrew Rosenberg, a partner with consulting firm Mercer in Indianapolis. In general, employers should be prepared "to hit the refresh button on benefits annually or at least every couple of years."

He suggests thinking about benefits as being written on an easily erased whiteboard rather than printed on paper.

Tailoring Benefits for Specific Groups

Part of this process involves understanding what employees need and want. Segmenting workers according to their needs can help to make sure you're offering appropriate benefits for everyone. "We have employees who are at different stages in their lives," said Debbie Gunning, vice president of people for Human Interest, a San Francisco-based financial technology firm with about 600 employees.

To gain insight into benefits from a variety of perspectives, Gunning not only conducts focus groups and employee benefits surveys, but she and her team also "rely on feedback from employee resource groups in the company to gain a better understanding of how we can continue to support our employees through our benefits program," she said.

By understanding the workforce at this more granular level, employers can be more confident that they know who their people are, why they joined the company, and why and when they might leave the organization, she noted.

"This is a dynamic process, so it is important to stay on top of trends and best practices among organizations of similar size and circumstances," advised Becky Seefeldt, vice president of strategy with Benefit Resource in New York City. Check with hiring managers and executives to make sure the benefits package is perceived as valuable and competitive.

Be Ready to Act

When employers start asking for feedback on benefits, they must be prepared either to take action on what they find or to explain why they did not. "There needs to be a commitment before you start asking questions," Rosenberg said. Otherwise, employers risk breeding distrust among employees.

He recommended that employers develop a structure for thinking through changes to benefits programs. For example, it is important to consider how well new benefits under consideration fit into the total rewards strategy and the organization's overall values.

By showing how benefits changes can help employers address problems with attraction and retention, it becomes easier to justify any additional costs, which is why Petersen recommends doing a cost-benefit analysis around these changes.

In some cases, this analysis is straightforward. For example, access to telehealth physical therapy sessions for musculoskeletal problems for employees on medical leave due to joint pain could be measured in several ways, including how quickly employees return to work and how many were able to avoid costly surgical interventions.

"Another metric is how meaningful it is to employees and their families to have access to this benefit," Rosenberg said. A benefit that improves quality of life for employees and their families can create a sort of "stickiness" that occurs when employees stay with an employer because the organization shows concern for their well-being and that of their families.

Returning to a Total Rewards Focus

Employers have long communicated employee benefits and compensation together as a single total rewards package. In this environment, however, employers can expand the definition of total rewards further. For example, on-the-job learning and career paths can be integrated into total rewards as a way to emphasize the different ways to build a career with the organization. This can go beyond job promotions to emphasize horizontal job movement, which allows employees to embrace new roles and expand their skills without having to move to a higher level.

The total rewards statement is also making a comeback. These can show the monetary value of compensation, benefits and anything else of value the employer provides to employees. The statements can be particularly powerful when they are presented to job candidates as a way to provide more information about the company and what it offers.

Joanne Sammer is a New Jersey-based business and financial writer.