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Beyond the traditional benefits menu most employers offer—health, life and disability insurance, along with retirement savings vehicles—lies a landscape of alternative benefits that are as unique as the organizations offering them.
Alternative benefits can help meet employees' needs and increase their levels of engagement. In some cases employers structure alternative benefits as a way to establish and reinforce the desired company culture; in others, they use these benefits to achieve broader goals associated with their employees’ health and well-being.
Yet companies need to choose carefully the types of alternative benefits they will offer. These should be affordable, with a budget that can be managed over the long term. Most important, they should appeal to workers and help them meet specific needs.
Voluntary Benefits and Beyond
Depending on the type offered, alternative benefits allow employers to enhance their employee value propositions—that is, everything of value that the organization offers to staff—without spending a lot of money. For instance, providing access to so-called voluntary benefits, with premiums paid by employees through paycheck deferral, costs employers little to nothing beyond some additional administrative time. Yet the products offered through a voluntary benefits program—such as pet insurance, long-term care, cancer and critical-illness insurance, and supplemental life and disability coverage—can be highly valued. “There are many opportunities for these types of voluntary benefits to be useful to employees,” said Chris Costello, principal of CBG Benefits Inc. in Woburn, Mass.
However, alternative benefits go well beyond insurance products. Grasshopper, a Needham, Mass.-based provider of phone systems to small businesses, offers inexpensive but meaningful additions to its benefits program for its 40-some employees. “The cost to delight and wow our employees is minimal—less than 10 percent of what we spend on medical benefits—but the benefit to the company is huge,” said Jennifer Joos, PHR, the company’s people-strategy manager.
Among Grasshopper’s alternative benefits is a $5 daily subsidy that encourages employees to have lunch in the office and “hang out” and talk with colleagues. Other programs include free snacks, a pool table and after-work events that staff suggest and vote on, such as baseball games, brewery tours and Formula One auto races. The company even presents employees with a giant cookie to take home when their children graduate from kindergarten.
The point of these programs is to create a certain dynamic in the workplace. “When our team is happy, we have a fun environment and we can build a culture where employees want to work hard,” Joos explained. “When we treat employees really well, they will in turn treat customers really well.”
--------------------------------------------------------------The point of these programs is to create a certain dynamic in the workplace.--------------------------------------------------------------
Getting What They Need
As defined contribution health benefits become more prominent on employers’ radar screens, the issue of benefits choice will grow more important. If an organization offers employees a set dollar amount for their benefits each year, it may want to provide a greater array of benefits that they can choose.
This approach is not necessarily new, of course. For years, many employers have been offering cafeteria-style benefits. “To the extent an employer can, providing quality offerings and then letting employees pick and choose is still the best approach because it is not one size fits all,” said Costello.
Using online benefits portals, businesses could allow employees to do some modeling of their own financial and benefits needs and design their benefits choices to meet those needs. Employees might opt to, say, shift away from a more expensive health plan in favor of increasing their 401(k) contributions or purchasing additional life insurance.
To find out what employees want and value from benefit programs, companies can survey employees with a limited number of questions. “You can be offering benefits for years thinking that those benefits are what employees want,” said Costello. However, “once you understand that employees don’t value x,y or z, you can start to shift benefits to what they do want.”
In some cases, employers can design and launch pilot programs for certain benefits to see how the chosen group of workers react. This allows a company to make adjustments or to determine whether a program is viable before making it available to everyone.
Developing Customized Programs
Palmyra, Wis.-based Standard Process Inc. focuses its alternative benefit programs on helping its 300 employees manage their lives better and improve their health. Given its remote rural location, the company has an onsite day care center to make child care as convenient as possible. In addition, it has two chiropractors on staff to help with injuries and give advice on handling ergonomic issues and to serve as wellness coaches.
“We are not trying to get in the middle of employees’ primary-care-physician relationships,” emphasized Jerry Curtain, the company’s HR director. “The chiropractors serve as liaisons. This way, employees don’t have to travel to their doctor for routine issues.”
Not all of Standard Process’ wellness-related benefits have worked out. For example, the company offered healthy-eating options in its cafeteria, but the quality of the food and timeliness of service were not up to standards, so Standard Process discontinued the program. To make up for that change, it started a staff garden by tilling several acres of land and giving employees individual garden plots to cultivate.
Along with helping employees grow their own healthy organic food, the garden plots provide opportunities for colleagues to interact.
As these examples show, alternative benefits can be as unique as the company offering them and the employees using them. The key is to find the right mix at the right cost.
Joanne Sammer is a New Jersey-based business and financial writer.
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