Cultural shifts such as Quiet Quitting and The Great Resignation have adjusted how employees and employers think about their compensation. Previously, pay was the first, if not only, consideration. Benefits were nice to have but weren’t always given much thought.
Nowadays, salary isn't the only part of compensation that matters. Just like payroll, benefits are more than just a perk, and they need to be fair and equal for the whole team.
The nature of “perks”
The highly publicized culture of tech companies has popularized offering fun or useful perks to attract and retain employees. Free lunches, employee outings or classes, and of course the classic company ping-pong table are touted as important benefits and becoming more common across the board.
Are these perks truly game-changing culture builders, or are they just a way of keeping employees in the office longer? That debate rages on.
At the same time, there’s another part of compensation being thrust into the limelight. Something that previously may have been an afterthought when choosing between jobs. You guessed it, it’s group benefits!
Benefits are compensation
It’s no longer enough to say, “We have benefits!” when making a job offer. Offering a one-size-fits-none plan doesn’t make the cut anymore. People understand that benefits are part of their compensation and are choosing plans that provide true value to them. Yes, flexibility and autonomy are both very important parts of a benefits plan, but above all, having a plan that’s fair and equitable is a necessity.
To understand that benefits are compensation they need to stop being viewed as a “perk.” Perks, like the ones we mentioned above, aren’t of equal value to everyone and don’t need to be. Think about:
- A ping-pong table even though not everyone plays; or
- A fridge stocked with beer for happy hour although not everyone drinks.
Not everyone can enjoy them equally. That may be ok when it comes to in-office extras, but there’s a cash-value to benefits. So why do we treat our benefits plans like perks that only work for some team members?
Take a premium-based plan for example. The members who make more claims get more value from the plan.
This can mean a healthy individual who doesn’t use healthcare services doesn’t get as much compensation. Or that someone is cut off once they hit a maximum and can’t get full value from the plan. It could even mean someone who makes a large number of claims effectively doubles their salary!
This inequality doesn’t fit the notion of “benefits as compensation”.
Providing benefits that are equal to all – say, an HSA – evens the playing field. Since HSAs don’t have category limits, all members can find services that work for them and get reimbursed. Everyone gets benefits that are of equal value!
Time to provide great benefits
If you haven’t already guessed it, if you’re offering a premium-based health benefits plan you’re not treating your team fairly. In today’s competitive environment, that won’t hold strong for long. Your team is looking for three things when it comes to their benefits:
- Autonomy - they want to spend their compensation when they want
- Flexibility – the ability to decide where they want to spend and how much
- Value – to truly get the dollar value they’re promised
Premium-based plans struggle to meet these needs because they’re typically rigid with little wiggle room and don’t always provide true value to your team. With alternatives such as a Health Spending Account or an Enhanced Health Blend, you provide benefits that are flexible and curated to your team’s needs. Now that’s how you get competitive!
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