AcademicEssay

Signature Assignment # 3

Revamping our Corporate Benefit Package

Executive Summary

Our company’s current benefits program is outdated by today’s standards. We have discussed the matter with existing employees, potential new hires, as well as industry peers to reach this conclusion. Our uncompetitive benefits have put us at a disadvantage against other companies when it comes to acquiring and retaining talent. The average millennial worker today spends about 5 years with a company (Dash Burst, 2015). Just enough time for them to learn our company culture and build their skill set and value, and then take off for another company. We do not want to be the minor league “farm” system for another company, where we spend our resources building up an employee, only for someone else to reap those benefits. Also only 10% of job seekers surveyed say the benefits have no bearing on their decision. A quarter of these job seekers say benefits are very important, with the reaming 65% saying benefits are somewhat important in deciding on a job offer (Dash Burst, 2015).

In comparing ourselves with other companies in similar industries, our HR team has discovered we need to not only increase the benefits we offer, but we must also do a better job of communicating them to our staff, so they are aware of what exactly we offer. This document will highlight our current benefits, new benefits we wish to add, a communication plan, as well as an analysis of costs.

Our Benefits Today

Currently, we offer the following benefits within our company to all employees:

· Medical/Dental/Vision – offered to all employees and their dependents, with a 25% premium copay from each employee.

· Flex Spending Cafeteria programs for medical expenses

· Paid Vacation and Holidays for salaried employees

· 401K matching at 4%

· Group Life Insurance/Dependent Care

These are the most common benefits most all employers of any industry offer (Robert Half, 2016). However, in order for us to be the employer of choice, and to attract and retain talent, we must go above and beyond the norms and offer additional benefits to our employees. We have reached out to our peers at other companies and have put together additional benefits we want to offer our employees, as well as current enhancements to our existing benefit plans. This gives us an externally equitable plan, to be competitive in attracting new talent. We have also polled our current employees as far as what types of benefits they would like to have, which has also helped shape our recommendations. This will make our plan internally viable. With the overall goal being to attract and retain talent, these changes to our benefits will provide us with the advantage we need to do just that.

Our Benefits Tomorrow

We plan to make these fundamental changes to the following current benefits:

Medical/Dental/Vision: Currently we provide medical/dental/vision to any employee, their spouse, and any children up to the age of 26. Since the costs of these benefits seem to increase annually, sometimes by 30% or more, we ask that employees pay 25% of their premium. The problem with this method is that it isn’t internally equitable in the eyes of our current employees. If we have a single young person, in good health who rarely needs to see a doctor, their approximate cost to us is around $500 per month. If we have an employee with a spouse with a spouse and five young kids who see the doctor regularly, their cost to us is much, much higher. The change we want to make here is this: the company will pay 100% of your medical benefits for you, the individual. That will cost us an extra $125 a month per employee, since that would be their current 25% premium co-pay. To offset this slight increase, we plan to tell employees who want spouses and their kids on our medical plan that they will now pay 30% of the additional premium their family costs us. This way, a young millennial employee with no spouse or kids, gets his medical/dental/vision paid 100% by the company, a valuable recruiting tool. We still extend benefits to the immediate family, however the premium co-pay goes up slightly by 5%, a palatable number for anyone. Also this cost is offset somewhat by the fact you no longer pay anything for yourself.

In addition to the changes in copays, we also want to extend benefits to domestic partners. Given that we are in the San Francisco Bay Area, a very liberal region, this small extension allows us to draw even more talent to us. The last part would be to remind all the employees that their medical premium copays are before tax. This part must be clearly communicated to them so they understand there are tax benefits to the medical copays, similar to our flex spending programs. At this time, we also want to let employees know about our High Deductible Health Care Plan and our Health Savings Account (HSA):

High Deductible Health Plan: This plan is a PPO with a higher deductible that covers eligible medical and pharmacy expenses and allows you to set aside pre-tax dollars in a Health Savings Account for future IRS eligible medical expenses

Health Savings Account: Designed to help pay for your current eligible health care costs and save for future health care expenses. Your contributions, earnings and withdrawals are all tax-free. It’s a triple tax-savings opportunity that can put more money in your pocket (Taken directly from our employee benefits handbook)

Flex Spending (Cafeteria Programs): We currently offer medical flex spending programs, however now there is a flex spending transportation program available by the IRS (IRS, 2016). These benefits are the best for us since they are government tax breaks and cost us, as employers, nothing. The current staff can easily administer these benefits, so all we have to do is articulate these benefits to potential new hires and current employees.

401K: Although there are other companies that offer higher matching percentages than us, to increase the matching from 4% to 5% would be a big cost to the company, one we may not be willing to make at this time. Instead, we want to make sure we offer regular 401K, but also a Roth 401K program. We want to be able to educate our employees about both, so the best way to do this is a have a financial consultant available at no cost to the employees. This consultant could either come in to the office or handle calls over the phone and answer any question employees might have, such as the difference between Roth and traditional 401K programs, as well as the appropriate investment options. This added benefit to our current program will come at a minimum cost, especially when compared to increasing the matching funds the company provides.

Flexible Office Locations: One of the biggest problems in the San Francisco Bay Area today is traffic. It has gotten bad with the solid local economy that has many people at work. Since we only have our San Francisco headquarters, employees from the East Bay have to cross the Bay Bridge every day. In our polling, most people spend an hour each day simply crossing the bridge! We have lost several employees who wanted to stay here, but the commute was just too much for them. By adding a small, branch office in Oakland or elsewhere in the East Bay, we can give people the option of working out of that location on occasion, thus reducing the impact of their commute on their lives. While there are considerable costs in opening another office, we feel this will be offset by the tremendous recruiting tool that this will give us. No one wants to spend 2 hours of their lives in a car every day; a second office can help alleviate that problem and help us toward our goal of attracting and retaining talent.

Tuition Reimbursement Plan: Since the overall goal of this is to attract and retain employees, we feel a comprehensive tuition reimbursement plan should be in place. We envision two tiers of this plan: the first tier would be available to all employees – we will pay up to $5,000 a year in reimbursements for courses or continuing education classes that an employee may want to attend, as long as they get prior approval from their immediate supervisor. The course obviously has to be relevant to their position. The second tier will be made available to key employees we want to retain long term. This 2nd tier will require they put together an education plan with their supervisor and HR. If we have an employee that we want to promote but want them to obtain an advanced degree for the position, the company can create a plan where the employee pays half, regardless of the costs, and the company pays the other half. Upon graduation and some duration of service beyond that, somewhere between 3-5 years, the company then reimburses the employee the remaining 50% of the tuition. This plan will help us retain employees long term, by paying 100% of their educational costs. However, to protect ourselves from someone getting a Master’s degree on our dime and then seeking another job, we have them initially pay 50% of the costs, and after graduating and working for us for a few years, we reimburse them. This way we can offer the full reimbursement, but it forces them to make a level of commitment to us as well.

Conclusion

In today’s local economy, people have options as far as where they want to work. Our goal is to attract and retain talent, and in order to do that, our benefits package has to be competitive and attractive to everyone. Over 90% of job seekers agree that benefits play a role in their decision making process (Dash Burst, 2015). With the competition for talented workers becoming fierce in this current economy, we as a company, have to step up and deliver a robust benefit package that will make us the employer of choice; a place where people want to be.

The changes we’ve outlined will help reach this goal with minimal financial costs, however the biggest piece in all this is communication. The HR department will put together a presentation for potential new hires that will outline all the benefits in full detail, as well as do an annual presentation to all current employees outlining available benefits as well as any changes. We can have the best benefit package in the business, however if our employees and potential new hires don’t know about them or how to take advantage of them, then they are doing no good for anyone.

Bibliography

Dash Burst. (2015, December 3). How Important Are Employee Benefits when Recruiting? Retrieved from Small Business Trends: https://smallbiztrends.com/2015/12/employee-benefits-recruiting.html

IRS. (2016). IRS Publication 15B. Retrieved from IRS.gov: https://www.irs.gov/pub/irs-pdf/p15b.pdf

Robert Half. (2016). Employment Benefits Are a Key Aspect of Any Job Offer. Retrieved from Robert Half: https://www.roberthalf.com/job-seekers/career-center/negotiating-a-job-offer/employment-benefits-are-a-key-aspect-of-any-job-offer