While salary is usually the number one consideration, a good benefits package is still a major factor to job applicants.
“Benefits are very important,” said Barry Burks, a benefits consultant and shareholder with Ross & Yeager Insurance, Jackson. “They play a crucial role in both attracting and retaining the best employees. I think the primary reason for this is the importance of good benefits is understood by employees today. They realize how costly it would be to pay for benefits themselves.”
From the employer’s perspective, it is important to balance having good benefits with affordability. That has been difficult particularly in the past decade as increases in the cost of health insurance have outpaced the consumer price index.
“We continue to see double digit premium increases,” Burks said. “Health benefits remain one of the most important components of the entire employee compensation package. But health care costs and consequently health care premiums have been increasing for the past decade and that is causing enormous strain on employers. Employees want to provide benefits to current and future employees, but it is becoming increasingly difficult to do so and still maintain a profit.”
As a result of the rising cost of health insurance, employers are eager to embrace innovative strategies. Burks said one popular option is a high deductible plan with a potential Health Savings Account option. He said that hasn’t grown as much in Mississippi as other regions in the nation, but it is catching hold.
“Other strategies include introducing more consumer driven plans which put the money and the choices back in the hands of employees, improving employee education, and influencing positive behavior changes through condition management and wellness programs,” Burks said. “And if I was going to highlight any one of those I would say the emphasis is and should be on the health and wellness of the employees. In companies where the employee’s health is valued, both the employer and the employee benefit. Our focus and the message we are trying to take out to prospects is that employers need to get involved in health and wellness initiatives for employees. That is probably where the most traction is going to be made in the future.”
In addition to some of the more innovative trends, employers are still using traditional measures like cost shifting more of the premiums that employees must pay and reducing benefits through plan design changes.
“That is still being done at each and every renewal,” Burks said.
It is frequently reported in the media that the nation is in a health care crisis. Mississippi has one of the highest rates of obesity, heart disease and diabetes in the country. Since there is a direct correlation between an employee’s health and an employer’s cost, employers have a big incentive to encourage wellness.
A strategy that can help with employees appreciating their benefits is an annual employee benefits statement. It increases job satisfaction for employees to know how much the company is paying for their benefits.
“A small investment in benefit communication has a significant payback in employee satisfaction and retention,” Burks said.
Benefits are so significant they are sometimes referred to as “the hidden paycheck,” said Becky Vaughn-Furlow, executive vice president and human resources director for Trustmark.
“The benefits package paid by the employer can often boost the salary offered by an additional 20% to 30% when all other benefits/perks are added in, for which the company foots the bill,” Vaughn-Furlow said. “Medical/health benefit plans are expected as benefits for any job with a company and potential candidates are looking more closely at the various offerings included, i.e. medical and its deductibles, co-pays, etc., but most importantly premium costs to the employee. Vision, dental, life and other plans are important but secondary to the primary medical plan provided.
“Large employers on the cutting edge are beginning to pursue in-house medical clinics as a means to offer free medical services to their employees and immediate families, which with a large ‘captive’ workforce can reduce escalating medical plan costs to employees and employers, alike, as well as the convenience factor which reduces time off for office visits and ‘minor med’ type medical needs.”
She adds that group long-term care is becoming more important to Baby Boomers who will continue working longer than their parents, especially those who now are having to provide care to aging parents.
Other benefits of most importance to people include 401(k) plans to save for retirement that have the employer matching employee contributions. And vacation and leaves of absence for sickness, family needs and other reasons are all higher priorities with a growing population of Gen X and Gen Y workers who value leisure time more than their Baby Boomer parents and grandparents.
Vaughn-Furlow is seeing more companies place emphasis on wellness programs with health fairs offered at no charge to employees, discounted memberships at fitness centers, and smoke-free work environments. And subsidized meal services to a work force which works longer hours and has less time to prepare food at home becomes more important to a worker who can get two healthy meals a day at a low cost at work without ever leaving the building.
Michelle Daniels, staffing division director for The CPI Group, Columbus, agrees alternative types of benefits are now in vogue.
“Benefits have morphed into more than insurance, vacation and holiday pay,” Daniels said. “Benefits can also be housing assistance, tuition reimbursement, wellness packages or an onsite workout facility. Employers might want to look into some of those more unusual but good benefits that are becoming mainstream for some companies.
“Benefits can be intangible, for example, a flexible work schedule. That can be important to someone who wants to come in earlier and leave earlier. We work for a paycheck, but we also want to feel we are working to be part of something more than we are as individuals. It is important the employers and supervisors make sure that they convey appreciation for the work done. If that piece is missing, it may not matter what the benefit package is. The person may not have the overall job satisfaction to retain. For that person to have the most job satisfaction, everything has to be in place. Having pride in their work and what they are doing, and feeling appreciated, are very important.”
Employers can even consider customizing the benefits package if necessary to retain key employees.
Ed Buchanan, division manager for MWG (Morgan White Group) Marketing, Jackson, said the importance of benefits was illustrated a few years ago when independent motel owners on the Gulf Coast became interested in offering benefits because they were losing so many employees to casinos with good benefit packages.
“Employers realize if they want better employees, they have to provide good employee benefits,” Buchanan said. “The cost of major medical has been constantly creeping up and sometimes more than creeping, it is racing. Employers struggle to be able to pay the premiums many years. As that happened, the employers become less willing to pay for ancillary benefits like dental, life, long term, vision, long and short term disability, and long term care.”
Dental has been a very popular benefit for many years. MWG Marketing considers it the second most important benefit behind major medical.
“People have one set of teeth and need to take care of them,” Buchanan said. “Teeth do best with regular care. Vision is also becoming very important. Short- and long-term disability insurance provides income for disability. Term life insurance is inexpensive and frequently offered in groups. Long-term care is a less popular product, but it is becoming more important.”
As a consequence of the aging population, more people are in need of Medicare supplement insurance when they retire. Ryan Eaton, manager of the senior division, MWG, said when people retire from group health insurance, MWG helps them enroll in Medicare supplement programs.
“We make sure to put people with A-rated insurance carriers with the lowest prices,” Eaton said. “As far as the Part B prescription drug plan, to help people find the best drug plan we have a plan prescriber on the Morgan White website. Wal-Mart, CVS and Rite Aid also have the same program. It is the best way for seniors on Medicare to find which Part B drug plan is best for them. There are so many agents out there right now just trying to sell policies to make a quick buck that it has gotten sad.
“A lot of Medicare Advantage plans are being sold, and a lot of doctors don’t accept those plans. That is where we come in to help individuals with problems. Prescription drug plans change every year. If you don’t compare, you won’t know what drug plan is the best for you. That is why you need this prescription system to find out which one is best for you.”
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.
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