Navigating Benefits

How to Increase the Value of Benefits by Adding or Subtracting Plans


  • Only 30 percent of employers use people data to calculate the costs, impact and ROI of the benefits they offer


  • Pulse surveys can uncover why employees are not taking full advantage of their employer benefits


  • Employers can save on health care premiums through tax breaks and wellness programs


Posted by April 17, 2019

The value of benefits offered to employees can be a bit of a challenge to determine at some organizations. Plan administrators select benefits that they think will appeal to current and future employees while also maintaining costs. But oftentimes, getting employees to participate in the benefit plans throughout the year can become a challenge, making it even harder for plan administrators to calculate their true return on investment.

According to a survey by Employee Benefits for Equiniti, only around a third of employers use people data to calculate the costs, impact and ROI of the benefits they offer. However, when the value of benefits is constantly under scrutiny, administrators need to know when one is still worth carrying—or if it’s time to replace it with something else.

Why ROI Matters in Employee Benefit Programs

According to the Society for Human Resources Management, the Cleveland Clinic spends a great deal of time and money supporting the health and well-being of its 49,000 employees. And it appears the clinic is getting its money’s worth, as its costs of total health care spending dropped 2 percent last year.

Additionally, most of the clinic’s programs were reported to be performing well compared to competing health care centers. But, the organization is quick to point out that it’s nearly impossible to measure the ROI of some aspects of wellness.

Calculating the ROI of Benefits

So, how can benefits administrators better understand how the investments are paying off? Here three ways to better determine the value of benefits offered to employees.

1. Connecting People Analytics Across the Organization

Companies have access to a great deal of data gathered from various sources, such as benefit informatics and productivity rates. Reviewing this data can seem overwhelming, but it’s necessary. Connecting the data points—such as use of benefits, frequency of doctor’s visits, emergency room use, hospitalizations and prescription drug use—can allow organizations to learn more about how and when employees are using their medical benefits.

Other benefits like paid time off should be easy to navigate by looking at time tracking data. The information about costs, usage, results and beyond can be used to compile a report that evaluates the true ROI of each employee benefit.

2. Seeking Feedback

It’s important that administrators stop guessing (and start asking) about the benefits employees value most. A pulse survey can effectively identify which benefits staff value, and give team members a platform to explain why they don’t use others. Next, time must be set aside to research their most favored and disfavored benefits.

Bad benefits are the leading cause of employee dissatisfaction, according to a report by the Conference Board. Because of this, it’s important to consider all the facts—and ultimately drop benefits that have become useless or unpopular. In a nutshell, employees want benefits that are valuable, and this feedback can help organizations craft packages that the workforce will truly appreciate.

3. Understand the Difference Between Value and ROI

The value of benefits is something that each employee must determine: One benefit may be attractive to some employees, while completely useless to others. For instance, those planning for families may appreciate paternal leave benefits and ample sick time, while healthy and single employees may instead favor gym reimbursements or sabbatical options. Figuring out what the larger workforce values is important when adjusting benefits packages.

In terms of ROI, for every dollar spent on benefits for an employee, an employer ends up with additional tax savings and revenues. For example, the tax savings for contributing to Workers’ Compensation premiums and payroll tax can reduce the net cost to 70 cents per employee. Wellness programs can also provide added savings. A study on wellness programs by the RAND Corporation indicated that companies that take part in these programs saw less absenteeism and reduced health care costs overall.

With this data and feedback in hand, organizations will better able to gauge the true value of benefits programs and make informed decisions moving forward. For more information about designing benefits for success in 2019, review United Concordia Dental’s in-depth guide.

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