Benefit Strategy: Keep, Cut, Create, and Communicate!
If you are exploring a merger in 2023, you will need to carefully consider the implications on your employee benefits package. A benefits package is a great way to demonstrate how much you value your employees. An effective benefits strategy is one that meets your employees’ needs while staying within your budget. A great benefits strategy combines employee needs, business needs, and aligns with your culture. If a merger isn’t in your future, it’s still important to reevaluate your benefits package regularly and remember to balance employee needs with the organization’s culture and budget.
When determining if a particular benefit should survive the merger or overtake a comparable plan, you need to compare plans in the context of the mission and culture of the new nonprofit organization. When comparing plans, you will find some overlap, but you’ll also likely discover some new and unique offerings you need to assess.
When benefits overlap, keep the more generous option so employees perceive the change as positive. If there is a benefit plan that only one organization is offering, you’ll need to assess the usage and how well it fits into your new strategy.
If the usage is strong, the next step is to make sure the plan aligns with the culture of the new organization. For example, if you want to promote a culture of learning and growth, keep your professional development and education benefits. If you value service to the community, continue offering paid time off to volunteer to employees in the new organization. If a benefit aligns well with your culture, but isn’t well used, you likely need to better communicate its availability to your employees.
If the usage is strong, but the benefit conflicts with your mission or culture, try to increase or alter the benefit to be a better fit. Some examples of misaligned benefits might be a healthcare organization without mental health benefits, an educational institution without tuition reimbursement or student loan assistance, or a credit union without a homebuyer assistance program. Can you increase the benefit or offer better coverage? Can you lower the premiums, cover more of the cost, or offer better terms? In any of these circumstances, remember to find the overlap between what matters to your team and to the organization as a whole.
If the benefit is not well used, you should consider sunsetting the plan and trying something new. Benefits are typically one of your largest expenses, so don’t waste your budget on something employees don’t value. If you’re going to eliminate a benefit you’ll want to avoid the perception of loss, so determine your budget, evaluate a few new benefits that align with your budget and mission, and poll your team about which plan they prefer.
When comparing plans in the context of your culture, you might also find you have some gaps or unmet needs. You may also identify cost savings from eliminating a duplicative or underutilized benefit. This is the perfect situation to launch a new benefit. Make sure that any new addition to the package meets an actual need, not a perceived need. To do this you need to ask employees what they want. Research shows that employees today want more personalization and flexibility in their plans, so you might start by getting creative with your existing offerings. Can you offer a choice between a PPO and a high deductible plan, but contribute the difference in premiums to an HSA for employees who elect the HDHP? Can you offer employees a choice between a back-up daycare benefit provider and a Dependent Care FSA? Can you offer a choice between elder care assistance, childcare assistance, or pet daycare benefits to meet changing needs throughout the employee’s life? Can you offer a choice between an extra week of PTO and a sabbatical after five years of service? Whatever you choose to offer, remember to ask yourself: What matters to my people? What matters to my organization? What’s our mission? What’s our culture?
Once you determine which benefits will deliver the most value, you need to communicate, communicate, communicate. In a merger, your employees need to be reassured that their package is the same or better than before. If you added or changed a plan based on their direct feedback, make sure you demonstrate that you listened and heard them. Employees don’t always understand the full menu of offerings available to them or how to get the most from their plan, so don’t be afraid to over-communicate. There’s no such thing when it comes to demonstrating how much you value them - especially in a tight labor market.