The Dangers of Getting Caught-up with the Competition

The dangers of getting caught-up with the competition. Many companies, especially those in competitive industries, can feel the pressure to match—or exceed—the benefits programs offered by competitors. And with costs continuing to rise, and employees expecting more, it’s easy to see why. But, the most valuable employee benefits programs are often ones that are tailored for the workforce it’s in place to support.

As the economy changes, what employees value in the workplace can shift. For example, as the global economy moved towards remote and flexible work during the COVID-19 pandemic, companies had to adapt. Demand for remote communication and collaboration tools such as Zoom, Google Meets and Slack, saw massive growth. This shift created new demands on both employers and employees, pushing companies to make changes to their benefit programs.

An interest in flexible work benefits including internet reimbursements or child care assistance and an increase in mental health support and wellness programs were seen across the country. In response, a recent Mercer report found over 90% of large employers “strengthened their coverage for mental health care, increased support, or put in place new programs or systems.” The changes that companies made varied, some chose to add telehealth options while others expanded existing mental health coverage. This change in the economy—the shift from remote and hybrid work—had a direct impact on employee benefits by prompting organizations to tailor their offerings to fit the new work environment.

A focus on long-term gain.

While the response to the pandemic was seen globally—forcing many companies to adjust quickly—other changes can occur slowly over time and can be unique to individual workforces. For example, a company whose workforce is approaching retirement, or a company that begins to hire employees with young families may need to make adjustments to cater to these needs.

Competing with other companies or altering a program based solely on benchmarking can create short-term solutions that mask the long-term success of the program. Additionally, continuing to compete with similar industries year after year can result in several unintended consequences such as:

• Unsustainable costs. Continuing to offer more attractive benefits to stay competitive can cause costs to progressively increase over time. Eventually, benefits can become unaffordable for the business—and its people.
• Misalignment with company culture. Too much emphasis on matching a competitor’s benefits programs can risk losing sight of a company’s core values and culture. Staying true to company culture and following a benefits mission plan can have a lasting impact on employees.
• Choice overload. Some employees may become overwhelmed by the number of offerings, unsure of which ones are valuable or necessary, which can lead to underutilized offerings.

By taking a deep dive into your benefits plan and developing a program that aligns with your company’s values and goals you can create an affordable program that your people can get excited about. Your advisor or consultant can help you take your program to the next level by identifying problems and offering appropriate solutions. If they aren’t doing this for you, consider getting a second opinion.

Follow-up with employees now.

Following open enrollment can be a good time for employers to assess the effectiveness of their programs. Employees have just finished making their selections and their benefits are likely top of mind. Conducting employee surveys now can generate honest answers about their experiences. What they liked, what they didn’t like, and what they would prefer to have. Concluding open enrollment with a survey can also provide a needed opportunity for employees to voice their opinions.

Understanding industry trends is important, but it shouldn't dictate your strategy. Creating a unique benefits program based on the needs of your people can generate higher morale, enhance productivity, and build company culture. Knowing who your employees are and what they need is essential.

If you would like to discuss your benefits program, reach out today.