Are the benefits you offer your employees competitive?
As 2020 comes closer to an end, you need to start thinking about your practice's year-end budget review and planning for fiscal year 2021. During this process, you may be looking at areas where costs can be better controlled, and spending can be trimmed. A lot of companies’ areas of focus include their expenses, company benefits, and employee compensation. If your practice’s health insurance program coincides with your year-end review, that means Open Enrollment is just around the corner and you may want to consider evaluating where your company’s benefits measure up to the competition.
Although your employees may seem happy with their current benefits package, it is highly recommended to periodically review for how it stands in the current market. In regard to what to measure, it is important to focus on the three main areas: employer and employee costs, coverage, and plan type and design.
According to Tricore, the two most effective ways to ensure your company’s benefits package is competitive are:
1. Examine the current market
Utilize insurance brokers to evaluate the local and current market. Brokers have access to data where your company may lack. In addition, by utilizing an insurance broker, you may have the opportunity to have them negotiate on behalf of your organization with various insurance companies in which they have relationships.
2. Conduct external benchmarking
Although examining the current market may seem like just enough information to stay competitive, external benchmarking is a vital data collection process that may contribute to the retention of your employees. External benchmarking provides a means to evaluate how successful you are doing as a company regarding the benefit package you offer. It is recommended to aim for at least five competitors to analyze that have qualities similar to yours. This may include industry, business size, number of employees, and geographic location. If you have an MGMA membership, take advantage of the Data Dive feature offered on their website to conduct benchmarking for your medical practice's employees.
In addition, you may want to take advantage of public records such as Forms 5500 and 10-K filings. These documents provide information pertaining to a company’s benefit information and are easily accessible through the U.S Securities and Exchange Commission website (sec.gov).
By examining the current market and conducting external benchmarking, you set your company up for success by ensuring you offer a competitive benefits package and perhaps be inspired to offer alternative benefits other companies offer where yours doesn’t. These benefits may include an Employee Assistance Program (EAP), stipends for wellness, and financial planning workshops.
Although monetary compensation plays a key role in where and what position a person chooses to accept, the United States workforce is displaying a shift and a company’s benefits package is increasing in it's effect on whether a potential candidate decides to accept an offer, or a current employee chooses to look for employment elsewhere.