Develop a brief overview of the company that includes the organization’s vision, mission, and values. Identify a minimum of three mandatory employee bene

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How to Design an Employee Bene�ts Program

Managing employee bene�ts is an important and costly endeavor for employers. Though most employers are required to provide

mandatory bene�ts such as Social Security contributions, worker's compensation insurance and unemployment insurance, most other

bene�ts are voluntary in nature and determined by the employer. Bene�ts programs vary greatly, but typically they include medical

insurance, life and disability insurance, retirement income plan bene�ts, paid-time-o� bene�ts, and educational assistance programs.

Bene�ts selection and design are critical components in the total compensation costs. In some cases, bene�ts account for 40 percent or

more of total compensation costs. Due to the employer cost investment and the importance of employee bene�ts in recruiting and

retaining, employers should have a well-thought-out bene�ts plan design that meets both employee needs and employer objectives.

Step 1: Identify the Organization's Bene�ts Objectives and Budget

An important �rst step in designing an employee bene�ts program is to identify its objectives. This will provide overall guidance in

establishing the selection and design of the bene�ts program. Generally, this process does not result in a list of speci�c bene�ts o�ered but

rather provides an overview of the organization's objectives of o�ering bene�ts that re�ect both the employer and employee needs. The

organization's business and/or HR strategy will help guide the development of the bene�ts objectives, as these objectives should help

achieve the overall strategic goals. Factors such as employer size, location, industry and collective bargaining agreements should be

considered in the development of the bene�ts objectives. Some employers choose to have general bene�ts objectives, whereas others

incorporate the objectives in their total compensation philosophy. The bene�ts objectives are not static and should be evaluated and

revised to re�ect the current employer strategy and employee needs.

Sample objective: To establish and maintain a competitive employee bene�ts program based on employees' needs for paid time o� and

protection against the risks of old age, loss of health and loss of life.

Equally important is determining the budget available for spending on bene�ts, as most employers have cost constraints in o�ering

bene�ts to employees. If a current bene�ts plan exists, organizations should analyze current bene�ts costs and projected costs and create

a budget spreadsheet outlining annual bene�ts costs. The rising cost of o�ering bene�ts such as health insurance will greatly a�ect the

bene�ts an employer may o�er.

If there is no current bene�ts program, the employer may need to obtain quotes for a few key bene�ts to estimate a bene�ts budget. A

bene�ts broker (www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/selectingabene�tsbroker.aspx) may be helpful in this

process.

Step 2: Conduct a Needs Assessment

A needs assessment should be conducted to determine the best bene�ts selection and design based on the needs and wants of the

employees. The needs assessment may include an employer's perception of employee bene�ts needs, competitor's bene�ts practices, and

tax laws and regulations. But a more recent trend is to take a market research approach to employee bene�ts planning. Common market

research techniques include employee inquiries in the form of personal interviews, simpli�ed questionnaires or sophisticated research

methods. Although employee feedback will most likely result in higher employee motivation and satisfaction with the bene�ts package, this

is true only to the extent that the employer is committed to using the feedback in bene�ts selection and design.

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If a current bene�ts plan exists, the employer may also conduct a utilization review of each plan to determine actual employee use.

Knowing the frequency a particular bene�t is used and to what extent may help the employer determine cost-saving design practices. For

insurance plans such as a medical plan, the carrier will often provide a utilization review for the employer.

Organizations should analyze the existing workforce demographics to assist in determining the needs of various categories of employees.

Younger employees may value paid time o� more, whereas older employees may place a higher value on retirement income plans.

Employers can analyze the needs assessment results and compare them with any existing bene�ts and against available bene�ts to

prioritize which bene�ts will be most helpful in achieving the objectives of the bene�ts program.

Employers will also need to consider any legal requirements regarding bene�ts o�erings. Some employers may have obligations to o�er

bene�ts by law, such as the A�ordable Care Act, which requires employers with 50 or more employees to choose to provide a�ordable

health insurance to employees or pay a penalty. Employers will need to determine if they are covered by this act and the impact this will

have on the decisions and design of employee health insurance plans.

Another consideration is that of bene�ts for domestic partners. Since same-sex marriage became legal in all 50 U.S. states as of the

Supreme Court ruling on June 26, 2015, some employers may choose to no longer o�er bene�ts to domestic partners, unless required to

do so by state or local law.

Paid sick leave is another bene�t that is quickly becoming a mandatory o�ering for many employers. State and local laws are regularly

being passed that require employers to o�er paid sick leave to employees, and employers should be aware of state and local

requirements.

Step 3: Formulate a Bene�ts Plan Program

Once the needs assessment and gap analysis are complete, the employer will need to formulate the new bene�ts plan design. Using the

data collected from all resources in Step 2, the employer can begin to formulate bene�ts o�erings in order of priority. Then the employer

will determine the cost of providing the prioritized bene�ts and evaluate it against the bene�ts budget.

This step is complex and may take many factors into consideration: Can changes be made to the current plan design to induce cost

savings? Can bene�ts that are underused or not valued by employees be eliminated? What are the administrative costs for the bene�ts?

What cost-containment features can be put in place? Will employees have to contribute, and how much? Are there resources to administer

in-house, or will a third-party administrator and broker be necessary for certain plans? These are among the evaluations an employer will

make in determining whether to add, change or eliminate bene�ts o�erings.

Step 4: Communicate the Bene�ts Plan to Employees

The communication strategy is a critical component to the bene�ts planning and management. Some resources and samples are available

to assist employers. See Communicating and Leveraging Bene�ts (www.shrm.org/resourcesandtools/hr-

topics/bene�ts/pages/communicating-leveraging-bene�ts.aspx).

Employee understanding of the bene�ts is critical to employee buy-in. Without buy-in, the employer's e�orts, no matter how perfectly

designed to meet employees' needs, may be futile. If employee input was obtained and used in the bene�ts design process, employers

should be sure to share this with employees and let them know how their feedback in�uenced the bene�ts program's design. The positive

impact on recruiting, retention and employee morale may be lost without e�ective communication plans. Although the employer is

obligated to provide communications to comply with laws regarding disclosure of various bene�ts plans, such as a summary plan

description, communications should go beyond the legal requirements. Good bene�ts communication objectives should include:

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SHRM provides content as a service to its readers and members. It does not o�er legal advice, and cannot guarantee the accuracy or suitability of its content for a particular

purpose.

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Creating awareness and appreciation of the new or existing bene�ts and improving employee �nancial security.

Providing a high level of understanding of the bene�ts o�ered.

Encouraging wise use of bene�ts.

Step 5: Develop a Periodic Evaluation Process to Determine E�ectiveness of Bene�ts

Periodically reviewing the bene�ts plan program is another important step in the bene�ts management process. The bene�ts program must

be assessed on a regular basis to determine if it is meeting the organization's objectives and employees' needs. Changes in the business

climate, the economy, the regulatory environment and workforce demographics all create dynamics that a�ect bene�ts o�erings.

Employers should consider developing goals and measurements to assess the bene�ts programs and make adjustments as necessary.

Employers may also consider using external trends and benchmarking data to evaluate the e�ectiveness of the bene�ts plan or conduct

employee surveys or a full-�edge needs assessment on a recurring basis.

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2/22/2021 What is the difference between mission, vision and values statements?

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What is the di�erence between mission, vision and values statements?

Each statement may be part of the strategic planning process but have a di�erent objective. These statements may be written for

organizations or for individual departments.

A mission statement is a concise explanation of the organization's reason for existence. It describes the organization's purpose and its

overall intention. The mission statement supports the vision and serves to communicate purpose and direction to employees, customers,

vendors and other stakeholders. See SHRM's Company Mission Statement Examples (www.shrm.org/resourcesandtools/tools-and-

samples/policies/pages/missionstatementgeneral.aspx) for a variety of samples. Questions to consider when drafting mission statements

could include:

What is our organization's purpose?

Why does our organization exist?

A vision statement looks forward and creates a mental image of the ideal state that the organization wishes to achieve. It is inspirational

and aspirational and should challenge employees. Questions to consider when drafting vision statements might include:

What problem are we seeking to solve?

Where are we headed?

If we achieved all strategic goals, what would we look like 10 years from now?

A values statement lists the core principles that guide and direct the organization and its culture. In a values-led organization, the values

create a moral compass for the organization and its employees. It guides decision-making and establishes a standard against which actions

can be assessed. These core values are an internalized framework that is shared and acted on by leadership. When drafting values

statements, questions to consider might include:

What values are unique to our organization?

What values should guide the operations of our company?

What conduct should our employees uphold?

In conjunction with a values statement, a code of ethics puts those values into practice. It outlines the procedures in place to ensure the

organization's values are upheld. Questions to consider when creating codes of ethics might include:

What are common ethical issues in our industry?

What should someone do if he or she sees a violation of our values?

Management cannot create a new values statement or ethics code and expect immediate change. For an organization to have an e�ective

values statement, it must fully embrace its values and ethics at all levels of the company and use them daily to guide its attitudes, actions

and decision-making. Refer to What does it mean to be a values-based organization? (www.shrm.org/ResourcesAndTools/tools-and-

samples/hr-qa/Pages/whatdoesitmeantobeavalues-basedorganization.aspx) for more information.

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purpose.

Disclaimer (www.shrm.org/about-shrm/Pages/Terms-of-Use.aspx#Disclaimer)

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https://www.employmentlawhandbook.com/resources/government-mandated-benefits-compliance-

guide-for-2020/

Government-Mandated Benefits Compliance Guide

for 2020 In the United States, employers are legally required to provide certain employee benefits. The U.S. Bureau of Labor Statistics (BLS) defines them as benefits that facilitate the provision of retirement income and medical care, lessen financial burdens following job loss or disability, and provide coverage in the event of workplace injuries and illnesses.”

The following is a comprehensive look at the benefits U.S. employers must provide in accordance with local, state and federal law this year.

Social Security, Medicare, and Federal Insurance

Contributions Act (FICA)

In accordance with federal law, employers and employees must both contribute to funds used to underwrite Social Security and Medicare. To comply, a certain amount of tax is withheld from the employee’s gross earnings and the employer must pay that amount. The amount is calculated based on specific formulas using the Social Security tax rate (6.2%), the Medicare tax rate (1.45%) and the employee’s gross earnings.

Workers compensation

This is insurance that employers must provide for workers to access in the event of a work-related accident or illness. Most employers provide this insurance through the official program administered by the state. However, this is not mandatory. As an employer you may also be able to provide this insurance through commercial insurance or through a self-insurance program.

Disability insurance

As of 2019, five states and one U.S. territory mandated that employers provide limited (short-term or temporary) disability insurance. These insurance plans allow for some income replacement if workers need to take extended time off for non-work related injuries, illnesses, childbirth and recuperation from childbirth. As an employer, you must provide this type of insurance in:

 California  Hawaii  New Jersey  New York  Puerto Rico  Rhode Island

Family and medical leave

In accordance with applicable laws, private employers with at least 50 workers and all public sector businesses must make the following available:

 A maximum of 12 weeks;  Of job-protected, unpaid leave;  During a 12-month period;  To be used for qualifying family and medical reasons; and  To handle qualifying emergencies.

In this context, qualifying family and medical reasons include the birth and care of the employee’s child; foster care or adoption of a child; care for an immediate family member (defined as a parent, child or spouse) with a serious illness or injury; or care for the employee’s illness or injury (as long as it is serious). Furthermore, employers that meet the criteria listed above must ensure that their employees keep their group health benefits while they are on family or medical leave.

The businesses as well as described above must also provide:

 No more than 26 workweeks of unpaid, job protected leave;  In a single 12-month period;  In accordance with the Military Caregiver Leave.

Health insurance

While smaller businesses do not have to offer health insurance, most do as a matter of course. For larger businesses – those with 50 or more full-time employees, including full-time equivalent employees – the Affordable Care Act (ACA) provides extra incentive for providing this benefit. This is because failure to do so puts them at risk for potential assessment if they do not offer sufficient and reasonable coverage to their full-time employees and their dependents.

*The preceding information is presented as a general guide for U.S. employers. Requirements may vary based on the size of your business and where it is located. Consult a qualified employment lawyer in your area for specific information about legally mandated and discretionary benefits.

Top Employee Benefits Author: Contributors Details: Last Updated: Tuesday, 20 October 2020 https://www.money-zine.com/career-development/finding-a-job/top-employee-benefits/

When employers talk about an employee's total compensation package, they oftentimes include the expenses associated with providing benefits. These are the on and off-the-job perks that companies provide at little or no cost to the employee.

In this article, we're first going to provide an overview of employee benefits programs, and why it makes sense to offer them to employees. Next up, we're going to talk about mandated versus optional benefits programs. Then we're going to finish up by providing a variety of statistics, including the most common benefits offered today, as well as those employees value the most.

Employee Benefits Programs

The objective of a good employee benefits program is to help protect both employees and their families from the possibility of severe economic hardships caused by illness, disability, loss of life, or unemployment.

A comprehensive employer program will also provide retirement income for the employee and their family, as well as suitable assistance such as paid time off from work.

Administering and Selecting Programs

Employers consider the cost to provide and administer benefits plans an integral part of the total compensation package offered to its employees. While these benefits programs are typically managed by employers, oftentimes employees are asked to contribute small premiums or copayments to enjoy the added coverage.

Employers offer benefits to employees for one or more of the following reasons:

 Attracting and retaining a talented workforce.  Aligning benefits packages with competitive offers in the marketplace.  Promoting higher levels of morale among employees.

 Providing opportunities for promotion or advancement as workers resign, retire, or move to other positions within the organization.

Keep in mind that no single program can provide for the needs of all employees, it is usually a combination of benefits that is most effective in meeting the employer's objectives. That being said, there are two broad categories of benefits offered by employers in today's work environment: mandated and optional.

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