Set Up Alternative Benefits Packages
Alternative benefits packages are plans or services that differ from traditional benefits options. Your business might set up non-traditional benefits packages to attract and retain sought-after employees. These packages may include higher quality health coverage, extended time off, discounted gym memberships, or other benefits. Your alternative benefits package should support your company's goals, such as creating a happier work culture or improving employee health. Remember to comparison shop to find the best price and consider lower cost alternatives.
Identifying Possible Alternative Benefits
- Assess whether to expand your benefit options. The most common “alternative” benefit packages simply provide employees with a greater menu of options for health and dental insurance or retirement plans. You should take out your current policies and assess whether you want to expand the options available:
- For example, you might already offer a defined benefit pension. You could also create a defined contribution plan as an alternative.
- Instead of traditional health insurance, you can offer employees health savings accounts. Employees park money in these accounts tax free and withdraw money tax free for eligible reasons. They can also invest the money in stocks or mutual funds.
- Consider different work options. One benefit that won't cost you anything is to be flexible with an employee's work schedule. Consider any of the following:
- Remote work. You can let employees work from home when they don't need to be in the office. This will help your employees stay engaged, and also show that you trust them.
- Compressed work week. Offer an employee the option to work four 10-hour days, or to compress the work week in different ways.
- Flexible schedule. If possible, you might let employees set their own hours.
- Help your employees to be active. Other good alternative benefits will encourage your employees to remain physically fit. For example, you might offer the following benefits:
- Gym discounts. A gym might offer your company a discount for employee memberships.
- Sponsored recreational league. Set up a rec league for your employees.
- Onsite gym. It might be more affordable to set up your own fitness center for employees to use.
- Offer more time off. You can increase the amount of leave that you give employees, which is usually a popular benefit. See if you can offer any of the following:
- Time off to volunteer. Most people who want to volunteer don't have the time to. Employees might appreciate paid time off to volunteer in the community.
- Vacation or sick time without guilt. Employees may not want to use time off out of fear of getting laid off or because of guilt. Encourage employees to use their time.
- Personal days. Some employees feel uncomfortable lying about being sick but don't want to use vacation time in order to have a day off. You can encourage them to take time off by giving them “personal” days, which can be used for any reason.
- Company holidays. Choose a couple non-holidays and call them “holidays.” Close the office and give everyone the day off.
- Sleep breaks. New parents in particular might welcome a sleep break at the office. Your employees will revive and finish the workday with increased energy.
- Think of how to make the workplace friendlier. Employees might appreciate attempts to make the workplace less stressful and more comfortable. Think about offering any of the following:
- Encourage employees to bring pets. Letting people bring their dog into work can reduce their stress load.
- Let employees dress casual. Although this might not be ideal for employees who deal with the public, you could let back-office employees dress casually.
- Identify other insurance you can offer. You probably are already offering employees health, dental, and possibly vision insurance. However, think about offering the following:
- pet insurance
- critical-illness insurance
- supplemental life insurance
- travel insurance
- Offer ways for employees to improve themselves. An employee might be more willing to take a job if they think they can improve their skills and knowledge. Consider offering the following as part of an alternative benefits package:
- Tuition assistance. Reimburse your employees for any classes they take at a local college or university.
- Professional development. You can encourage employees to stay up on recent developments by hosting seminars or subsidizing employee attendance.
- Employee Assistance Program (EAP). You can set up an EAP for employees to contact if they need help dealing with occupational stress, substance abuse, gambling addiction, financial distress, or other issues.
- Consider your objectives. Alternative benefits can help you compete for talent. However, they can also help you build the business culture that you want. Think about your objectives in offering alternative benefits.
- For example, if you want a workplace where people engage more, then you might offer a discount employees can use in your cafeteria. Or you might stock the break room with coffee and pastries in the morning to encourage people to congregate there.
- You might also plan a company garden. Give employees time off to work on the garden and let them take the produce home. This is a great way to improve health and let employees recharge emotionally.
- Ask your employees what they want. Nobody knows what your employees or potential hires need like they do. Distribute a survey for employees to fill out or ask them in interviews what they want.
- Remember not to ask employees about their health conditions, which is illegal. Also avoid asking about the employee's family's medical history.
- To make sure your survey doesn't break the law, run it by your lawyer first.
Researching the Costs
- Obtain quotes. To provide cost-effective benefits, contact different providers and get quotes. You'll want to compare prices. If necessary, you might need an employee benefits consultant to help you.
- Alternately, you can outsource to a professional employer organization (PEO). A PEO buys benefits for many companies, so they can get the discounts that a larger company would get.
- Perform a cost-benefit analysis. Sit down and check whether or not it makes sense for your company to offer the benefit. For example, you might want to offer discounted gym memberships. You should estimate the number of employees who will select the benefit and multiply that number by the cost.
- Now consider whether you can afford to spend that amount. Also consider any savings you might realize if your employees' health improves and they miss fewer days of work.
- Another benefit might be retaining key staff. Employees might leave to work for a competitor who offers an important benefit you don't.
- A cost-benefit analysis is more of an art than a mathematical formula. However, you should have a sense of how important potential benefits are to your employees based on your survey data and interviews.
- Find cheaper alternatives. Some perks might be out of reach, especially if you are small business with a limited budget. However, you can find alternatives that will still satisfy your employees and accomplish your objectives.
- For example, you might not be able to create an on-site cafeteria. However, you could cater a meal once a month for the entire office. Doing so will allow your team to come together and bond.
- Also considering paying for a benefit by offering to trade your services. For example, if you run a marketing company, a small restaurant might be willing to host a company meal in exchange for free marketing services.
- Present the plan to your employees. Before implementing your alternative benefits package, present the list of potential benefits to your employees and gauge their reaction. Ask for feedback, which will allow you to further adjust the plan if necessary.
- Contact providers only after you confirm that employees are enthusiastic about the benefits.
- You'll also need to update your compensation plan to account for the added benefits.
- Remember to meet with recipients to answer their questions. They may be confused about details, so let them ask questions. Clarify how the benefit will work.