In this article, you will learn about companies' common mistakes when structuring their employee benefits package. These mistakes come in the form of neglecting to offer some or all of the following aspects: health insurance, dental care, life insurance, long-term disability coverage, and retirement income.
#1 Not Offering Health Insurance
This mistake occurs when a company does not offer health benefits to its employees. This is more common with small startups trying to avoid monthly premiums because they do not believe that they can afford them. But this is not a good reason for not offering health insurance. While it is true that it may be difficult to get a health insurance policy for a small company, most health insurance companies will work with you to come up with a plan.
#2 Performance Evaluations Mistakes
A company may fall into the trap of offering performance-based benefits to its employees. These are great if they are designed well, but a big problem can be how people use them. Most people in the workforce these days have a strong tendency to either overuse them or not gain enough benefit from them. This can be detrimental and lead to resentment from both sides. If a company makes mistakes in how they go about executing performance-based benefits, it will probably see negative employee sentiment about it.
#3 Making Benefits Contributions Too High
Even if a company offers all of the above employee benefits, it can still make mistakes in the amount of money it contributes to them. This is especially important when it comes to health insurance. Many companies are required by law to offer health insurance to their employees but also require that they contribute to the policy in a way that makes it almost unaffordable for employees. Companies that do this are short-changing their employees and may be at risk of losing good workers who move on to other companies that offer better benefits.
#4 Failing to Provide Options For Every Type of Coverage
A company can also make mistakes with employee benefits because it does not offer all possible benefits. For example, some companies that only offer health insurance do not also offer dental insurance. Another possibility is that a company may not offer life or disability insurance or retirement income options. All these elements are important to include in your company's benefits package.
#5 Not Having Retirement Benefits
Another employee benefit mistake that many companies make is to neglect the fact that they need retirement income for their employees. Even small startups should consider this to attract and retain good workers. The gap between what modern employees expect from their employer and what they get is a large problem today. Not offering some form of a retirement income plan will leave many people disgruntled and looking elsewhere for work and future employment.
What To Take Away
The five mistakes that we mentioned above are not the only ones a company can make. They are also not the "right" or "wrong" kind of mistake. While it is important to research and understand the true cost of everything you do, there is no formula for how much you should spend on any given aspect. But the above five examples are important because they are often ones that companies make without knowing it. When it comes to making effective decisions about managing your company's benefits offerings, 19:21 Consultants can help. We are experienced in assisting companies to make the right decisions not only for the longevity of their business but also for the well-being of their employees. Get started today by scheduling your free consultation with 1921 Consultants!