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With a new year right around the corner, this is the time when many credit unions evaluate their compensation and benefit plan. This month we are featuring an article from our outsourced HR assistance partner One Point HRO, on competitive benefits. In tough employment markets like Denver, where we are located, a robust benefits package can make all the difference when attracting the right candidates. Read on to learn how to evalaute your current offerings.
Even if there are no apparent shortcomings in your benefits program, it's still a good idea to periodically measure for effectiveness, as this will help you maintain a competitive advantage. Below are two ways to accomplish this.
1. Examine the current market
In March 2018, private industry employers paid an average of $34.17 per hour worked, according to the U.S. Bureau of Labor Statistics. Out of that amount, 69.5 percent went toward wages and salaries, while benefits accounted for the remaining 30.5 percent.
Legally required benefits — such as unemployment insurance and workers' compensation — made up 7.8 percent of private industry employees' compensation, followed by:
You'll need to ensure that your benefits are, at a minimum, in line with industry averages.
2. Conduct external benchmarking
It's not always easy to obtain accurate benefits information on competitors. However, if you fail to benchmark, you could be treading on perilous ground, as you will have no clue what your competitors are offering, nor will you know how capable they are of luring away your workers. If you want to know whether you're succeeding or failing, you'll have to benchmark.
During the data collection process, aim for a peer group of at least five competitors with qualities similar to yours — such as industry, business size, number of employees and geographic location. With Form 5500s and 10-K filings being public record, you should be able to find benefits information on your competitors reported through those filings.
You can also take advantage of free national data, such as BLS statistics and annual benefits reports issued by the Kaiser Family Foundation.
If you work with a benefits provider, the provider can do the heavy lifting. Or you could hire an HR consulting firm that specializes in benchmarking services. There's also the SHRM's benchmarking service, which provides access to free nationwide reports as well as industry and customized reports that both come with a fee.
If you cannot pay for benchmarking services, you can do your own research. For example, you can conduct an online search to see which benefits the companies in your industry are offering. (Job descriptions may reveal this information.) This method likely won't be as detailed as you'd like, but it will give you an awareness of what your competitors are doing.
As for what to measure, you'll want to zero in on three main areas:
1. Employer and employee cost.
3. Plan type and design.
Along with external benchmarking, perform internal research to gauge how your employees are feeling about your benefit offerings. Then make the necessary improvements based on those results.
Thanks for reading and we hope this article was helpful. Want further information on how we can assist with competitive benefits and other HR services? Drop us a line at firstname.lastname@example.org or visit our outsourced HR website at hr.cusn.com.