Typically, when HR hears the word disruption, there is not a warm, happy feeling attached to it. In most instances, it leads to investigations, discipline, terminations, and more recruiting. When speaking of total rewards, however, disruption can be a good thing, especially when looking for creative solutions and lower cost.
Disrupting total rewards is indicative of doing things differently--shaking things up and looking at them in a way you haven’t before. Since recruiting has been turned upside down and has become one of HR’s biggest challenges, turning a blind eye to what attracts and retains your talent may make the task more daunting.
Make no mistake, compensation is still what gets them in the door and is at the heart of total rewards. Having a competitive compensation strategy in this market is one of the first things employees look at when choosing an employer. If the compensation is very competitive, there tend to be fewer questions about other benefits; however, if compensation is comparable with other offers, or even lower, benefits can help seal the deal.
Traditional benefits are no longer enough when it comes to attracting or retaining talent. When all companies offer health, dental, vision, and life insurance, how can you stand out without breaking the bank? Here are some fresh ideas that have disrupted the way total rewards are delivered and can make a difference.
Direct-bill relationships with benefit vendors. This can be a viable option, whether your company is self-funded or fully insured. It sets up a direct-bill arrangement between you and the provider rather than running the claims through a third-party administrator (TPA). Not all services are ideal candidates for this, but it can work well with services such as chiropractic, physical therapy, pain management, and imaging.
Zero cards as a supplemental benefit. This is a supplemental option for self-funded plans that side-steps the administration costs for contracted services. The concept is similar to direct billing, but the difference is that a Zero Card contracts with providers to “bundle case rates,” ensuring fair pricing. Similar to a co-op arrangement, this effectively lowers the billing cost by guaranteeing patients will use the contracted medical providers’ services. Patients have cos transparency for all services and vetted service providers. One downfall may be limited provider resources in low population areas.
Retirement plan matching applied to student loan repayment. This benefit modification to your retirement plan requires the employee to be enrolled in the retirement plan but uses the company match to pay down student loan debt. The benefit value, payment schedule, and qualifications are defined by the plan. For example, each year’s benefit could be capped at the dollar amount the employee would have vested in that year. Younger employees who are not as interested in saving for retirement as reducing student loan debt find this an attractive benefit.
Flexible work. This refers to everything from work location to hours to virtual meetings on a cell phone, allowing employees who are able to work remotely to do so in every sense of the word.
PTO banks rather than designated time. Similar to the way work is performed, employees also do not want barriers on the way they use time off. More companies are doing away with traditional vacation, personal time, and holiday pay to offer general banks of time that can be used for any reason. This can also help achieve diversity goals by allowing employees to celebrate holidays and observances that may differ from company designated dates.
Shorter work weeks. Initially, this sounds as if fewer hours are worked, but it actually translates to time compression. Rather than working a traditional five-day week, employers offer four-day weeks or even three-day weeks with the hours divided between them. The days can rotate, based on business needs, but it effectively frees up more of the week for personal use.
Total rewards statements. Although these are not a new concept, the use of them may be. To get the best use of these statements, it helps to not only show a position’s full monetary value after the employer’s portion of benefit costs are added to base pay, but also shows what the employee will be earning after deductions. This may sound counterintuitive, but it provides a realistic picture to use as a comparison with other offers. For example, if your offer is slightly lower than the offer from another company, using the bigger picture can help influence someone to stay if another company has higher insurance premiums or deductibles, less paid time off, or lower matching for retirement benefits. When employees look at what they would give up, a total rewards statement may make the difference.
Skill-based pay. This compensation structure is not based on years of experience but is tied to obtaining certified skills. It can result in lower turnover, reduced absenteeism, increased satisfaction with pay, and improved employee/employer relations, according to Randy Wondergem, Compensation Director at MRA. Employees know what it will take to reach the next pay level and the company can budget more effectively, knowing the amount of time required to achieve the certification. In some situations, encouraging certification can also help with company branding for products, services, or resources by marketing your certified professionals. While it is not a fit for all positions, it can be conducive to those that rely on specialized skills.
It is recommended that benefits tied to a defined plan be discussed with your benefit broker or plan advisor prior to implementation. There are pros and cons to consider for each, including the wants and needs of your employees, compliance considerations, and limitations if there is a union presence.
For more information about disrupting your benefits, contact MRA’s Total Rewards Team by submitting a request or by calling 800.488.4845.
