Employee Benefits: Too Much? Too Little?

According to a 2009 Bureau of Labor Statistics report, 61% of private industry employees had access to paid retirement benefits. Medical care benefits were available to 71% of private industry workers. Employers paid 83% of the cost of premiums for single coverage and 71% of the cost for family coverage for workers participating in employer-sponsored medical plans.

How does your business measure up? Few small businesses in this economy would likely feel they’re offering too much, so you’re probably looking for way to cut. There’s no magic formula, but your accountant can help you determine if benefits are taking up a disproportionate amount of your bottom line.

Communicate, communicate, communicate
Who’s in charge of communicating with your employees about benefits? If you don’t have a full-time human resources professional, it’s probably you – or nobody. Someone needs to be researching and communicating about benefits regularly, emphasizing that benefits are an important part of compensation. And that they reach beyond retirement and health care.

This person can contribute to the company’s blog or Twitter presence, continuing to outline what’s available and providing an area for employee input. He or she should look for free or low-cost benefit opportunities, and occasionally evaluate current retirement and medical plans, comparison-shopping for better opportunities with reduced fees.

Ask select employees (or all, if you're a small shop) to lunch, to discuss benefits frankly. What's missing? What do they like that they would hate to lose? This gives the benefits person a chance to say a few words about why you can't do more. Your employees are already nervous about their jobs. It's better to be frank with them than be silent. Have a contest—with a prize, like an afternoon off or company swag or a restaurant gift card—that asks employees to come up with ideas for saving money on benefits.

Retirement
If you're fully matching employee retirement accounts, great. This is an area where you can trim down if you're having budget problems: consider decreasing your match. If things are good, bump it up some. It's good for morale, and encourages employees to save.

Whatever your contribution to your employees' retirement, there are inexpensive and free ways to help them plan for retirement. Bring in a local financial advisor for presentations. He or she can cover topics like budgeting, ways to reduce debt, and asset allocation.

Use social media here, too, or at least a physical bulletin board in a prominent place. Where can employees go for good investing and retirement advice? Your employees can help here. Encourage them to visit their portfolios frequently and use the resources offered by your plan provider, to ensure a potentially profitable mix of holdings.

Health care
Make sure they understand the wellness programs that are available to them, to minimize both your health care costs and theirs. Some insurance companies offer a discount if you make a specified number of visits to a participating health club every month. Bring in a professional for a stress evaluation/reduction session or series. Post notices about local health screenings. And be a good example.

Health care costs killing you? Consider switching to a combination high-deductible/Health Savings Account (HSA) plan. If you must cut health care entirely, try to contribute at least $100/
month to each employee to subsidize their health care. Many states have low-income health care programs; do a search on the Web and have this information available.

Another option is to contribute less to your employees' plan. It's better than cutting it entirely. But again, it's very important to communicate well with your employees when changes like this occur.