Back to Basics

Recent headlines announce such things as, “Employers Adjust Health Benefit Strategies in Reform’s Wake,” and, “Employers Get Leeway on Health Incentives,” as the benefits landscape continues to change to meet the country’s ever-changing employment regulations.  As the benefits landscape rapidly changes, so does the unemployment situation in the United States, with nearly 75% of its metropolitan areas reporting a continuing decrease in jobless rates.  With more workers returning to the workplace, lasting financial security has become of greater concern to many, as the recession has taken a significant financial toll on the millions of workers displaced in the past several years.

Individuals returning to work and the organizations hiring them face several challenges over the next several years.  Recent survey data indicates that retaining and awarding quality employees presents the biggest challenge moving forward out of the recession.  At the same time, employees returning to work seek benefits beyond just reasonable salaries; employees want flexibility, career development, and financial security, especially with the ever-present threat of a double-dip recession.  Combined with the evolution of health benefit strategies as the federal government requires, one might ask, isn’t it time to reexamine employment benefits as a whole, and take a step back to basics?

What is the point of an employment benefit?  Theoretically, a benefit meets both the goals of an employer and those of an employee.  Most employment benefits are offered to improve employee engagement and retention throughout an organization, while supporting, in some way, the financial security of an employee.  Among others, employee benefits often include health insurance, retirement benefits, paid vacation leave, and separation benefits, all variable between organizations and between employees within the same organization.  A quick look at these four specific types of benefits shows these benefits are becoming more employee-driven and more employee-centric.  Back to basics…what does the employee need? 

Healthcare is currently under high scrutiny from its many stakeholders, with increasing costs and changing requirements.  Wellness programs are more popular as employee health behavior is a consideration for many health insurance costs.  Retirement benefits are an ever-evolving benefit structure, as more and more organizations shift from offering pensions to differently structured and employee-financed 401(k) retirement plans.  Vacation leave is an increasingly important benefit as workers seek a good work/life balance in a ever more demanding employment environment.  Separation benefits?  Rarely discussed at the time of hire, yet always expected at the time of departure.  It is the rare individual who expects to remain employed with one company for life.  As re-structuring has become part of normal business operations, why not have a separation benefits component to an overall benefits plan?  One that balances the needs of the employer and the employees, communicated as clearly as any other benefit, and updated as other basic benefits and organizational goals grow and change? 

Going back to basics means reexamining the fundamental point of a benefit.  Separation benefits were fundamentally designed to offer financial support at the time of involuntary separation to maintain an income stream during the time of unemployment.  Separation benefits now are so far beyond basic, often providing months of pay to individuals with no regard for that individual's needs.  Separation benefits costing employers millions without clarity of purpose or result for the company.  Separation benefits have veered so far away from the basic, and from the point of a benefit, that it seems time to reexamine the benefit itself.  Step back and form the benefit around the employee and the employer, meeting goals of both in a modern and changing world.