As an HR leader, you are creating a competitive, attractive, cost-effective benefits packages is a big job that requires a lot of time and research. But designing a great package is just the beginning. Once you’ve rolled out a benefits plan, you need to measure its effectiveness so you can understand what’s working and what needs to change.
While evaluating your benefits program performance is an investment, it’s worth it. Using quantitative and qualitative methods—a little bit of science and art—you and your team can access the insights you need to make smart, strategic benefits decisions going forward.
Why benefits programs need ongoing evaluation
The Society for Human Resources Management (SHRM) encourages HR professionals to have a “well-thought-out benefits plan design that meets both employee needs and employer objectives,” adding that these objectives “are not static and should be evaluated and revised to reflect the current employer strategy and employee needs.” But how do you define your program objectives to begin with? Start by doing some research.
How to gather evidence on your current employee benefits plan
To evaluate your company’s benefits plan, you need to think like a scientist. The first step is collecting evidence using internal analytics programs or in partnership with your organization’s third-party administrator (TPA) or broker/consulting firm. Specific company scenarios and needs differ, but the following metrics can provide a good baseline on the impact of your benefits program.
- Engagement rate: Measures the percentage of employees who have access to a benefit and actually use it.
- Cost trend: Measures the impact of specific benefits investments on your overall cost trend. For example, if you onboarded a new diabetes management app, did you see a reduction in outpatient claims related to diabetes-related episodes?
- Behavior change: Measures whether or not a specific benefit—adopted with the goal of changing employee behaviors—is reflected in your claims. For instance, if you started offering a 401K match, did more employees start contributing to a retirement account?
- Time-savings: Measures how much time your HR team and employees save from a new benefit investment. For example, if your company invested in a new benefits administration platform that gives employees access to all their benefits in one place, are you receiving fewer questions about where to access benefits?
Quantitative measures are a good start, but they don’t paint a complete picture. The next step is to investigate existing—or establish new—qualitative measures. More anecdotal feedback loops like weekly surveys, online suggestion boxes, and easy-to-access intranet forms can be a great way to collect employee thoughts and feelings about your benefits program. Also, try to foster a culture that encourages employees to proactively share thoughts and opinions on benefits-related topics. Amping up your qualitative analyses will provide a complementary perspective you’ll lack if you only look at cost and utilization metrics.
When to measure your employee benefits plan
Getting a baseline read on your benefits program is important, but that’s not the end of the story. You’ll need to invest in ongoing evaluation measures to continually check in on your performance and approach. When it comes to the quantitative measures, at minimum you’ll want to run an end-of-year analysis to inform your benefits decisions for the next year. Many organizations start evaluating new solutions in Q1/Q2 for onboarding in Q3 and rollout in Q4 or early Q1. If you can perform quantitative reporting semi-annually or even quarterly, all the better—particularly if you’ve onboarded new solutions so you can see how they’re making an impact.
Qualitative measures are generally much easier to collect and analyze, which means you can ask for employee feedback monthly or even weekly, helping you gauge your employees’ thoughts and opinions all year round.
Health benefits account for a large percentage of overall program spend, which makes it a critical area for optimization. In addition to providing health insurance, it’s important to help employees become better consumers of healthcare—not only to encourage health and wellness, but also to contain healthcare costs.
One key way to achieve this is to create an ongoing dialog with employees about their healthcare options. In addition to helping employees choose the right plan based on their specific needs, invest time in providing the tools and resources they need to find high-value care and make smarter care decisions throughout the year.
If you’re not already, you may also want to consider partnering with a benefits consultant who can assess your company’s specific population needs, measure employee satisfaction, and surface innovative benefits solutions for you to evaluate.
Spread the word on your employee benefits plan
In order to get an accurate picture of how your company’s benefits plan is performing, employees need to know what’s available to them and put these offerings to use. A solid communication strategy can boost company-wide participation in, and enthusiasm around, your benefits package. This awareness campaign should happen year-round across different channels such as:
- Employee handbooks and onboarding guides
- Employee committees across different departments and locations
- Social media and messaging apps
- Company intranet
- Approved employee case studies that show the impact of specific benefits on individual people
Effective benefits communication is a balancing act. If you bombard employees with too many reminders and updates, they may start tuning you out. Make sure that when you share benefits information, it’s relevant, timely, and concise.
By evaluating your existing employee benefits plan using a little science and a little art, taking advantage of both quantitative and qualitative analysis methods, and promoting benefits effectively and consistently, you’ll be much better positioned to deliver an excellent, optimized, cost-effective benefits programs—a win for your entire company.