That’s because benefits are critical for attracting and retaining talent. As such, it is critical to make a strong case for employee benefits during the budget conversations with leadership. So how can you be ready to have those budget conversations with your leadership?
The impact cutting a benefits budget would have
Why do you come into work? Two big reasons? Salary and benefits. They provide care, value, and investment for the employees. And showing you care boosts morale, loyalty, and productivity. These are also a form of compensation, and cutting into them could cause a decrease in productivity and overall the business’s performance.
A big question coming into play is how the pandemic changed businesses. 62% of Americans believe their health is more important to them than before the pandemic. The decisions based on the budget of benefits for employees fall in line with the change the pandemic had. It became hard to separate home and work. Many people feel like wellness matters more than ever, and as the company keeps supporting their wellness, it creates loyalty and higher productivity.
Preparing for benefits budget conversations
Conversations about money can be uncomfortable. Here are some things you can share to support your cause:
Company values and how your benefits tie into them
Comparison of current benefit packages with your competitors
The benefit budget conversation
When the benefit budget conversation here, give the information you prepared and make the argument on why benefits cannot be reduced. Keep the conversation focused on the value benefits have on your company, including:
Attraction of more talent
Health/medical coverage is necessary
Employee work/life balance
Show proof of benefits plan success
After presenting your information, the conversation can go many ways. If the financial team or leadership does want to reduce the benefits budget, being able to navigate this conversation can be hard. First, ask questions. Make sure you have an understanding of where they are coming from. Knowing the bigger picture can help with the next step.
Give alternatives. Offering solutions rather than simply calling attention to a problem can provide an educational opportunity and perspective from our area. This can show them certain benefits that fit into larger pictures of the company and give them a solution to the big problem. Demonstrate that you thought through the issue at hand and considered multiple options.
Can you save money in your benefits budget without impacting employees?
Absolutely! Communicate the benefits you offer to your employees more often, since benefits can be under-utilized or misunderstood. This can make their decision more informed and intentional. Repurposing the budget to focus on the benefits your employees want can also save money. This comes from communication, surveys, and market trends. Finally, use data to guide decisions, this can identify areas of waste or inefficiency.
In 2022, our annual employer survey showed that the biggest challenges employers face with benefits are within education. This includes things such as consistency and engagement in meetings/webinars, bite-size educational content, and the biggest: engagement. Focusing on the areas of challenge can create areas of waste or inefficiency, creating a more functional and beneficial budget and company overall.
Want to know more about benefits budget conversation? Watch our podcast episode below!
The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers.
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