Does Pet Insurance Attract Talent?..... Jury's Out. Great Benefits Increase Retention!
Updated: Jun 22, 2018
Frankly, I am not a believer in using benefits as an attraction tool for talent. But I do believe that benefits have an uncanny ability to destroy an offer acceptance when a company has mediocre or even no benefits. In fact, last year I worked a vice president search where I was told at the start of the search that benefits were being implemented and would be in full swing by the time we hired this person. Three months later, we got to the finish line with an outstanding person and long story short, we lost the hire because the company failed to implement ANY benefits.
I sat down with Ron Herrera, the Vice President of Consulting Services with the Precept Group and we discussed the trends he is seeing in the market. And it seems like creative perks (like pet insurance) are doing quite a bit to retain people.
A major method of employee satisfaction is entirely within your control: that of benefits. No, I don’t mean ping-pong tables - I’m talking about comprehensive health care and retirement savings plans. With the right mix of effective benefits, you can land talent for years to come. Benefits have been the stepchild of compensation packages when compared to salary and other items. Looking at our economy now, healthcare is more expensive than ever. Healthcare represents a huge legislative battle for lawmakers, who fight about insurance costs and welfare programs. All this means benefits no longer take the backseat to salaries.
As the cost of benefits rises, so does their relevance from an employment perspective - it represents a much greater dollar amount than earlier in their history. Workers can go without a need for benefits for periods of time, but when they realize the true cost of healthcare, the availability of benefits in a role is much more important.
When a company pays for benefits, it drives employee retention in a few ways. Employers offer benefits primarily to attract and retain top performers because it’s become a cultural norm. The offering has become the status quo - so what is your company doing to stand out from the rest? Salary may be one tool to set yourself apart when talent is job searching, but so are benefits. How creative can you get with your benefit strategies?
The strategy of benefits
Before diving into how to use benefits to attract talent, it’s important to note that a strategy must guide what you decide to offer. According to Ron Herrera of The Precept Group, a lot of employers will throw somebody money and fail to communicate the value of healthcare plans or not even let their workers know they exist. Generating a buzz about your benefits gets employees to feel grateful that their employer appreciates them. And when values are effectively communicated, it’s harder for other companies to poach your talent.
Most companies offer insurance, typically one that covers a percentage of the employee and less for the employee’s family. A company going above and beyond might completely cover the whole family’s medical expenses. Ron Herrera notes that’s a better value proposition that’ll help you attract and retain thankful, solid workers.
Ron Herrera also believes you can achieve great results by generating a buzz about your benefits. Communicate how and what you offer fits into the mission of your organization and make the value of benefits very clear to your potential hires and current people. Know your audience, because a 24-year old kid won’t care about the same benefits as a 40-year old with a family. Conventional thinking says the young person doesn’t care about benefits, but in this day and age the opposite is true, so offering different kinds of plans (PPO vs. HMO vs. HSA) goes a long way. Ron suggests communicating how these are different, as each can be a great asset to your culture.
What tools are available?
Many companies today rely on electronic tools like employee portals, which involve different platforms that communicate details of different benefits. Company newsletters and HR emails reach a wide net, as most employees touch a computer at one point or another. Consider creating a video to make your communication come alive. Knowing the culture of your company, certain messages fly better when communicated through channels that are most in tune with your vibes.
What benefits for what phase in your company’s growth?
Small, medium and large companies should look to different benefit packages when they’re at different phases of their growth. Let’s say a startup just received their first round of funding and ready to focus on growth. From a benefits perspective, you’re still hiring employees and employees need benefits. A new company can incur a Health Reimbursement Account in HR, which might reimburse employees for some healthcare costs. If they choose to buy healthcare for everybody, then there are a few options from which to select. Cal Choice is a platform that provides very small companies with different benefits options. Don’t forget about vision and dental! My two cents: cover what you can to keep your people comfortable but remember the draw to a startup is still the personal and professional growth that you will provide each person.
Once you grow as a company, you qualify to be a large employer, which means the Affordable Care Act applies to you. These regulations are interesting for employers, because you’re not quite at the size where you can offer robust benefits, yet you must offer something. Mid-sized companies have a variety of options and different benefit designs from which to choose. Do a quick tally of what you expect to spend on healthcare, and for every hundred people you’re going to spend x, for people of this age and that age, and so on.
Soon after, you’ve hit what should be your program phase. This involves developing synergistic healthcare plans around your company’s population. Employers can arrive at the concept of self-funding (actings their employees’ insurance) with Stop Loss Coverage, or work with outside carriers.
The bigger you get, the better the law of large numbers activities. You may have some sick people but your majority is healthy. The larger the sample size, the more predictability and less liability - and claim events can be handled when they happen. However, you’re paying a carrier for all this coverage...so now may be a good time for employers to look seriously at self-funding.
Stand apart from the crowd
Communicate, communicate, communicate your benefits to your current and potential employees frequently. Benefits have an ability to impact larger business strategies, allowing employers to measure the difference it makes in worker’s liveliness. Consider being creative with your benefits. If someone needs pet insurance, but a company doesn’t offer it, that talented person may choose to decline your offer. With smaller roles, this applies less often - with VP roles, this could make or break an acceptance.
Listen to the full Podcast version to learn more:
Ron Herrera is Vice President of Consulting Services with the Precept Group, a national employee benefits consulting firm, and insurance brokerage. Precept offers a variety of services including health and welfare consulting, health management programs, benefits administration and technology, retirement plan services and more.
Ron partners with employers across the United States to reduce healthcare expenditures and stimulate organizational culture. Prior to joining Precept, Ron led Human Resources operations in Vice President and Director roles with multiple healthcare organizations.
Rick Girard is the Founder & CEO of Stride Search, an Engaged search firm. He has launched a crusade to disrupt recruiting by elevating the value that your talent acquisition partner brings to your organization. Rick raises the bar with a clearly defined methodology and process that is implemented to gain a massive competitive advantage for his clients.
While not running a School for Gifted Mutants as Professor X, Rick hosts the Hire Power Radio Show, a weekly series on OC Talk Radio which serves as an entrepreneur’s resource to solve the most difficult hiring challenges. When not on the air, Rick regularly teaches talent teams a more effective approach to landing talent and writes valuable content for Hiring Managers and Job Seekers alike.
Rick competes in Brazilian Jiu Jitsu and has an affinity for any adrenaline-pumping activity. Favorite activities include surfing, rock climbing, and running with scissors. Most weekends are invested in some sort of adventure. Usually exploring new beaches and hiking trails with his Wife and Daughter.