Companies are growing increasingly desperate to combat plummeting employee morale in the face of skyrocketing benefit costs and pared-back employer contributions. For an idea of just how dire it is, consider that many companies now provide employer-sponsored lactation services for new mothers. While far from a traditional benefit, it makes financial sense, according to Mark Willaman, president of Capitola, Calif.-based information services firm Fisher Vista and HRmarketer.com.
Companies with lactation support services experience a 27 percent reduction in absenteeism of nursing mothers and a 35 percent reduction in health care claims over companies without such a program in place. A typical lactation employee benefit might include a worksite pump room, lactation consulting and partial subsidization for lactation equipment. Industrial giant The Aerospace Corp. and food producer ConAgra are two companies that offer this benefit.
For brokers that are losing revenue due to employer frustration with rising costs, non-traditional offerings such as these are worth a closer look. As with large carriers that provide traditional products and services, brokers can work with vendors that sell non-traditional benefits to offset any income shortfall.
"We have noticed a considerable shift within the ancillary benefit market (dental, life, vision, disability) to voluntary -- rather than employer- sponsored," explains Holly Girgin, RHU, director of marketing with Belton, Mo.-based Heritage Benefit Consultants. "This still allows the small employer, in particular, to offer an array of benefits and to provide choices for employees without having to absorb substantial costs."
According to Willaman, some of the more popular, and obscure, non-traditional benefits include:
Child and elder care counseling -- An employer-sponsored program designed to assist employees with child and elder care responsibilities. These services boost the organization's bottom line by attracting and retaining human capital, reducing absenteeism and increasing productivity. Additionally, they cut the amount of time employees spend at work accessing needed child care resources.
Legal services -- American Bar Association statistics show that only 10 percent of the nation's population receives the legal assistance they need. Not getting this assistance can cost an employer in terms of absenteeism, reduced productivity and increased health insurance costs. As a result, many employers now offer legal services as a life management employee benefit. Legal services typically are offered as a stand-alone benefit, through an Employee Assistance Program or through a work life resource and referral service. There are several different types of vendor models, but most involve the employer paying a fixed amount per employee per month, allowing the employee to obtain legal advice from participating attorneys.
Financial counseling -- Studies have shown that nearly 20 percent of workers in the United States suffer from stress as a result of poor financial behavior. However, research also shows that less than 20 percent of the nation's largest employers offer employees education on debt, credit card and money management.
Concierge services -- Benefits range from "convenience" services (where a vendor provides an employee with referrals to dry cleaners, home repair services, out-of-town fitness centers, etc.) to a true concierge service where the vendor will actually procure services on the employee's behalf such as dinner reservations, airline tickets or concert tickets.
Pet insurance -- Pet insurance plans typically are offered to employees as a voluntary benefit. Insure.com reports that pet insurance premiums range anywhere from less than $100 per year to more than $1,000, depending on the pet's age, type and its geographical location. Deductibles range from $40 to $100 for each illness or injury.
A number of Girgin's clients established tuition reimbursement programs and employee referral programs. She's also seeing a spike in the interest in long term care insurance, a trend she believes will continue as baby boomers age. For this reason her firm is ramping up on its knowledge of the industry, and she just completed an LTCI course.
Interest in employee assistance programs is also on the rise, and Girgin speaks frequently about disease management and health and wellness programs.
Lastly, her own agency has offered spa days, which not surprisingly, she says, are highly valued and appreciated.
"We provide employee benefit statements to give employees a [clearer] idea of the costs of all benefits covered by their employer," she adds. "And with employers, we just don't talk about products. We want to make sure they're aware of the various cost-saving strategies that are available to them."
Soften the blow
Contrary to conventional wisdom, there are a number of simple and effective steps that brokers can recommend to reduce benefit costs without a corresponding reduction in employee morale.
"What we try to do is present medical plans that save the employer real money," says Joe McFadin, a benefit broker with Houston-based Wellspring Insurance. "Then we suggest that the employer put those dollars toward other things, like employee recognition awards and cash for high performance. Company outings to baseball and football games always prove popular."
McFadin suggests employers negotiate a discounted bulk rate at a local health club and then subsidize a portion of the monthly cost. He also encourages wellness contests, such as prizes and bonus incentives for quitting smoking and losing weight. Teaming with local hospitals for health fairs, free blood pressure checks and other simple tests also are effective.
"The little things, like company holiday parties and picnics, are important," he adds. "All of these things show the employee that even though the employer is cutting back on the amount they contribute to their benefits, they still care. This will go a long way in softening the blow and keeping morale high."
Girgin agrees and adds, "I believe we are seeing a societal shift in which employees want and expect their employer to have some recognition of their personal and family lives. I am convinced that most employees truly desire to be productive and effective workers but may have fixed on temporary family situations that require a certain flexibility. Obviously, not all occupations can accommodate every need, but I think employers -- for the most part -- have responded favorably when possible."
From the February 2006 issue of Benefits Selling Magazine • Subscribe!
