Preparing the Perfect Package
It’s Time to Take a Look at Your Benefits
by Paul Bieber
The Easter Bunny told me a couple of weeks ago I could drop
medical insurance because I would be healthy next year. Since the group
insurance for my consulting company renewed on May 1, I just happened
to get my renewal notice at the same time as my conversation with the
Bunny. It went up 65 percent. So I figured I could drop the insurance.
Fortunately I have a great insurance broker, Mike, who got new quotes
from companies that last year were very high, but this year are hungry
for business. The new rates, although up from last year, were 30-percent
less than the rate from my current carrier, for a better program. It took
about five seconds to make the decision to switch.
Mike told me that many companies are switching this year even though it
is a paperwork and administrative hassle. A lot of companies are going
to “cafeteria style” plans, where employees are given a fixed amount allocated
to create the package of benefits that best suits their needs. Talk to
your broker about this.
Many companies keep their benefits the same year-to-year, and reduce the
coverage or raise the co-payments to control costs. Mike said that a better
route to take is to poll your employees and see what benefits actually
are being used. If a small number of your staff is using a benefit, make
that an optional, employee-funded benefit, and use the company dollars
to get a benefit that would be used by more of your people.
A couple of months before your policy expires take a survey of your competitors
and companies in your backyard. See what they are offering. Call their
human resources or personnel people, telling them you are interested in
applying for work and asking what are their benefits. You will get answers
that will help in knowing how to frame your benefits programs. You do
have to be competitive in all aspects of hiring: wages, benefits, working
conditions and job growth potential.
If you want to hire longer-term
most studies say that benefits are equal to and in many cases more important
The Payroll-Benefits Shuffle
If you are planning to hire part-timers or short term employees, it is
all about the wages. If you want to hire longer-term employees, most studies
say that benefits are equal to and, in many cases, more important than
wages. Everyone knows the economy is down, and there is no money for raises
or high starting wages. But the good employees are looking at the benefits
packages. If a prospective employee asks more questions about benefits
than about the next raise, they are interested in the long haul with your
It is time to look at all of your benefits: dropping the seldom used,
looking at the generosity of time off and shifting funds to the key benefits
of medical and disability insurances. Don’t do the payroll-benefits shuffle
where you give a 5-percent raise, but ask employees to pay more on their
insurance. When the employee’s bottom line is the same, it appears you
are trying to pull a fast one.
People will say they want to keep their same doctor, but if you switch
to another plan, they will find good doctors. Don’t let this be a deterrent
from changing. Going to an HMO should be strongly considered. They are
usually less expensive than a fee-for-service or PPO plan. Plan to raise
the out-of-network costs to gain lower costs for in-network doctors and
Keeping wage changes low and reworking your benefits program for the betterment
of your employees will gain your employees’ respect and increase the retention
rate of your staff.
Author’s Note: We are shifting the emphasis of this column to
a question-and-answer format. Please send your questions about business
issues to firstname.lastname@example.org, call me at 603/242-3521, or fax to 603/242-3527.
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Your name will be withheld from the article at your request, but I can’t
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you get the answers.
Paul Bieber has 30 years in the glass industry, including
21 years as the executive vice president of Floral Glass in Hauppauge,
N.Y., from which he retired in 2005. Mr. Bieber’s opinions are solely
his own and do not necessarily reflect the views of this magazine.
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