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If your small business is set to give out some raises (or cut hours) after the U.S. Department of Labor (DOL)'s overtime rule changes take effect in December 2016, you may be investigating other ways you can cut costs and remain competitive without having to eat into profits or downsize valuable employees. In many cases, the majority of your cost-cutting measures may involve employee benefits like health insurance, paid time off, and retirement contributions. What should you do to maintain your business's financial edge while ensuring your employees are adequately compensated? Read on to learn more about the investigative steps you'll need to take to determine which group benefits provide the most value to your employees and which can be eliminated.
What should you consider when choosing the benefits to offer your employees?
Depending upon the size of your business, you may be able to spend some time talking with each employee to find out what he or she believes to be the most important benefits offered. Some may place a greater importance on employer-provided health care coverage than even a salary, while other employees may begin job-hunting on the sly after learning of potential cuts to 401(k) matches or paid time off. By providing your employees with a short written survey asking them to prioritize various employee benefits on a 1 to 5 scale, you'll be able to get a good idea of the benefits they hold dear, as well as those they could do without.
If your business has a few too many employees to make an individual survey an efficient option, or if you're worried about the potential effect such surveys may have on employee morale, you may instead want to focus your efforts on lowering the cost of certain benefits rather than eliminating them entirely. In many cases, you may be able to shop insurance carriers or transfer some costs to employees who will begin getting overtime pay in December so that your business's out-of-pocket salary and benefit costs remain the same despite the potential increase in overtime pay for your employees.
Which benefits should you look at cutting when cost savings are needed?
If you've taken a hard look at each of your employee benefits and elimination doesn't seem to be the best option for any, there are still some ways you can reduce costs on some of your biggest ticket expenditures.
Because health insurance often makes up the bulk of employee benefit costs, reducing the amount your business pays for employee healthcare coverage is likely the most efficient way to lower your costs. By switching from a high-deductible health plan to a managed care plan with a smaller provider network, you may be able to lower the amount you pay in premiums on your employees' behalf without noticeably increasing the cost your employees pay. Adding a "wellness" component to this plan that requires employees to log a certain amount of exercise each week or engage in other healthy preventive behaviors can cut costs even more while helping improve camaraderie among your staff as they compete for prizes.
If you already offer a retirement match and are reluctant to reduce it, you may want to change your vesting time frame rather than decreasing the amount you contribute. By requiring employees to work one, five, or even ten years before they've earned the right to keep their matching retirement monies, you'll encourage employees to stay with you over the long haul while keeping these retirement funds in your company's possession if your employee does decide to leave for greener pastures within a few years.
Contact a company like NFP, P & C, Inc. for more advice on how to choose the best group benefit plan.Share
19 July 2016