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Business + Management: Marty Mcghie

Managing Your Company's Benefits Program

Finding the right mix of the 'everyday' benefits for your employees.




Last issue, I focused on the importance of providing retirementplan
benefits to your employees. One aspect of said benefits is
to help tether your valuable employees to the organization.
Retirement plans, however, are only a part of the benefits
equation. Equally critical is the need to provide the “every day life”
benefits, which may include: medical; dental; vision; short-term and
long-term disability coverage; accidental death and dismemberment
insurance; and life insurance. In addition, specific, in-depth
benefits such as maternity and cancer coverage also are available
(these are typically offered by third-party groups working directly
with your employees).

The best mix
When deciding which benefits
to offer, the possibilities
are endless (as are the
phone solicitations once
you begin seeking information).
I suggest taking the
following steps to help you
best choose the benefits
mix that will provide your
employees with a good
package without putting a stake into the heart of your budget.

First, be sure that you solicit input from key employees.
These employees are smart enough to know that you won't be
able to offer anything and everything without crippling the company
financially, and their input will provide you some solid
insight. You may find that a particular benefit you had not even
considered is actually so important to your employees that they
will appreciate you offering it”?even at the exclusive cost of the

Second, you should align yourself with a good third-party
benefits broker. Choosing the right benefits broker for your
company is one of the most critical things you can do when
establishing or changing your benefits program. If the broker
does its job, it will make your life much easier. Because benefits
brokers are paid by commissions from the various insurance
companies they represent, however, you need to be careful
when deciding which company to hire. A few points to consider:

  • Take your time evaluating companies that will suit your
    needs, and look at multiple companies”?not the first one that
    comes across your desk. After all, you'll work closely with these
    people in making benefits decisions that will affect your company
    for a long time; you need to trust that they will recommend
    decisions beneficial for you and your employees, not themselves.
    My suggestion is to interview them as thoroughly as you
    would any potential new employee.
  • Choose a benefits company that will be objective when it
    comes to recommending insurance companies for your plan. It's
    important to closely evaluate which company you will be affiliated
    with”?it should have the resources to service you fully for
    multiple carriers.
  • Maintaining balance
    Another difficult decision regarding your benefits plan deals
    with the level of participation that you, as the employer, will provide.
    It certainly isn't a news flash that insurance costs”?particularly
    health care and worker's compensation”?have increased
    in the past seven or eight years at an unbelievable pace. These
    expenses have become a major line item on corporate America's
    financial statement, and they have the ability to paralyze a company
    if they aren't well-managed.

    While it's unrealistic to absorb 100% of your employees'
    healthcare premiums, it is equally unrealistic that your employees
    carry this burden all by themselves. If healthcare becomes
    too costly to your employees, you will find some of your employees
    will leave while others will elect to go without coverage. Both
    actions will prove to be damaging to your company. Your goal
    should be to maintain the best balance possible that will be fair
    to both parties.


    One option, by the way, is to offer some of the less-expensive
    benefits free to your employees. For example, many employees
    “?particularly your younger (more “invincible”) staff”?may
    not elect to pay for term life insurance. But your benefits broker
    may be able to find you a relatively inexpensive term-life insurance
    plan that provides $10,000 to $20,000 in coverage that
    you can afford to pay for. This type of perk can sweeten the pot a
    little for your employees without breaking the bank.

    Dangerous ignorance
    Each business needs to evaluate what's important for its own
    needs in terms of the type of benefits coverage, as well as the level
    of participation between the employee and the employer. I recognize
    that the company-benefits program is never a favorite issue
    to tackle. But ignoring it can be disastrous. Whether you address it
    semi-annually or annually, you must spend the time needed to
    determine the best possible plan for you and your employees.

    Marty McGhie ([email protected]) is VP finance/
    operations of Ferrari Color, a digital-imaging center with Salt
    Lake City, San Francisco, and Sacramento locations.



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