Millerwood Communications

Small Businesses in Benefits Crunch

In a recent insurance survey of small businesses, almost half of the respondents say they plan to cut back on employee benefits in the future.

That puts small businesses at a big hiring disadvantage from larger employers who can afford to offer more robust benefits.

Combined with other benefits larger employers are more likely to offer like job sharing, telecommuting and flextime, small businesses are going to be increasingly challenged to offer employees a plan that offers good benefits, but also keep costs in check.

When trying to adapt to our changing economy, employers need to remember what employees value.

In addition to health care, employees also appreciate a 401(k) plan, vision insurance and time off. Plans that offer personal financial security, such as life and disability insurance, go a long way in easing employees' concerns in the event of sickness or death.  

Small companies, as well as medium to large organizations, will need to continue to evaluate costs for the company and for employees. This may mean getting creative with the benefits that are offered and who pays for them.

Group benefits plans can offer employees reasonable rates, while the employer incurs no direct costs. Some analysis is required for time off policies, flex time and telecommuting. These policies have no direct costs, but there is an indirect cost that needs to be considered. 

Looking at a total benefits plan, employers can keep up with the changes by implementing plans that are attractive to employees, and don't break the bank for employers.   

Avoid Costly Miscommunications During the Offer Process

Poor communication during the recruiting process can contribute to the loss of good candidates.

For example, a candidate goes on a job interview and is told she is the number one candidate and to expect a job offer. The applicant prepares to give notice and, possibly, relocate. But days go by and the phone never rings. The offer never comes. The candidate may never know what happened and is left with a poor impression of the hiring company.

What the candidate doesn't know is that the hiring manager started the interview process after getting verbal approval to hire for the position. At some point, finance denied the requisition, but this information never makes it to the recruiter or hiring manager. So when the manager goes through the proper channels to get an offer letter together, he is told that he does not have an approved open position. Or, he may find out that the requisition was once approved, but pulled back by finance to lighten the budget. Either way, it's a lose-lose situation.

When the next quarter rolls around, and the requisition is reopened, the number one candidate is long gone and the hiring manager has to start the recruiting process again.

Not only does the company lose a top candidate, it may be open to legal action. If the candidate is led to falsely believe she has an offer, and makes life decisions based on that, she may have grounds to sue.

To avoid costly mistakes, human resources, finance, recruiting and the hiring manager need to all know the status of requisitions. Hiring managers should only act on approved open positions, instead of verbal OKs. In addition, caution is the best approach during the interview process. Avoid telling a candidate that she will receive an offer, or that she is the best candidate. Hold off until an offer letter is prepared and approved by the appropriate people in the company.

Once an offer letter goes out, it should only be rescinded if something negative is revealed about the candidate that no longer qualifies them for the job.

Save time and money with a good internal communication plan for recruiting.

The Expanding Role of HR: Are We Ready?

My first job in human resources included collecting medical bills from employees and sending them to the appropriate insurance carrier. Once they were sent, it was also my job to ensure they were paid.

After about three months of doing this task and spending endless hours on the phone with providers and carriers (and long nights making copies), I developed and implemented a training program to teach employees how to submit and manage their own claims.

Over the next six months, I transitioned the whole task to the employees. Freeing up about an additional 30 hours a week, I was then able to focus effectively on what I had been hired to do: Examine medical plan enrollments, recommend new insurance carriers, promote under-utilized benefit programs, etc.

In my own way, I outsourced (to the employees) a job function and replaced it with more strategic responsibilities. I did it out of necessity so that I could focus on doing what I was originally hired to do. But as more and more HR responsibilities are outsourced to third parties, and HR staff is freed up to be more strategic, is that what the staff was hired to do? And is that what they want to do?

The role of HR is quickly changing, and simply giving an HR staff the time to be analytical and strategic doesn't mean that is what HR employees signed up for. They may not have the training or desire to take on that role.

As part of an initiative to outsource, employers should examine the current HR staff to see if it fills the strategic gap that exists in so many companies. If not, time and money should be allocated to account for retraining of the current HR staff, recruiting and turnover.