HR with Tightened Purse Strings Can Still Meet Challenges
Posted on Tuesday, April 02, 2019 Share
Human resources (HR) departments face some complicated and unique challenges during difficult economic times. For example, a business facing financial cutbacks may decide to cut the benefits budget in HR, and then require the department to motivate employees who are feeling the results of those budget reductions.
Such a challenge may seem impossible to meet, but there are tactics that can either ease the additional financial burdens of employees or help contain benefits costs. Let's look at seven considerations:
1. Health benefits are one of the largest expenses represented in the benefits budgets of most companies. As such, health benefits often have the greatest cost-cutting potential. Consider putting the health plan out to bid for both your current type of coverage and a different plan that could have a better value. Assess plan features that could hold significant savings, such as prescription drug programs with a good track record on generic usages. Make sure that you're using every available method of helping employees get the most from their benefit dollars, such as offering premium-conversion plans and flexible spending accounts. Health savings accounts and consumer-directed health plans are also worth exploring.
2. Since 100% of the cost of voluntary benefits are paid by employees, expanding on or adding voluntary benefits can beef up the benefits offerings without the company incurring a lot of expense. Employees can pay for the policies through regular payroll deductions. Because employees get to take advantage of a group rate, purchasing such policies under the employer is often cheaper for the employees than making the purchases on their own.
3. Assess the benefits being offered to ensure they aren't the most costly, but still play a role in both keeping and attracting employees. Two examples of such would be disability and life insurance coverage.
4. High gas prices mean that commuting to and from work is a costly expense for most workers. Offering qualified transportation benefits, such as transit passes, van pooling or qualified parking, through reimbursement funded by employee pre-tax dollars, is a relatively inexpensive way for employers to help employees with expensive commuting. The arrangement can save workers money on their Social Security taxes, federal taxes and possibly state taxes.
5. In relation to the cost of transportation, another potential way to help employees save is by making some simple scheduling changes. For example, the schedule can be made to better allow employees the option of carpooling together. If certain employees have job responsibilities that could be completed from their home, consider incorporating one or two days of working from home for these employees.
6. Flexible work schedules, such as a ten-hour/four-day work week, may also be an option for some businesses to save their employees transportation costs and save themselves energy costs. Shorter work weeks are often favored by employees due to the extra time it provides them for their leisure activities and home responsibilities.
7. Even though the budget is tight, make some room to communicate with employees on the value of their benefits. Most employees only see their own out-of-pocket expense for benefits. They seldom realize just how much their employers are spending to provide valuable benefits for staff members and their dependents. It only takes a very simple and concise report to provide a summary of the employee benefits being offered and the employer's cost.
Of course, these are just a few tactics to tighten the benefits budget and still keep employees satisfied. Use these ideas as a starting point to get the ball rolling on other ideas to help your HR department meet the challenges presented by hard economic times.
Posted in Tax Topics For Individuals, Tax And Accounting Topics For Business
Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.