How to Offer a Great Employee Benefits Package for Your Charity or Nonprofit

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In the nonprofit world, offering an employee benefits package isn’t optional; it’s an essential part of recruitment, retention, and engagement efforts. But how can you offer a great one? And what exactly makes an employee benefits package great? 

In this article, I’ll share six ways nonprofits can maximize the value of their employee benefits plan without breaking the bank.   

1. Provide a balance between protection and flexibility

A great plan gives employees what they want while providing the protection they need. For example, only 68% of Canadian households have life insurance so offering group life insurance as part of your benefits plan is truly important. But that won’t make your plan stand out, and younger employees may not recognize the importance of this protection or other equally important coverage (such as long-term disability insurance).

So, what perks do nonprofit employees want? Consider your current employee demographics, health risk assessment results, and claim trends to answer that question well. Younger employees tend to be more interested in the perks they can get right now, which is why lifestyle or wellness spending accounts have become popular. They also want a smooth and stress-free user experience supported by technology. Older employees typically appreciate the risk management elements of the plan, such as disability insurance, family dental coverage and emergency travel insurance.

With proper plan design, your organization can offer benefits with a high perceived value—such as fertility treatment options—but don’t add much to the overall budget. While new or uncommon benefits can help your organization stand out from the pack—as medical cannabis coverage did a few years ago—it’s important to measure the results of these initiatives.

Flexibility and the dark side of wellness spending accounts

With wellness spending accounts, employees are reimbursed for wellness expenses such as gym memberships, fitness equipment and personal or professional development tools. This flexibility makes them popular with employees, but I don’t recommend building plans around wellness spending accounts because they don’t impact actual employee behaviour. Instead, it’s essential to design your employee benefits plan so it can truly help employees optimize their mental and physical health.

Using a budgeting tool to maximize the impact of your nonprofit employee benefits plan

To help clients get the most out of their employee benefits plan, we created a budgeting tool at Thorpe Benefits that allows clients to model different plan options. In real-time, they can see how changes to their plan affect the cost, broken down by benefit and per-employee averages. For example, suppose utilization (or appreciation) is low for a certain benefit. In that case, it’s fast and easy to see if removing it would be cost-positive, negative or neutral, which informs good decision-making. While I always recommend maximizing the impact of your employee benefits plan, it’s essential during economic downturns and other situations where controlling spending is a top priority. Modelling various scenarios and trade-offs is a very healthy exercise in plan management.  

2. Integrate well-being and mental health support

The Centre for Addiction and Mental Health (CAMH) reports that by the time Canadians are 40 years old, 50% have or have had a mental illness. To make a positive difference in employee mental health, your employee benefits plan must provide proactive and responsive solutions. For example, suppose your demographic runs young, on average 35 years old. In that case, your employees will expect to see policies, procedures and benefits that support mental well-being. They want and appreciate easy access to education and tools that support a more resilient mindset. They also expect to be able to access mental health support, diagnosis, and treatments quickly and effectively.  

However, even the most comprehensive benefits plan won’t move the needle on employee mental health if there’s excessive stigma around mental health and accessing mental health services. While it might seem outside the scope of my role as a benefits advisor, I always recommend that clients work to reduce this bigger problem of stigma. Creating a psychologically safe and resilient work culture must be demonstrated by example and reputation. Only then will you maximize the offerings and effectiveness of your employee benefits plan.  

3. Recognize the human factor

Does your employee benefits plan help your employees feel taken care of? Does it show you care about your employees? Employees in the nonprofit sector want to feel appreciated and supported at work, especially when facing a health issue. This support is created by committing to a positive workplace culture. Your employee benefits plan can then enhance the employee experience by helping them navigate the healthcare system in times of need. 

Sometimes a benefit offering can look good on paper, but it doesn’t deliver the intended results. For example, an unlimited vacation sounds like an amazing perk, but it can increase anxiety around workload, which is the opposite of what most employees want and need. Not having coverage or backup while away can stress a vacation or time off. 

If you’re not considering your employees’ emotional and practical needs when designing your employee benefits plan, it will be difficult to optimize the outcomes.

4. Reward longer-term employees

Did you know that you can offer your tenured employees more benefits? For example, you can provide “earned” benefits after two or three years of employment, such as higher plan maximums, higher healthcare spending account limits or reduced premium share. 

It helps your retention when employees know the longer they stay, the better benefits they’ll have. These benefits are especially potent in the nonprofit world, where employee turnover rates are generally higher than in the private sector. How can another organization make a competitive offer when your tiered benefits plan is so attractive? 

I encourage all my clients to think about using their employee benefits plan to reward longer-term employees. Just as vacation allotment grows with tenure, benefits can move on the same path with great results.

5. Emphasize benefits over compensation

Many nonprofits simply can’t compete for top talent based on salary alone. However, this isn’t catastrophic because many employees say yes to a job offer based on other factors. If your budgets are fixed and somewhat more restrictive concerning salary and bonus levels, I suggest making benefits a major part of your recruitment messaging. You can compete for the top talent by beefing up on less costly perks and benefits, such as education reimbursements, personal development investments, more paid time off, flexible and more autonomous work arrangements, and a robust healthcare spending account. (Implementing a robust spending account can attract employees who want to own their healthcare experience, but if budgets are tight, it might also mean removing other benefits that protect longer-term risks and liabilities. Each nonprofit must decide what program will serve its demographic best.)

Maintaining a positive and supportive workplace culture is another great way to attract and retain nonprofit employees, especially when budgets are limited.

Mini case study: How to make a four-day workweek work

In the summer of 2022, we asked our employees at Thorpe Benefits, “What are your top well-being wants and needs?” The number one answer was a four-day workweek. Now everyone at the company works Monday to Thursday or Tuesday to Friday. To accomplish this, we had to update our procedures to ensure proper coverage and support. Our message to employees is, “We trust you to get your work done and figure it out.” This wellness initiative was a grand slam for us. Employees love it, and it’s become our most effective response to stress and mental health in the workplace. 

It’s much harder to implement than adding more money to a healthcare spending account, but our people are happier, our clients are happy, and all the work is getting done. Plus, it would be difficult for another organization to poach one of our employees with an offer of more money and a five-day workweek.

6. Talk about your employee benefits plan consistently

Don’t let your employee benefits plan be all steak, no sizzle. Regardless of what you offer in a benefits plan, it’s only as good as what employees understand and remember. Plus, most employees have no idea how much their benefits plan is worth; you can increase plan appreciation by helping your people understand their employee benefits plan.

Four communication channels that can help employees know and appreciate their benefits plan:

  • Surveys – If you’re willing to update your plan based on employee interest, gather this information through a survey. When employees know their input matters, you can achieve tremendous results. You can also use surveys to see how much employees know about their benefits (and with regular communications, this knowledge should increase over time).  
  • Annual memos – Keep employees updated on what’s new with the benefits plan and provide context for any changes. 
  • Virtual presentations – Use these as part of the onboarding process and for continuous education (for example, sharing how employees can make their benefits go further by being a smart consumer).
  • Total rewards statements – Show your employees the value of their entire compensation package, which is likely thousands of dollars more than their base salary. Seeing the value of their benefits package is a powerful reminder that your nonprofit cares about the well-being of your employees.

Putting it all together: How nonprofits can measure the effectiveness of their employee benefits plan

In this article, I’ve shared six ways nonprofits can optimize employee benefits plans. While implementing these ideas greatly increases your chance of an effective benefits plan, it’s not guaranteed. To truly understand if your efforts are making a positive difference, measuring the results is essential. Gut feelings can help, but they can also be wildly off base for various reasons. That’s why Thorpe Benefits developed the Benefits Success Score, a tool that measures a broad range of metrics related to outcomes associated with employee benefits. Your attraction and retention goals depend on the success of your employee benefits plan; don’t leave it to chance when you can measure outcomes systematically over time.

If recruitment, retention and engagement are important to your nonprofit organization, your employee benefits plan is one of your most important annual investments. What’s stopping you from optimizing your employee benefits plan this year? 

About the author
Roger Thorpe is the president of Thorpe Benefits. He is an employee benefits specialist obsessed with helping his clients get meaningful returns on investments from their benefits and wellness programs.

Connect with Roger on LinkedIn here.

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