In the future, it might become more common for employees to find and purchase their own benefits.
Evolving trends in the way companies issue employee benefits could require more HR departments to rethink their approach to managing them. In an article for The Wall Street Journal, Michael Kitces of Pinnacle Advisory Group said that the way most businesses offer benefits, as add-ons to regular payment, stems from outdated practices and may be changing: instead of having plans included with their salary as add-ons, employees would be paid more and expected to purchase "perks" like health insurance on their own.
Rather than think of this as a loss, Kitces argues that this structure might allow employees more freedom to purchase their preferred plans, as well as the capital to do so. This could be demanding for employees in the long term, but in the short term, this different pay model reflects an increase in choices.
"All it really means is that instead of an employer paying $X on behalf of an employee for a certain benefit, the employer pays the employee that same dollar amount and allows him/her to use the dollars as desired toward their own selection of benefits, from retirement to health insurance and more," he writes.
Despite this, the use of benefits as a means of retaining employees still seems to be prevalent. A MetLife study cited by InsuranceNewsNet found that more than 41 percent of employers associate benefits with the larger goal of better retention.
If the changes forecast by Kitces really do end up taking effect on a grand scale, more businesses may have to rethink the ways they process and manage benefits for their workforce. Hiring consultants for HR project management tasks helps make daunting changes more manageable and sets up systems for better future performance.