Employee Benefits – Efficiency and cost savings

Efficiency can be measured in many ways. A large HR team within a sizable business will approach efficiency in a different manner to a solitary HR manager in a smaller business. At Generation Employee Benefits our job is to understand your business and the challenges you face. We are dedicated to working with you to implement positive change, such as, by outsourcing administration or management, or the introduction of new technology,

Employee Benefits – Efficiency and cost savings

Generation Employee Benefits was appointed by a long-established building services provider with approximately 400 employees, including a small HR team. The company used a broker for some benefits and dealt directly with pension providers and insurance companies for others, but had no overall strategy.

As the business had grown substantially over a fairly short period the approach to benefits had become reactive not proactive. This was causing issues with day to day administration, annual re-broking, product knowledge and overall efficiency.

The HR team identified that they did not have the expertise to truly understand if the employee benefits package in place was right for the business and more importantly for the employees. Generation Employee Benefits was appointed to take over the management and administration of all employee benefits, including UK and International private medical, life insurance, pensions, disability, wellbeing and employee communication.

The initial audit identified that with the opportunity to immediately increase efficiency, further positive change could be harnessed by utilising the Generation Employee Benefits buying power to:

  • reduce the cost of insurance products,
  • reduce the pension fund charges for employees and
  • to ensure the providers with the best products were in place.

Generation Employee Benefits were also able to save the client over £50,000 in commission costs by moving them to a fee model.

Outcome

The building services provider enjoyed significantly increased HR efficiency – releasing its employees to do other important jobs, improve the benefits package and save the business money.

There are many ways to save money, improve value for money and deliver better employee benefits. Consider reducing the high commission paid to your broker, ensuring that your benefits are appropriate for the business and its employees and also, that you obtain the most competitive product rates.

Saving money on your benefit spend

Generation Employee Benefits were appointed by a private equity company to review its significant suite of employee benefits including pension, medical, life, disability, dental, gym, employee assistance and cycle to work.

The reason for engaging further help was due to unsatisfactory service provided by the current broker; the personal touch had been lost due to numerous account managers working on the account over a short period of time.

Our initial audit is always designed to ensure that the benefits are appropriate for the business and valued by its employees. The audit showed that the benefits were indeed appropriate to the business, the products were with the right providers and generally benefits were appreciated. The audit did however identify two issues – in addition to the original service issue highlighted by the client.

Commission – Many clients still think that commission on non-investment products is just something they must accept.  Although commission can be an appropriate way to pay for services, unfortunately the standard rates of commission are set by the product provider and are not generally set at a level appropriate to the work undertaken by the broker.

In this particular instance the commission payable to the holding broker was in excess of £30,000 more than the fee quoted by Generation Employee Benefits to manage the account.

Engagement – An issue was also identified with employee engagement; many employees did not know that a number of the benefits existed. To overcome this problem Generation Employee Benefits recommended benefits management software, however due to financial constraints the agreed solution was the production of a mini booklet of benefits that was emailed to employees annually.

Outcome

The intervention improved employee engagement and resulted in a significant cost saving for the clients.