Employee Benefits. I like to think of the phrase as a verb, but we all think of it as a noun: health plans, flexible spending accounts, life insurance, flexible hours, pensions, charitable gift matching, etc…The list of nouns is long. While the specifics can vary, the verb they share is the same.
So how exactly should you benefit your workforce? What values are important to you and to them? Find the intersection and circle out from there.
Start by having a number of internal conversations when assessing employee benefits for your company—particularly from a DEI (Diversity, Equity, and Inclusion) or ESG (Environmental, Social, and Governance) perspective.
The answer, hopefully, will identify where your interests overlap. Where there is divergence consider the differences and find solutions that represent the company as a whole and its future goals. Plan a path to compromise, for example. Prioritize getting to a place where commonality is possible.
We recommend the following 7 steps to form an employee benefits offering that truly represents your company’s values:
First, define your company’s DEI objectives by prioritizing your goals. Think about this from the company’s perspective. We will get to the employees’ perspectives in the next two steps. Do your current benefits support those goals? For instance, if the company’s goal is to retain more women—specifically working mothers—it’s not enough to simply state that. The right structures need to be put in place to make it possible for women to thrive at work while caring for their families. Do you have a reasonable parental leave policy or offer flexible scheduling? If not, why not? What changes need to be made? Are they simple or systemic changes that are needed? How will you implement them? Make a plan.
Second on the list is employee feedback. Set up an anonymous internal survey and learn more about your employees’ needs and perspectives, including, of course, their perspectives on DEI and ESG issue areas. Younger generations in particular may voice strong opinions on these matters. But in an anonymous survey you may not know any demographics (a truly anonymous survey will insist upon it). You’ll get more candid responses if you go this route.
Third, consider representation and equity in your company’s employee benefits offerings. Do all employees have access to equitable benefits regardless of gender, race, ethnicity, or other demographic factors? Pick cohorts based on not just demographics but also on rank. As an example. executives often enjoy a broader spectrum of employee benefits, with additional perks and higher coverage. Entry-level employees or those from underserved groups may not only have fewer options to begin with, they might also face additional socioeconomic barriers to actually exercising the benefits available to them. Be sure to think about coverage, participation, and cost. Also think about choice. Who has the luxury of choice and who does not?
Fourth, take into account your company’s community engagement and broader social responsibility. Will your initiatives benefit society at large? This could mean incorporating volunteer days, philanthropic donations, and partnerships with local organizations that align with your company’s values. Employees feel great about working for companies that share their values publicly.
Fifth, enlist your legal department to ensure that your company’s employee benefits comply with relevant legal and regulatory requirements, such as anti-discrimination laws. It’s not just about CYA. If you roll your eyes about this, consider that others are watching and leadership matters.
Sixth, use this opportunity to assess how well ESG is integrated into your company’s operations. For example, what’s being committed to at the level of governance? Who gets a seat at the table? Do your hiring policies and procedures result in a diverse pipeline? Who leaves the company and why? What do customers, suppliers and investors think? How do your policies and practices affect employee wellbeing, recruiting and overall company performance?
Finally, seventh, evaluate your company’s commitment to improving its benefits package over time. We recognize we can’t raise everyone’s wages today however what does that pathway look like? Assess whether you provide equitable and sustainable benefits that positively impact your workforce. How is that measured and reported?
Are your organizational values aligned when implementing these practices? Are you committing to values or are you giving way to pressure? There’s a difference.
Companies should evaluate their employee benefits and programs through an ESG lens when measuring their success. A conscientious approach to benefits that takes into account the needs and values of your employees can enhance your overall reputation, reduce risk, and future-proof the business by strengthening employee engagement and loyalty. Through employees, the company benefits too.