Do you want to know how to frame an employee benefits package for your clients? You can frame employee benefits packages to emphasize how pay and benefits positively impact their business. Let them know that offering benefits can improve customer satisfaction, retain employees, and save on taxes.
Gusto is your partner in accounting and advisory, and we’re here to show you the biggest trends impacting your profession. As always, we’re excited to partner with CPA Academy to bring you these insights. The webinar, “Advise Clients on Benefits With a Simple Framework,” featured Jaclyn Anku and Caleb Newquist, and you can watch the full webinar here. The duo discussed how benefits can increase job satisfaction leading to better performance and long-term loyalty.
As Partner Education Manager at Gusto, Jaclyn Anku is an expert in financial literacy for small businesses. As a former business consultant, she is passionate about people services and believes that financial stability and well-being go hand in hand. Caleb Newquist is the Editor-at-Large at Gusto. As the founding editor of the accounting publication Going Concern, he combines his editorial eye, content expertise, and accounting background to help CPAs thrive.
The current state of employee benefits
It’s no secret that much of the American population lacks sufficient health coverage, and people who don’t have employer-sponsored coverage often go without it at all. This leads to consequences such as medical debt, high stress, or poor health due to a reluctance to visit a doctor. Additionally, employees who lack coverage impact their employers’ bottom line in a number of ways. Employees who are undergoing financial and medical stress are more likely to be distracted, unmotivated, or absent from work, yet many employers still don’t offer benefits. In fact, most don’t.
“Only 47% of businesses with three to nine workers offer any form of health coverage, and most small businesses only have three to nine workers. Most businesses are small, so that’s quite a few people who don’t receive health insurance through their employer. … When employers do not offer health insurance, individual employees have to turn to the individual market. The implication of this for many Americans is that the monthly cost of health insurance is out of reach because they have to pay 100% of their premium, which means that they either go uninsured or under-insured, which can be a cause of considerable financial stress and even medical debt.”
– Jaclyn Anku
The fact that there is a high number of businesses that don’t offer health coverage means there are many candidates you have the opportunity to serve. Look to your current clients, and you’ll likely find golden opportunities to assist with benefits enrollment.
A four-step framework for benefits
You can use a simple four-step framework to discuss benefits. You’ll want to cover why your clients should offer benefits, what the benefits are, when they’ll be able to implement them, and how they can do it.
Let’s start with why. Explaining to your clients why they should offer benefits is critical. In describing why offering benefits will help employers, you’re overcoming widespread misconceptions about the viability of benefits.
“Educating clients on why benefits matter and how they can positively impact both their employees and their business is probably the most important thing you can do as a people adviser. … The major blockers that are standing in the way for that 47% of small businesses who don’t offer [benefits] are typically lack of awareness around what they can provide, how to get started, or this misconception that benefits are financially out of reach. If you’re able to just even scratch the surface and demystify benefits a little bit [and] put them in touch with the right resources, that goes a very long way.”
– Jaclyn Anku
Next, you’ll touch on the what. As a people advisor, clients don’t expect you to be an expert in benefits—that’s what licensed benefits providers are for. But you do want to have a good understanding of what packages are available. You’ll want to cover types of benefits, including those that go beyond health insurance. Show your clients that there’s more to benefits than they might be aware of.
“This doesn’t have to be super detailed. It can really just be the storytelling around what benefits are. I think most people, including myself up until I started learning a little bit more about benefits, just default to assuming that it’s all about health insurance, that all our employers can really offer is health insurance, or that’s all employees expect, … [but] employees’ expectations of employers have risen around what they can provide in terms of the benefits package.”
– Jaclyn Anku
Only offering health insurance no longer meets employee expectations, and your clients’ benefits packages should reflect that. Employees need benefits packages that cover them now and in the future. That’s why it is important for your clients to offer retirement options such as 401(k) in addition to a solid health plan.
Once you’ve established the why and the what, you can touch on the when. Emphasize that there’s room for flexibility. Ask the client about their budget. What can they offer over a specific time period? What works for them in the immediate term, the short term, and the long term? Let them know there are options.
“Benefits [don’t] have to be an all-or-nothing effort. It’s not like you offer it or you don’t. There are ways to grow into benefits over time.”
– Jaclyn Anku
Finally, you’ll get to the how. Thankfully, the how is left up to professionals.
“We don’t expect people advisers to do the ‘how.’ There’s a huge difference between people advisers and licensed benefits advisors, and in fact, that’s the role that Gusto plays. We have this incredible team of licensed benefits advisors as well as a robust benefits product offering that integrates with our payroll.”
– Jaclyn Anku
By partnering with Gusto, you can completely outsource that piece of your advisory to a trustworthy expert. Your job will be to inform your clients about benefits and motivate them to pick them up, but your job should never be to lay out specifics of packages or advise your clients which ones to pick.
“Only licensed benefits advisors like Gusto can make representations about health insurance products and provide advice on which benefits options to choose. If we think about this another way, people advisory is a team effort. You help clients understand why benefits matter and how they align to business goals, and Gusto can help them with benefits set up, open enrollment, and ongoing administration, so it’s this really neat ‘better together’ story with each partner playing to its strengths.”
– Jaclyn Anku
Giving compelling reasons for clients to provide benefits
There are incredibly compelling reasons for employers to provide benefits. You can explain to your clients that taking care of their employee’s well-being will positively impact their bottom line. Benefits matter just as much or more than a salary to most people. Not only that, benefits support employee well-being, which means fewer sick days, higher levels of productivity, and more motivation. In addition, happy employees who like where they work are more likely to stay longer, which reduces recruitment and training costs.
Employee performance directly improves customer satisfaction. Studies conducted by Harvard Business School showed that happier employees created more satisfied customers, and satisfied customers spent more money and were more loyal to that brand.
“This is not rocket science here. I love going to my local coffee shop. I love going to my local taco shop because they know me, and I’m happy to see them, and they’re happy to see me. It feels like so much more than just buying a taco. I get to go say hi to my friends who work there, so it’s just us being human, right? We like being around happy, positive energy, and people are happier when they’re healthy.”
– Jaclyn Anku
Happier employees mean happier customers, and employees who enjoy their work and interactions with customers are more likely to stay. It’s a positive feedback loop. Employee satisfaction increases when employers offer benefits. In fact, benefits may mean even more than money.
“Many employees prefer benefits to a salary hike. That makes very practical sense because, if you think about it, if an employer didn’t offer benefits, say they gave an employee … a $5,000 raise and that employee got into an accident, that $5,000 wouldn’t go very far in covering the cost of their medical treatment. Health insurance would go a whole lot farther.”
– Jaclyn Anku
Furthermore, a study by LinkedIn showed that companies rated highly on compensation and benefits saw 56% lower attrition. When you look at all the ways that offering benefits positively impacts a company and its bottom line, pitching benefits becomes an easy sell. Show your clients how investing in benefits can continue to grow in value and bring rewards over time, and show them that it pays to continuously reinvest in it.
“When you think about tying this back into helping them develop that holistic benefits package over time, if they are seeing real bottom-line results increase as a result of offering benefits, you can advise them to reinvest that money into further bolstering their benefits package.”
– Jaclyn Anku
Lastly, you can ask your clients if they want to know how to save on taxes. Explain to them that by offering benefits, they may be eligible for tax breaks and savings that will benefit their bottom line.
Learn more about why people advisory is the “new normal”
Employers have a lot to gain by providing benefits for their employees, but most don’t realize their available options. Most think that offering benefits is financially out of reach, and many don’t understand how employee well-being impacts their organization. There is solid evidence that happy people perform better at work, are less likely to leave, and have more positive interactions with customers. This impacts organizations in a multitude of positive ways. From a purely financial standpoint, it makes sense to offer benefits packages. Advisors should explain these compelling reasons why before diving into the what, when, and how. Only licensed advisors should advise on specific benefits and which ones are right for a client.
Gusto’s mission is to create a world that empowers a better life. Our goal is to help you bring more value to your clients and their companies as an advisor. If you haven’t already, check out our other articles based on the same webinar: “Why People Advisory Is the ‘New Normal’” and “Gusto’s Premium Benefit Packages for Your Clients“.
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