Many of my HR and Compensation colleagues are in the middle of the annual compensation planning process. They are gathering decisions from leaders on what merit increases to provide employees. And they are calculating the annual bonus payouts and preparing to grant long-term incentives.
For those of you who are responsible for total rewards (compensation and benefits), you are glad benefits open enrollment is done. But you are also thinking about your benefits design strategy and how to engage with current and potential providers/vendors for the request for proposal (RFP) process.
Don’t wait to start the design process for benefits until July or later. For many employers and HR leaders, that makes the last six months of the year more stressful than it needs to be.
Benefits design strategy steps and timeline:
1 – February/March: Review your current benefits strategy and align it with the company’s strategic goals
2 – March: Establish benefits plan goals and a budget
3 – April/May: Analyze employee demographics and benefit needs. Identify the gaps between current benefit offerings and needs.
4 – May/June: Choose plans and providers that will match the above criteria and solve the gaps. Start the RFP process in Q2 so you are ready for open enrollment in Q4.
5 – July/August: Develop an effective communication strategy and design an optimal employee experience.
6 – September/October: Test vendor/provider system integration and finalize communication materials and employee experience changes.
7 – November/December: Benefits open enrollment occurs.
Start early in the year so you have time to be intentional as you consider benefits changes and the resulting communications and systems implications.
Employees consider their cash compensation, equity, and benefits as they think about their willingness to stay with an employer. All the associated processes need to be done well to maximize the retention of your current employees.
And retention of current employees is less expensive then trying to fill open jobs.
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