Reducing Costs of Benefits

MBA 5045 – Strategic Human Resource Planning

Shirley Muhato

10/24/2018
Shirley,

I enjoyed your reducing benefit costs paper this week. You did a good job describing what the Formatted: Space After: 10 pt, Line spacing: Multiple 1.15
li
organization currently offers and how that is working. You also did well exploring what should
be assessed and what could be adjusted. Good approaches offered and sound
recommendations. Nicely done piece!

Expectations Expectations Expectations Exemplary

not accomplished, accomplished accomplishment-
accomplished but some Expectations
aspects are exceeded. Work
missing is scholarly
Below 70% 70-89% 90-95% 96-100% Points Points
Possible Earned
Content : Content is 95% 65 61.75
comprehensive, accurate, and/or
persuasive; demonstrates insight
into the material.
Critical Thinking, Analysis, & 95% 25 23.75
Theory Application: Work
displays graduate level analysis
and critical thinking. Work
effectively incorporates timely,
relevant, and applicable sources
at an appropriate level. Source
ideas do not dominate the work.
Writing & Readability: Work 93% 10 9.3
follows the APA format and
displays a well formed approach
with an introduction, body, and
conclusion. Sentences and
paragraphs are well constructed,
have proper transitions, flow
logically, and use proper
grammar, punctuation, and
spelling. Content is complete,
clear, and understandable.
100 94.8

Table of Contents
Executive Summary ............................................................................................................................... 32
Corporate Strategies to Reduce the Costs of Benefits ............................................................................ 32
Consider Outsourcing HR to a PEO ..................................................................................................... 32
Investigate the market....................................................................................................................... 32
Choose higher deductible plans ......................................................................................................... 32
Offering employee discounts on Wellness Program ........................................................................... 43
Manage benefits cost with technology .............................................................................................. 43
Educating Your Employees .................................................................................................................... 43
Conclusion............................................................................................................................................. 54
Works Cited........................................................................................................................................... 65
Executive Summary

The following Human Resources Plan is presented for the purpose of the strategic planning of reducing
the costs of benefits within the organization, Canada Commercial Bank.

It will take a look at two major areas; including:

1. Ways in which corporate can reduce the costs of benefits, and

2. Ways in which employees can help themselves when selecting benefits.

As much as it is necessary for organizations to meticulously scrutinize their expenses and skim off
whatever is not absolutely necessary, organizations must be willing to not only give their employees
alternative options, but also, to educate them on the said options currently available.

Corporate Strategies to Reduce the Costs of Benefits

Consider Outsourcing HR to a PEO

Outsourcing HR to a Professional Employer Organization (PEO) can considerably reduce the cost Formatted: Indent: First line: 0.5"
of the employee benefits. These organizations put all their clients into a pool, and with this information,
they then approach insurance companies with a package deal. For example, at Canada Commercial
Bank, employees are privy to Manulife Insurance. This insurance company is a multi-billion dollar entity
and has varying rates depending on size of company, age of employees, and premium strategies. By
grouping everyone in the company together and using a third party HR provider for benefits
administration; the company can eliminate the utilization of “age bands” put in place by organizations Commented [PW1]: Quote marks should only be used for
actual quotes from a source. When you want to emphasize a word
such as Manulife Insurance. or phrase, use italics instead.

Investigate the market Commented [PW2]: Good idea!

The process of finding the right provider can be mostly draining. There is a lot of information out Formatted: Indent: First line: 0.5"
there in this day and age; and establishing the right combination of plans may be a short term strategy,
but this plan has a long term impact. As rates are changing every year, organizations need to create a
tendency of investigating the market each year in order to remain very competitive for their employees.
Investigating the market can give you the chance to find more good advice like the opportunity to shift
to Consumer Directed Health Care programs, which are customized to meet the needs of a specific
group employee benefits plans (Procure Desk, 2018). Commented [PW3]: Yes ongoing evaluation is needed.

Choose higher deductible plans

The traditional health and dental plans work through a system that is reliant on the amount of Formatted: Indent: First line: 0.5"
deductible the person insured is able to put in. A high deductible plan typically means that the following
deductibles will subsequently be just as high. Although this strategy heavily relies on what the insured
employee is physically able to pay, the organization is capable of matching what the insurance company
will pay in order to further reduce the subsequent deductibles of the employee. This incentive
significantly helps the employee, as a common factor to a good insurance plan is the initial deductible. If
the organization invests in its employees at the very beginning, these higher plans will then save the
organization money in the long run as employees will no longer be obliged to pay additional costs. Commented [PW4]: A good approach!

Offering employee discounts on Wellness Program

As terminal illnesses continue to increase and burden a lot of individuals, health and wellness Formatted: Indent: First line: 0.5"
have been the center of a lot of conversations. For example, according to the National Breast Cancer
Foundation, one out of eight women will be diagnosed with breast cancer in her life time (National
Breast Cancer Foundation, 2018). This number is astonishing a long term strategy is necessary to curb
this issue. Considering there is not an exact science on how to reduce these risks, health and wellness
programs have been created to help these efforts. For example, Canada Commercial Bank has a number
of options that can be used together in a package to help employees pay for various programs. These
may include, stress counselling, fitness programs, general well-being such as naturopathic treatments,
and even fertility treatments. All these efforts give employees the ability to take better care of
themselves, and therefore, productivity in the workplace will increase. Commented [PW5]: Long term impacts are looking really
positive for this area.

Manage benefits cost with technology

Although lower premiums and better insurance packages are a key factor in reducing the cost of Formatted: Indent: First line: 0.25"
benefits, a significant aspect of this strategy includes technology. Organizations are more and more
gravitating towards technology to lower their costs by expanding their usage through automation and
employee self- service. Some of the savings can come from:

 Running faster transfers of registration information to benefits carriers.

 Realizing important savings in time required for preparation and entry of data.
 Boosting employee satisfaction with benefits information access.
 Cutting down information errors in benefits admission. Commented [PW6]: Round out the bulleted ideas before
moving to the next section.

Educating Your Employees

In addition, organizations have the responsibility to ensure that their employees are well educated Formatted: Indent: First line: 0.25"
on their benefit plans and packages. Unfortunately with a lot of information being accessible online
through various platforms, organizations have pulled away from having physical information given to
employees. A number of areas that an organization can work on include the following.

1. Provide personal HR expertise

2. Give your employees the right questions to ask
3. Keep the benefits conversations going with your employees

By providing personal HR expertise, organizations allow employees to have access to the right
information, and not just bombard them with all and any information. This includes the right tools, as
well as, access to HR professionals to answer questions. In addition, employees need to know the right
questions to ask. For example, what is in the new benefit options that might be beneficial to me and my
family or are there any new voluntary benefits, such as EMS options. Finally, organizations need to be
able to keep these conversations going. Many employees are not aware that their unused benefits may
be available to them in the form of unused flexible spending account funds before the plan year ends.
Also, the education on retirement savings, including the employer matching contribution formula, and
how to maximize the impact of employee contributions, as well as required notices, such as the
participant fee disclosure notice, the summary annual report, and the qualified default investment
alternative (TriNet, 2018). These conversations need to be on a constant cycle as information is also
changing. Commented [PW7]: Great point about keeping people
informed.

Conclusion
In conclusion, organizations including Canada Commercial Bank have the responsibility and Formatted: Indent: First line: 0.5"
obligation to care for their employees. It is necessary to not only have accessible information, but to
consistently check-in on the needs of all employees, as well as be aware of the impact of both physical
and mental health. Although it is a fine line between providing the right benefits and maintaining the
costs incurred by the organization, employee satisfaction must be at the top of the list in terms of ways
to improve productivity and efficiency within the organization.
Works Cited Commented [PW8]: Works cited is the MLA format. APA uses a
reference page.
Procure Desk. (2018, 01 01). Ways SMBS Reduce Employee Benefits Cost. Retrieved 10 24, 2018, from
Procure Desk: https://www.procuredesk.com/10-ways-smbs-reduce-employee-benefits-cost/

TriNet. (2018, 04 05). Help Your Employees Help Themselves. Retrieved 10 24, 2018, from TriNet:
https://www.trinet.com/hr-insights/blog/2018/benefits-101-how-to-help-your-employees-help-
themselves-when-selecting-benefits-options