Craft a Winning Benefits Strategy: An HR Guide to Attract & Retain Top Talent

Attracting and retaining top talent is a leading concern of most companies today. High turnover rates are not only costly but can also hinder productivity and set your business behind. As an HR professional, your goal is to bring in highly experienced, skilled team members — and encourage them to stay. One of the best ways to do that is with a great benefits strategy. 

A well-planned, thoughtful benefits strategy boosts both your business and your employees. These strategies often include financial benefits, such as retirement savings and dependent care support, as well as perks that promote workplace wellness.

This guide will cover crucial elements of a winning benefits strategy, plus steps to build a strategy that helps your business employ and retain talented workers.

What Is a Benefits Strategy?

A benefits strategy is a comprehensive plan designed to provide employees with a range of perks and advantages. This blueprint encompasses every aspect of your benefits package: cost, ROI, implementation, eligibility, and more. It’s essentially a roadmap that guides your business in supporting your employees to the best of your ability, maximizing your employee value proposition.

A key element of your benefits strategy is determining which benefits employees value most. That includes major benefits like healthcare, of course, but you should also consider other perks that can significantly improve your employees’ work-life wellness. Around 86% of U.S. employees have access to health insurance through their employer, according to data from the U.S. Census Bureau. However, Wellhub’s latest State of Work-Life Wellness report shows that 93% of employees believe their wellbeing at work is just as important as their salary — that means healthcare alone won’t cut it.

On top of deciding which benefits are included in your package, your benefits strategy should also determine the cost and ROI of each benefit, plus a plan for implementation. A well-designed benefits strategy also incorporates steps to receive feedback and make changes depending on your employees’ responses.

Why a Benefits Strategy Is Important

Job loyalty has significantly declined in the past few years. Around 25% of U.S. workers reported that they had recently quit or planned to quit their jobs in a 2021 World Economic Forum Survey. Of those respondents, many wanted more flexibility or better work-life wellness. 

Replacing an employee is expensive. It can cost as much as four times that position’s salary, according to the Society for Human Resource Management. Those costs include time spent recruiting and training new hires. On top of that, high turnover rates harm team development and can create a less friendly work culture, as employees simply don’t have time to bond. 

That’s why smart employee benefits are strategically critical. A benefits package that includes wellness support will increase employee happiness and encourage your team members to stay and grow with the company. It also attracts skilled new hires when you need to grow your team.

Unfortunately, no company can offer its employees everything. A benefits strategy helps HR teams and company leaders plan ahead, providing the best possible benefits package without overspending.

Get More Out of this Employee Benefits Series:

Key Components of a Successful Benefits Strategy

What goes into your benefits strategy? That all depends on your resources, goals, and employees’ preferences, but here are a few key components of a winning benefits strategy.

Essential Benefits

A benefits strategy starts with the basics: standard benefits that are required by law. These include:

• Health insurance (if your business employs 50+ people)
• Unemployment insurance
• Disability insurance (in some states)
• Social Security contributions
• Family and medical leave (if your business employs 50+ people)

Minimum requirements for these benefits vary by state. However, your employees will generally expect more than the legal minimum. For example, even if dental insurance isn’t legally required, most workers look for employers who offer it as a part of their health package. 

Other essential benefits — those employees expect even if they are not required by law — include:

• Life insurance
• Retirement plans
• Paid maternity leave or family leave
• Stock options

These perks are likely already incorporated into your budget. However, if you’re rethinking your benefits strategy, now is a good time to reassess each plan you offer and make sure it is meeting your employees’ needs. Expanding certain essential benefits could lead to a higher ROI if it boosts employee retention.

Wellness Benefits

A truly comprehensive benefits package offers more than just the essentials. A winning strategy incorporates smaller, less common perks that boost work-life wellness. Examples include:

• Flexible work hours
• Remote or hybrid work eligibility
• Gym memberships
• Mental wellbeing programs
• Healthy snacks and drinks
• Regular team-building activities

These benefits help employees stay well in and out of work. They can go a long way to increase productivity and build a happy, supportive work culture. Your benefits strategy should plan for the upfront costs and potential ROI of each benefit. It should also account for your unique workplace — make sure you incorporate the wellness benefits that are most valuable for your industry and employees.

Open Communication

Open communication is a crucial element of any benefits strategy. After all, this strategy is designed to support your employees. Without their input and feedback, it won’t be as effective. Communicating with your team about the benefits they most value will help you optimize your strategy for current and future employees.

Communication in your benefits strategy may look like:

• Meeting with individual employees
• Sending company-wide surveys
• Evaluating existing benefits
• Asking current employees which benefits will help them feel most supported
• Asking about benefits in the interview process

While it’s impossible to satisfy all employees’ individual preferences, it’s important to consider every perspective. You can support a diverse workforce by including all team members in the strategizing process. Good communication can also be seen as a benefit itself — your employees will feel more valued if they know their input makes a difference.

How To Create and Launch Your Benefits Strategy

Launching or revamping a benefits strategy doesn’t have to be complicated. However, this process definitely shouldn’t happen overnight. It takes time, communication, and careful planning to create the best strategy for both your employees and your business’s bottom line.

Every workplace is different, and no two benefits strategies will look exactly alike. Here are some basic steps you can take to create and implement a winning strategy that perfectly fits your business.

Step 1: Consider Your Long-Term Business Plan

Your benefits strategy must align with your overall business strategy. It should support rather than detract from long-term goals. 

For example, if your business is focused on expansion, your benefits strategy should be geared toward attracting new talent — consider affordable benefits that will appeal to new hires at all levels. If internal growth is more important, your strategy should include merit-based perks that encourage employees to work toward leadership roles. Companies on a restricted budget can plan their benefits strategy around reducing onboarding costs.

At this stage in the strategy process, you may want to meet with company leaders and stakeholders to better understand the company’s long-term growth plans. A benefits strategy that aligns with the big picture is more sustainable and more effective in the long run.

Step 2: Outline Your Goals

Before hammering out the exact details of your benefits strategy, you should know exactly what you want to accomplish. Examples of goals for a successful benefits strategy include:

• Implementing X wellness-focused benefits by the next quarter
• Receiving an average score of X on employee satisfaction surveys within X months
• Hiring X new employees by the end of the year
• Lowering turnover rates by X% within X years

Notice that each of these goals includes a measurable number or score and a timeline? That makes them as clear as possible. When outlining goals for your benefits strategy, consider the SMART method: every goal must be specific, measurable, achievable, relevant, and time-bound.

Step 3: Establish a Budget

Next, it’s time to set your budget. Although a comprehensive benefits package should produce a high ROI in the long run, it will come with an upfront cost. You should know exactly how much cash your business can spare for a benefits package before making any promises to your employees.

Benefits can cost up to 30% of an employee’s total compensation, according to 2024 data from the Bureau of Labor Statistics. Your budget should account for current employees as well as future hires if your business is currently expanding. 

When planning your budget, remember that there are ways to cut costs without slashing benefits as some perks can save your company money in the long run. Wellness benefits can help reduce healthcare costs by keeping employees mentally and physically well, for example.  And other attractive perks, such as flexible hours or work-from-home days, can boost hiring efforts at little or no cost to the company.

Step 4: Get To Know Your Team

Not all employee benefits are created equal. It’s important to spend your benefits budget on strategies that will most impact your employees, regardless of what’s currently popular. For example, if your business employs a lot of working parents, you’ll probably get a better ROI from on-site childcare services than an on-site gym. If your workforce trends young, value-based benefits such as volunteer days or charitable donations might attract more new hires. 

At this stage, it’s vital to consider diversity and inclusion. Consider benefits that support neurodiversity in the workplace, empower women and people of color, and make your business appealing to a more diverse workforce. This will both expand your hiring opportunities and help your employees feel included.

You can collect data on your workplace through internal surveys and hiring data. To learn more about prospective hires, research demographics in your industry. Remember that your particular business model matters, too — if most employees work remotely, they’ll appreciate community-based perks like access to coworking spaces or local gift cards.

Step 5: Get Specific

Now it’s time to nail down the details. Plan the ins and outs of every potential benefit in your strategy, including:

• Cost: Determine the full cost of each benefit, including changes to working hours and productivity. 
• Eligibility: Who is eligible for each benefit? How can employees access merit-based benefits?
• Providers: Compare potential benefits providers, such as insurance companies, corporate wellness programs, counselors, and food suppliers, to find the best fits.
• Distribution: How do you plan to distribute benefits? Can employees opt in to certain programs, or are they automatically enrolled?
• Long-term outlook: Estimate how long it will take to reach your ideal ROI for each benefit.

This is not an exhaustive list of factors to consider. Every organization is unique, so the exact details of your benefits strategy may look different from the company across the street.  Be sure to consult with team leaders throughout your company to make sure you aren’t missing any potential challenges before you implement your plan.

Step 6: Launch Your Strategy (With Open Communication)

It can be helpful to launch your new benefits strategy at the start of a financial quarter or year — it gives you a date to benchmark your KPIs against that aligns with your company's fiscal reporting. 

Be sure to maintain open communication before and after the launch. Explain the details of the new benefits to your employees and set aside time to answer questions so everyone knows exactly what to expect.

Step 7: Track Progress and Make Changes

To make sure you’re meeting your goals, track your progress and prepare to adapt. The most effective benefits strategies are flexible, designed to grow and change with your business. 

There are two key ways to measure your strategy’s effectiveness:

• Key metrics: Remember those SMART goals you laid out? Track your progress toward each goal, whether it’s ROI, growth rates, or retention.
• Employee feedback: Ask your team for feedback at quarterly or annual milestones. Anonymous surveys are a great way to hear your employees’ honest opinions and spot opportunities for improvement.

External factors can impact your benefits strategy, too. For example, changing wellness trends might make new perks more attractive to your team. Economic changes might impact your budget. It’s important to reassess your strategy on a regular basis, ensuring your business’s and employees’ needs are still being met.

Great Benefits Start With a Great Strategy

A comprehensive benefits package is one of the best ways to attract and retain top talent in your industry. But you can’t just launch benefits willy-nilly — careful planning, data-backed goal setting, and open communication will help you craft a winning benefits strategy that aligns with your business’s long-term goals.

Alongside essential benefits like healthcare, employee wellness is a vital element in any successful benefits strategy. Perks that support your team’s mental and physical wellbeing are both incredible recruiting tools and valuable investments in employee retention.

Interested in an employee wellness program with a high potential ROI? Speak with a Wellbeing Specialist today to get started!

You May Also Like

• Lifestyle Spending Accounts (LSAs): A Comprehensive Guide for HR Leaders
• Employee Benefits Guide for HR Leaders
• Why Are Benefits Strategically Important to Employers Today?

References:

• Grundy, A. (2024, February 29). Medical Expenditure Panel Survey — insurance component shows 86% of private-sector employees worked for establishments that offered health insurance. Census.gov. https://www.census.gov/library/stories/2024/02/health-care-costs.html
• Employee loyalty is declining. Here’s how to build it back. World Economic Forum. (n.d.). https://www.weforum.org/agenda/2021/11/employee-loyalty-declining-how-to-build-it-back/
• Navarra, K. (2023, December 21). The real costs of recruitment. Welcome to SHRM. https://www.shrm.org/topics-tools/news/talent-acquisition/real-costs-recruitment
• U.S. Bureau of Labor Statistics. (2024, June 18). Employer costs for employee compensation summary – 2024 Q01 results. U.S. Bureau of Labor Statistics. https://www.bls.gov/news.release/ecec.nr0.htm