Controlling Benefits Costs Employing Contingent Workers HRM Outsourcing essay
- Length: 4 pages
- Sources: 4
- Subject: Careers
- Type: essay
- Paper: #48902537
Excerpt from essay :
Human Resources -- Controlling Benefits Costs: Employing Contingent Workers, HRM Outsourcing
Employers have found that health insurance benefit costs are best controlled while making them attractive to current and prospective employees by offering multiple options and by encouraging/implementing the use of generic drugs. This is wise, as compensation plans directly impact strategic goal setting and achievement. The Human Resources Department spends considerable resources aiding in this process, as it directly affects talent acquisition, employee retention, job satisfaction, employee productivity and strong employer-employee relations.
Discuss How A Business Can Better Control Its Health Insurance Benefit Costs While Still Being Able To Use The Benefit Package As A Recruitment And Retention Tool. Give Practical Examples And Bring In Real-Life Business Examples (Including Employer Names).
A business can better control health insurance benefit costs while still being able to use the benefit package as a recruitment and retention tool by implementing a voluntary benefits package and by adopting a program encouraging the use of generic drugs rather than brand name drugs. Voluntary benefits allow: convenience through payroll deductions, sign-ups without medical exams; packages that relieve employees from having to shop on their own; enhanced trust in insurance carriers screened by employers for optimum products and services; and time savings for employees by presenting these products through the workplace (Anonymous, Controlling benefits costs, increasing productivity key employer concerns, 2010). The Aluminum Company of America (ALCOA), for example, offers several benefit options for medical costs coverage of its employees and their families (Aluminum Company of America, 2014). Developing its program over a period of time with careful use of an interdisciplinary team (Self-Insurance Market.com USA, 2013), ALCOA developed options of: a basic plan; a comprehensive plan; a health reimbursement arrangement (HRA); or a health savings account (HSA) (Aluminum Company of America, 2014). The basic plan is intended for people of generally good health who use their primary care physicians for most of their care, involves the lowest payroll deductions but could cost more if more serious medical services are needed (Aluminum Company of America, 2014). The comprehensive plan is intended for people anticipating more medical expenses, with higher payroll deductions but lower possible costs for more serious medical services (Aluminum Company of America, 2014). A health reimbursement arrangement is intended for people with low to moderate health expenses who wish to save for future health care, with higher out-of-pocket costs but contributions from ALCOA into an account for coverage of some costs (Aluminum Company of America, 2014). A health savings account is for people who wish to meet health care expenses after a deductible while maintaining an interest-bearing checking account to which the employee and ALCOA both contribute (Aluminum Company of America, 2014). ALCOA ideally provides options for multiple employee situations/desires and touts the advantages of these options for prospective and current employees, to attract highly skilled individuals and retain employees (Aluminum Company of America, 2014). A second method for controlling costs while attracting employees is the adoption of a plan that encourages the use of generic drugs at considerable savings to both the company and the employee (Anonymous, Controlling benefits costs, 2011). ALCOA, for example, has a prescription program that highly encourages the use of generic drugs and provides step-by-step instructions for their use over name-brand drugs (Aluminum Company of America, 2014). In these ways, ALCOA is a clear example of a large employer striving to control health care costs while offering a desirable benefits package to its employees and their families.
b. Discuss How an Organization's Compensation Plan (Specifically Health Insurance Benefits) Might Impact an Organization's Strategic Goal Setting Process.
A company's compensation plan, particularly its health insurance benefits, can impact its strategic goal setting process in several ways. The costs of its compensation plan can tie up or free up monies that could be spent on achieving the company's business goals. In addition, the company might tailor its health insurance benefits to attract a certain type of employee, for example, ALCOA's health reimbursement arrangement, which would tend to attract employees with to moderate health expenses who wish to save for future health care, with higher out-of-pocket costs but contributions from ALCOA into an account for coverage of some cost (Aluminum Company of America, 2014). Furthermore, ALCOA's offer of multiple options and implementation of generic drugs helps the company retain a loyal workforce because its employees receive adequate, equitable benefits that are ably provided and implemented by the company. Finally, a large company wishing to attract a more diverse workforce would tend to offer multiple options, as does ALCOA, in order to attract skilled employees from around the globe. In sum, a company's approach to its benefits can significantly impact its ability to plan and pursue its goals, the type of employee it will attract, and its ability to attract multiple types of employees.
c. Give Specific Examples Of Strategic Organizational Goals And Develop Human Resource Department Goals Related To Health Insurance Benefits To Help The Organization Meet Its Strategic Goals.
One strategic goal of a company may be the attraction of a diverse workforce. In order to meet that goal, the company would develop multiple options for coverage of health insurance costs. For example, ALCOA offers four options (basic, comprehensive, health reimbursement arrangement, and health savings account) (Aluminum Company of America, 2014), which should at least theoretically attract talented employees from all walks of life with various health-related concerns. In conjunction with ALCOA's development of these options, the Human Resources Department has the goals of: assisting in setting up an attractive compensation structure, including health insurance benefits, within the company's budget; clearly and effectively communicating the attractive compensation structure to current and prospective employees; establishing and constantly refining the processes for employee use of the compensation package so the administration of those benefits is as accurate, timely and effective as possible (GlobalPost, 2014). In these ways, the Human Resources Department strives to fulfill its ultimate goals of talent acquisition, employee retention, job satisfaction, employee productivity and strong employer-employee relations (GlobalPost, 2014).
d. Why Is It Important That The Administration Of Employer Pay Plans And Employee Benefits Plans Be Accurate, Timely And Effective? Give Specific Examples.
The administration of employer pay plans and employee benefits plans should be accurate, timely and effective because they are all directly related to talent acquisition, employee retention, job satisfaction, employee productivity and strong employer-employee relations (GlobalPost, 2014). As MetLife's 8th Annual Study of Employee Benefits Trends shows, accurate, timely and effective administration of these plans is directly correlated to these general company goals and failures in these areas creates difficulties in attaining these goals (Anonymous, Controlling benefits costs, increasing productivity key employer concerns, 2010). For example, an inaccurate, untimely and ineffective employee benefits plan that did not deliver promised coverage of health expenses would directly impact an affected employee's personal finances, satisfaction with a job that did not deliver promised benefits, relationship with his employer who reneged on a promised benefit, productivity because he/she would be less enthused about being productive for this employer, and loyalty because he/she would tend to look for other potential employers who would deliver promised health costs coverage. Through decades of research and practical experience, employers have found that their willingness and ability to accurately, timely and effectively deliver on pay plans and benefits directly impact employees, their relationships with employees, and the company's ability to achieve its strategic goals.
Through decades of research and experience, businesses have found that they can better control health insurance benefit costs while being able to use the benefit package as a recruitment and retention tool by offering multiple health coverage options and by encouraging and fostering the use of generic medications instead of brand name drugs. ALCOA, for example, offers multiple health coverage options depending on the employee's health concerns and financial desires.…