BlogsSMART Benefits Decisions
April 27, 2016, by Ryan Miller
For most companies that provide above average employee benefits, this line item on their P&L ranks pretty high (typically top 3-5). Yet most companies are not able to measure the effectiveness of this investment. When that is the case, future decisions are made based upon loosely guided facts and opinions. This is tolerable at best, but should never be desired by a high-producing organization. So what instead? I say think SMART!
Many of you, if not all, have probably heard the acronym SMART when talking about goals. SMART (most often) stands for Specific, Measurable, Attainable, Realistic, and Time-bound. While I have worked with many business professionals, from sales to owners, who use the acronym for setting their own goals, I am surprised that I am not seeing people set SMART goals when it comes to their employee benefits (*note that this is not challenging anyone's intelligence level). Here below are brief thoughts as it relates to each letter of the acronym.
S - What specific goals do you want to accomplish with your employee benefits program? "Retain employees" and "save money" do not qualify as specific. Think deeper. An example may be: "I want to create a wellness program by [date to implement] that reduces the average employee sick time taken from 'x' to 'y' by [final goal date].
M - Every goal must be measured. So each one of the goals you desire above must have a quantifiable property to measure, and a means by which they can be measured. In my example, you measure current average sick time taken, future desired number, and a way in which you will measure that. Additionally, you will want to measure the participation in the wellness plan and it's net results.
A - If you have a goal to increase the production output of your organization (in order to increase revenue), you must make sure that the levers you desire to pull have the capability of attaining that goal. Don't set goals that you can't attain (but don't be afraid to set BIG ones!).
R - Similar to "A", you want goals that are realistic. Setting goals that your people and/or processes cannot accomplish is not the goal here. You want to make sure that your benefits offering is capable and your people are willing. You also need to make sure you have the right partners along the way. Missing those things, you may have unrealistic expectations.
T - This is a big one. I don't know how many times I have seen people set goals without a "by-when" date. Unfortunately in our business, those mistakes are just as often made by the broker consultant. If you, or one of your partners, puts a goal to paper, make sure there is a date of achievement associated with it. Saying you want to cut costs by 10% isn't good enough. Articulate that you want to see a 10% annualized reduction in expense by [date].
Hopefully this provides a bit of insight into why setting SMART goals around your employee benefits is so crucial!
If you have further questions related to this topic, please contact us at (714) 740-1111.
I also referenced wellness programs above and if you would like to know more about creating your own, download our free infographic here - 5 Steps to a Successful Wellness Program.