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Managing Benefits in Uncertain Times
HR benefits managers face a world of
change. Economic pressures, industry
challenges and updated compliance burdens can be disruptive, requiring new
offerings or rendering existing perks too
expensive to continue.
When that happens, you need to
be ready to react. “The key to managing employee benefit plans during a
period of uncertainty is to plan ahead,”
said Rosemary Hughes, a principal with EPIC Insurance Brokers and
If a pending development could result
in a loss of jobs—perhaps a merger is in
the works—or if an economic downturn
would depress the organization’s revenues, it may be time to ask your vendors
to end one or more benefits contracts
Uncertainty may also result from new
regulations regarding employee health
insurance or state-mandated paid leave,
for example. Laws on pay equity may
also affect benefits such as stock options
and retirement plans tied to salaries.
Generally, you should postpone altering any affected plans until there is some
certainty about the future. In the meantime, “think through the potential impact
on [your] programs while still complying
with current law,” Hughes said.
Building a Framework
When dealing with uncertainty, keep
these considerations in mind:
Know where you are going. You
can’t control what’s happening outside
the organization, but you can choose
how you deal with it. That’s why it’s
important to have an overarching strat-
egy about benefits. With a set of guid-
ing principles in place, you can make
decisions that align with your goals.
“Without this, things become more
complicated and company leaders may
not be on the same page” when making
decisions, said Jackie Breslin, director of
human capital services with HR consulting company TriNet.
A strong benefits philosophy can
guide multistate employers when federal
regulations are rolled back, for example.
It could call for consistent treatment of
the full workforce regardless of where
employees reside. That, in turn, could
lead the organization to adhere to the
requirements of the most generous state
in each circumstance.
Get a picture of where the company
stands. An internal audit of benefits
plans can show exactly what your organization offers, to whom and at what
cost. “When it comes time to make a
decision, having this information allows
employers to react faster to new developments because they already know where
they are,” Breslin said.
Know when to act. If the probability
of a disruptive event is high, spend some
time and energy sketching out a “Plan
B” for how to react in the event that the
For instance, if a company is in danger of losing its largest and most important customer, Plan B could include a
checklist of steps that could mitigate
the financial damage, including
potential actions involving benefits plans.
Get the executive team involved.
Close working relationships between
HR executives and other department
heads can pay big dividends. The CEO
can lead overall policy discussions, the
CFO can clarify the financial implications of a situation, operations executives can help front-line managers and
employees understand changes that
could affect the business, and general
counsel can disclose legal requirements
Communicate with employees. It’s
crucial to let employees know about
potential changes. Even in situations
where the outcome is unknown, such as
with possible repeal of the Affordable
Care Act, workers may have concerns.
“They will want to know, ‘What does
this mean for me?’ ” Hughes said. Have
a communications strategy and make
sure managers have the information they
need to support workers. In most cases,
“it may be helpful to let them know the
company is keeping an eye on the situa-
tion and will keep them posted as to the