An employee benefits program is one of the important things that an organization has to showcase about itself. It not only helps in retaining the workforce but also plays an integral role in attracting new talent. It won’t be wrong to say that employee benefits can enable an organization to handle its human resources in the best possible manner.

Employee benefits have become a staple HR process that every small and large organization has to care of. However, its management is still evolving and needs a lot of improvement, particularly among small-and-medium-sized enterprises. Most of them continue to have a “bare minimum” attitude in the provision and management of employee benefits, and that too because they are bound to federal and local work and labor laws.

Employee benefits management is as important as the provision of those benefits. Why is employee benefits management important, and how should an organization approach it? We will answer these questions in detail in this post.

Why Employee Benefits Management Is Important

Before outlining steps to devise effective employee benefits management protocol, we need to discuss why this relatively new type of HR management activity is required in the first place. We will list some of the solid reasons for an organization to focus on proactive employee benefits management.

  • Helps an organization analyze how it is faring compared to peers.
  • Assists businesses to keep their cash inflow and outflow in check.
  • Enables organizations to project themselves as a fitting employer for young talent who gravitate more towards good benefits than basic salary.
  • Helps enterprises draw a relationship between employee satisfaction, productivity, absenteeism, etc., with their benefits provision.

How to Have Effective Employee Benefits Management

Employee benefits management is not a one-time task. HR desks need to work continuously to manage benefits affairs. Nonetheless, if they follow a certain roadmap to establish the foundation of benefits management, they can deal with it more effectively and without burning themselves out.

1. Determine Employee Needs and Shortlisting Them

Picking any boilerplate program and implementing it in your organization is not the best way to offer workers benefits. You need to consider a host of factors to determine what your employees essentially need and want. A millennial and Generation X workforce will have different needs and wants than Baby Boomers. Similarly, it would be beneficial if you differentiated between essential benefits and luxury benefits.

For instance, health insurance and retirement saving plans are essential worker benefits that every employer offers in light of relevant labor laws. However, gym memberships, paid sabbaticals, and bonuses are provided as per an employer’s prerogative. Some organizations offer them, and others don’t.

For small and medium-scale organizations, you need to strike a perfect balance between essential and luxury benefits. It is worth mentioning that luxury benefits don’t always have to be cost-intensive. Many cost-effective benefits are not just pocket-friendly but are also well-liked among employees.

For example, you can provide a flexible schedule and remote working options to your staff. Moreover, don’t keep a strict workplace dress code. It is another employee perk that won’t cost you a buck. Such no-cost benefits are really popular among the younger workforce and help you attract more human resources from the young talent pool.

Offering free lunch, theater passes, and sports events tickets are also some of the low-cost incentives for SMEs to make part of their benefits program.

In short, an organization must devise a benefits program that covers both essential and recreational requirements of its employees. An organization should also choose the benefits in light of the workforce’s age group and socioeconomic classification. When an employee benefit program has this much groundwork on its backend, its management automatically gets easier.

2. Factor in Benefits Expenses and Balance Them

Just like organizations need to balance essential and luxury benefits, they also need to ensure that the equation between benefits and expenses doesn’t skew a bit too much. In other words, organizations need to proactively and creatively work to reduce the cost of benefits.  By ‘creatively,’ we mean cutting costs but without affecting the outlook of the benefits program.

There are multiple ways in which organizations can achieve that balance.

  • Look for bundled coverage for medical, dental, and vision coverage rather than picking individual plans.
  • Offer a diversified range of voluntary benefits to keep the costs in check and let employees customize their coverage.
  • Leverage telemedicine and case management services to offer uncompromised benefits coverage at low cost.
  • Find perks with low cost and high impact and make part of your benefits program, e.g., flexible timing, gamification at work, etc.

3. Track the Benefits Provision in Real-Time Through a Software Assistant

It is the last and most important step of good employee benefits management. After determining the most suitable set of benefits and managing them at the best cost, your organization needs to ensure that they deliver these perks without any discrepancies. This is only possible with a robust, real-time tracking of how the workforce is using these benefits. HRM software can come in handy in keeping track of organization-wide benefits and their provision.

SimplyHRMS is a great HRM system for the provision and tracking of employee benefits. It is a lightweight HRM application that you can use on your desktops, laptops, and cell phones. From HR representatives to C-suite executives and employees, every stakeholder can access the benefits program on SimplyHRMS.

Employees can track and apply for their deserved benefits. On the other hand, HR professionals and managers can see and approve the provision and delivery of benefits through SimplyHRMS. They can also have a comprehensive overview of the accumulative provision of benefits.


By taking care of the three steps discussed above, organizations can manage their benefits programs in the best possible manner. On the one hand, they can develop a well-thought-out and ingenious benefits program in the industry. On the other hand, they will be able to keep the cost of providing those benefits in control.

Explore Microsys’ website to find out more about SimplyHRMS and particularly about its employee benefits management features.

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