Employees see in dollars NOT percentages

When you’re a business owner for the most part fixed costs are good, unfortunately the way healthcare is that part of your business is anything but fixed. As time goes on people get married, divorced, and have children, and your plan becomes more and more costly but your employees don’t always see the value.

Repeat after me, “People see in dollars, NOT percentages”.

I used to work with an investment advisor, who told me a story once. When he was starting out, he was evaluating client’s portfolio and asked the woman (In a down market) if she would be happy with a 10% rate of return on her $300,000 investment. The woman thought for a second and said to him “That’s the best you can do?” The advisor was confused, as no one had ever given him that response before. He then asked the woman “would you be happy if I was able to earn you $30,000 a year in interest?” The woman almost did a double take and said “Are you kidding me? That would be incredible”. The morale of the story is… PEOPLE SEE IN DOLLARS NOT PERCENTAGES.

So, how does this relate to Employee Benefits? If you’re a business owner and your giving your employees a fixed dollar amount toward their benefits employee can quantify that and will appreciate it. Your employee now becomes aware of the TOTAL cost and will be thankful for what you offer them. Instead of them saying “I have to pay $400 toward benefits” like there getting a discount, there actually saying “My employer paid $400 toward my benefits and I have to pay the other $400”.

Sometimes employees are just handed the bill for there benefits, and they have NO IDEA how much you contribute for them. Let them know, they’ll tend to appreciate you more.

Also, when your renewal comes in and its more expensive, you can say to them “I decided to contribute $420 this year” and you look like a hero.

Where this also helps the businesses save money is you can offer multiple plans but keep your benefit cost fixed.

Here’s an example below:

Option 1 Plan Cost: $1200
Option 2 Plan Cost: $1000
Option 3 Plan Cost: $800

If you decide to pick up 50%, you would pay $400 for option 3, $500 for option 2 and $600 for option 1. But if you offer a fixed amount, you allow your employee to pick which plan best fits there needs, WHILE THINKING OF COST.

Some clients will prefer the best option (Option 1) but they will be willing to pay the difference because the improved coverage means something to them, they will be grateful that they have the choice. Where as someone who doesn’t care about benefits or a drug card (Maybe a 25 year old) doesn’t want to pay more and will be thankful they also have a choice.

Remember… “People see in dollars NOT percentages”.

If you have any questions you can always reach me at 631-338-9917.