Optimizing Employee Benefits for Roofing Professionals
The roofing industry continues to have pressure attaining gross profit margins. The competitive environment is, at times, creating undisciplined pricing and volatile swings with roofing contractors bidding on the same project. These factors create uncertainty and confusion in the marketplace. We recommend, to our 75 roofing clients, to take charge of their balance sheets by looking internally for budget enhancements rather than just seeking margins in the field. After the cost of labor and materials, the third largest expense item for most roofing professionals is the cost of insurance. The gross margin pressure makes it increasingly difficult to push the cost of insurance to include employee benefits onto your customers, as a cost of goods sold.
Some roofing companies will offer employee benefits to attract and retain a strong management and support team. They use their benefits program to deter workers from potentially claiming a “not at work” accident on their workers compensation policy, as that could impact their experience modification factor, thus increasing their insurance burdens. When consulting with future clients, we often find that the only time of the year some roofing professionals consider budget reduction strategies is at the anniversary date of their employee benefits program. Quite frequently there are meaningful budget reduction opportunities available if the insurance advisor and roofing professional are intensely focused on a benefits budget reduction strategy.
We recognize that many roofing professionals are confronted daily with important opportunities and production challenges. Some roofing professionals do not choose to allocate resources to aggressively explore potential cost reduction strategies far in advance of their benefits expiration date. Many roofing professionals assume health care costs are rising and benefits costs are escalating as well. As a trusted insurance advisor, we stress to our roofing clients not to take the attitude “it is what it is.” How many roofing professionals are encouraging their bookkeepers, CFOs and comptrollers to continuously expand their knowledge of the employee benefit programs available to in their marketplace? There are carriers seeking market share, and that creates a competitive environment which could lead to cost reductions.
Your insurance advisor should “dig deep” to achieve reduced insurance costs. Let’s discuss four areas roofing professionals should explore.
1. Aggressively embrace new and creative approaches to the traditional health insurance marketplace.
2. Implement wellness initiatives and programs.
3. Improve employee education related to benefit options through frequent and open communication.
4. Examine voluntary benefit offerings in the workplace.
There are creative alternatives that are helping roofing professionals elevate gross profit margins and enhance cash flow related to their employee benefits program. These challenging economic times require roofing professionals to step outside the traditional insurance arena and explore such areas as utilization costs, deductibles and trends.
If employees are in generally good health, health costs are going to be lower. Most companies do not provide an on-site fitness center, a walking trail or build a cafeteria to serve healthier foods. However, employers can make wellness an integral part of their company’s culture. Most health insurance carriers have websites that contain a wealth of nutritional knowledge and health tips. Some useful techniques are to encourage employees to educate themselves with good health practices, take regular beaks, pre-work stretching and most importantly, drink plenty of fluids during the workday. When “shopping” for employee benefit programs, it is important to request information from your insurance advisor about wellness initiatives and programs that insurance carriers are offering the insured. There are some insurance carriers that offer wellness initiatives such as smoking cessation programs, fitness facilities, weight loss programs and nutrition seminars either at no cost or a discounted rate to the employee. Your trusted insurance advisor’s commitment should be to seek cost-cutting measures to help their clients win in this brutal marketplace.
Employees must fully understand their healthcare options and plans. Educating employees about their health insurance results in making choices that can reduce premiums and out-of-pocket costs. If multiple plans are offered to the employees, they tend to be extremely frustrated attempting to make the right choice. During open enrollment, it is essential to have a representative from the insurance carrier and your insurance agent on-site to communicate in detail the benefit plan(s) being offered to employees. Many insurance carriers provide online support for the actual enrollment process and communicate updated healthcare information through e-mail, websites and newsletters. Although there is some production downtime, employers could profit from educating employees about company benefits.
Voluntary benefits are underutilized by many employers. These voluntary plans are designed to enhance existing company benefits. They can also be effectively used to lower the overall cost of medical premiums without placing unnecessary gaps in the coverage provided for employees. Voluntary programs can deliver solid protection for employees and their families at a fraction of the cost of a traditional medical plan. Employers can offer these voluntary benefits with the option of shifting the cost from the employee to the employer.
In conclusion, if employers and their insurance advisors continually examine and make the ongoing effort to reduce and minimize insurance costs, the employer will generally experience increased profit margins. The key to an efficient benefit package is to achieve the optimum balance between profit margins and the investments employers make to employees.
Employee benefits are a great way to retain and attract key personnel and substantially reduce fraudulent worker’s compensation claims. Roofing professionals that implement employee benefit program strategies that contain their budget will build a backlog and enhance their operating results.