Recently, Global Children’s Charity has seen a reduction in its workforce. The organization decided to lower operational costs so that a larger part of the budget could be used for helping children. Now, when 15% of the staff has been downsized, the company seeks to optimize its benefits plan. The senior management team believes that changes in the benefit plan may help to reduce costs as well. Thus, in this report the author tries to identify the optimal benefits plan for Global Children’s Charity and proposes several cost containment strategies. The main aim of this paper is to show that Global Children’s Charity can achieve greater flexibility and lower costs through changes in its benefits plan and other practices.
Optimal Benefit Plan for Global Children’s Charity
Flexible benefit plans are rather popular these days with companies and seem to be the best option for Global Children’s Charity. Generally, the main feature of this type of benefit plans is the ability of employees to select particular benefits they need from the employer (“Flexible Benefit Plans”). At the same time, flexible benefit plans imply that employees partly cover the costs of their package by monthly deductions from their salaries.
It seems that both companies and employees benefit from the adoption of a flexible plan. Workers are given an opportunity to form a package that contains only the options they need. Organizations shift a part of the costs to employees, and thus, save some of the resources. It is especially relevant for small companies since they cannot use economies of scale when it comes to the funding of benefit programs (“Flexible Benefit Plans”). Global Children’s Charity consists of around 319 workers now, which means that the company is not that big. Therefore, it might be useful for the organization to adopt a flexible benefits plan.
Various types of flexible benefit plans exist, and Global Children’s Charity should choose the one that suits the goals and abilities of the organization better. It seems that “Traditional Plan with Flexible Options” is the optimal choice for the company (“Flex Benefit Plans”). This plan suggests that employees are offered the standard package of benefits but can “purchase more coverage at group rates” (“Flex Benefit Plans”). Moreover, workers can have an account that they will use for buying such options as Accidental Death Insurance. This plan corresponds to the aims of Global Children’s Charity and suits the capacity of the organization.
Cost Containment Strategies
The adoption of a flexible benefits plan can be considered as one of the cost containment strategies. Since employees will be given only a basic package of benefits and will have to choose other options they need, the company will save some finances. Another strategy is also related to health and implies that employers need to encourage their workers to stay healthy. It is evident that if a company promotes a healthy lifestyle, employees will have to visit a doctor less frequently, and thus, the organization will have to pay less money for that (“6 Great Cost Containment Strategies to Eliminate Business Debt Fast”). What is more, the company may try to change the demographic structure of their staff and recruit more youth. Firstly, young people are mainly healthier than the older generation, and they do not require so many expenditures. Secondly, it is possible to offer young people relatively low salaries compared to experienced workers.
The next strategy is somewhat similar to the previous and suggests implementing volunteering programs. The company will save a substantial amount of money if it uses volunteers for the realization of its mission. Volunteering is quite popular among young people, so it will not be a problem for them to do something for free. Finally, the organization can prevent some expenditure by reducing travel expenses. One might assume that the staff of Global Children’s Charity often has business trips. In this case, it crucial to ensure that these trips do not lead to cost pressures.
Delivering the Message to the Staff
When making a change in the organization, it is essential that employees fully understand the causes and consequences of these shifts. The top management of Global Children’s Charity may show workers the current structure of health expenditure and then explain how the adoption of the flexible plan will lower the costs. However, it is vital to show the potential effects of this shift on the realization of the company’s mission. When addressing the issue of a healthy lifestyle, the management probably should not focus on costs but rather say that the company needs healthy workers. Furthermore, managers may claim that young people and volunteers are the most effective workers and require fewer expenses on their health. Finally, it is also important to stress that Global Children’s Charity is a non-commercial organization, and thus, cannot afford to spend much money on business trips.
Conclusion
In this paper, the author discussed the current situation in Global Children’s Charity and proposed several ways to face the arising challenges. The organization seeks to save a part of its budget by changing the benefit plan and implementing cost containment strategies. It appears that the company should use a traditional benefits plan, which also has some extra options that employees may choose themselves. The adoption of this plan can be considered as one of the cost containment strategies. Other ways of reducing costs are promoting a healthy lifestyle, recruiting young people, using volunteers, and saving on business trips. Finally, the top management of the company should carefully introduce every change in the organization to its employees.
Works Cited
“Flex Benefit Plans.” ENCOMPASS.
“Flexible Benefit Plans.” Inc.
“6 Great Cost Containment Strategies to Eliminate Business Debt Fast.” Business First Family.