Advanced-HR - 2014 Total Benefits Benchmarking Study Total Benefits... · 2020. 9. 1. · This...
Transcript of Advanced-HR - 2014 Total Benefits Benchmarking Study Total Benefits... · 2020. 9. 1. · This...
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2014 Total Benefits Benchmarking Study August 2014 Sequoia Benefits & Insurance Services, LLC
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Copyright © 2014 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved.
Contents
» Executive Summary p.2
» Benefits Snapshot p.4
» Medical p.9
» Dental p.21
» Vision p.26
» Basic Life & Disability p.29
» Retirement p.36
» Commuter p.40
» Perks & Company Culture p.42
» Wellbeing p.47
» Global Benefits p.49
» Time Off p.51
» HR Systems p.54
» Industry Trends p.58
Survey Methodology
This online survey was fielded between June and July 2014. The majority of the 224 participating companies are headquartered in the Bay Area.
80% of participants are Private, VC Backed
70% of companies are in the tech industry
The average age at participant companies is 26-35
50 or less 35%
50-199 41%
200-399 12%
400+ 12%
Size of Participant Companies
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Executive Summary Background This year, the Sequoia Total Benefit Benchmarking survey
provides new valuable insights around year-over-year changes in specific benefits categories. New categories were added based on topics frequently discussed with clients – including time off policies, perks and HR systems. Responses in certain categories were broken out by company size ranges to show potential differences in offerings as companies grow.
The pressure is high for HR teams to deliver for
their company. “Making our employees feel protected, reducing their out of pocket expenses and increasing their understanding and ease of access to information about their benefits is table stakes for any HR team. But competing for talent in this market requires serious creativity,” said one HR VP at a high tech company, “you really have to go above and beyond. Benefits spend is now our fourth largest company expense so I’m more involved than ever with the Finance team, budgets and forecasting.”
The Sequoia Spotlight insights were added by Sequoia’s leadership team collectively representing more than 75+ years of benefits consulting experience.
The 2014 Total Benefits Benchmarking Study sheds light on the benefits investment categories and trends of tech companies in the Bay Area and Silicon Valley. It will help you make data-driven decisions for shaping your plans for this unique industry and region.
As evidenced by responses to the question about what is keeping HR professionals up at night, there is increasing concern about delivering a total benefits strategy that attracts and retains top talent.
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Executive Summary Key Findings
Benefits spend: More companies are spending over $10,000 per employee per year on
employee benefits.
Eligibility & enrollment: Significantly more employers are offering benefits eligibility “on
date of hire” and enrollment in company benefits is over 80%.
Medical: Employer contributions for employee only benefits were relatively uniform
regardless of company size, trending towards 90%. Dependent contributions were less
consistent, but trending towards 70% for employee + family.
Dental: Benefits are getting richer with more companies offering higher annual maximums
and lower deductibles.
Retirement: 401(k)s are the predominant retirement plan option, most other program types
have diminished.
Commuter: Benefits have increased, not only to round out competitive employee offerings,
but now because of the mandate in Bay Area counties.
Time off: There is a definite trend towards offering “unlimited PTO.”
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Benefits Snapshot
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Benefits Snapshot
26%
38%
51%
52%
23%
31%
Long Term Disability
Short Term Disability
Yes, w/ tax choice Yes, w/o tax choice No
97%
94%
93%
88%
60%
45%
15%
3%
6%
7%
12%
40%
55%
85%
Dental Benefits
Commuter Benefits
Vision Benefits
Retirement Benefits
Voluntary Life Insurance
HSA or HRA
Infertility Benefits
Companies Offering the Following Benefits in Addition to Medical
Yes No
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Benefits Spending
16%
7%
11%
9%
5%
23%
29%
Under $6,000
$6,000-$6,999
$7,000-$7,999
$8,000-$8,999
$9,000-$9,999
Over $10,000
Unsure
Average Benefit Spend per Employee
19%
76%
5%
20%
75%
5%
Yes
No
Unsure
Benefit Opt Out Waiver Credits Offered
2013 2014
Sequoia Spotlight •Many companies are spending over $10,000 per employee per year on their total benefits package. •Offering waiver credits for employees who opt out of benefits coverage is not very common and this trend remains consistent with 2013 results.
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Benefits Eligibility & Enrollment Rate
42% 50%
5% 2% 2%
Date of hire First of the month following date of hire
First of the month following 30 days
First of the month following 60 days
First of the month following 90 days
Benefits Eligibility Dates
Sequoia Spotlight •Compared to responses in 2013, significantly more companies are offering benefits on the date of hire, 42% in 2014 compared to 22% in 2013. •Companies are seeing more than 80% of their employees enrolling in medical benefits.
3% 4% 12%
24%
57%
Under 50% 51-65% 66-80% 81-90% Over 90%
Employee Enrollment Rate
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Benefits Funding & Contribution Strategy
Sequoia Spotlight •The majority of companies participating in the survey are fully insured (87%). •Of the companies who are fully insured, 53% are not considering moving to a self-insured arrangement. •80% of companies use a percentage based contribution strategy (instead of flat dollar amount).
Fully Insured
87%
Self Funded
13%
Current Medical Funding Type
53%
10% 9% 28%
Not Likely Somewhat Likely
Very Likely Not Sure
Considering Moving to Self-Insured Funding
20% 24%
56%
Flat Dollar Amount % of Premium of Base Plan % of Premium on Any Plan
Contribution Strategy
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Medical
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Medical – PPO Premiums & Contributions
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Medical – PPO Deductibles Sequoia Spotlight •The majority of companies have a $250 deductible for single employees and $1,000 deductible for families. With the introduction of ACA plans with no deductible for smaller companies, there was a dramatic increase in under 50 companies with family deductibles of $500 or less.
11%
9%
10%
14%
39%
52%
60%
64%
0%
3%
0%
0%
29%
20%
20%
14%
8%
0%
0%
0%
5%
0%
0%
0%
8%
17%
10%
7%
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Medical – PPO Maximums
Sequoia Spotlight •The majority of companies have a $2,000-$2,499 OOP max for single employees and $4,000-$4,999 OOP max for families.
0%
4%
0%
7%
35%
57%
70%
71%
34%
36%
30%
21%
16%
1%
0%
0%
16%
1%
0%
0%
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Medical – PPO Coinsurance & Copays
Sequoia Spotlight •The majority of companies with more than 50 employees have 90% coinsurance and a $20 doctor visit copay.
3%
13%
10%
21%
24%
19%
20%
14%
45%
60%
70%
64%
11%
4%
0%
0%
18%
3%
0%
0%
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Medical – HMO Premiums & Contributions
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Medical – HMO
Sequoia Spotlight •Majority of companies have a $2,000-$2,999 OOP max for single employees and $4,000-$5,999 OOP max for families.
0%
2%
0%
0%
36%
39%
38%
36%
55%
59%
50%
64%
0%
0%
13%
0%
9%
0%
0%
0%
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Medical – HMO/Kaiser
50% 3%
Kaiser Enrollment Rate
Not asked in 2013
Sequoia Spotlight •The majority of HMO plans have a $15 doctor visit copay. •Kaiser is offered at about half of Bay Area companies that participated in the survey, 40% of these companies have at least a 25% enrollment rate in the Kaiser option.
0%
0%
0%
0%
36%
38%
38%
36%
18%
45%
38%
50%
9%
14%
13%
14%
27%
2%
0%
0%
9% 2%
13%
0%
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Medical – HDHP Premiums & Contributions
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Medical – HDHP Sequoia Spotlight •The majority of companies have a $3,000-$3,999 employee OOP max and $6,000-$7,999 family OOP max. •Coinsurance on HDHP plans is 100% for companies with more than 200 employees.
7%
3%
0%
0%
53%
95%
100%
100%
13%
0%
0%
0%
27%
3%
0%
0%
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Medical – HDHP Sequoia Spotlight •The majority of companies have a $2,500-$2,999 employee deductible and $5,000-$5,999 family deductible. •Employer contributions to HSAs cover close to half of the deductibles.
Average Annual Company Contribution to HSA Account
Employee Only $1,331
Employee + Family $2,070
20%
13%
0%
0%
0%
5%
0%
0%
67%
79%
100%
100%
0%
3%
0%
0%
13%
0%
0%
0%
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Prescription Coverage Sequoia Spotlight •The majority of companies with over 50 employees offer a $10 generic copay, $25 preferred brand copay and $40 non-preferred brand copay.
0%
0%
0%
0%
87%
96%
91%
93%
5%
3%
9%
0%
8%
1%
0%
7%
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Dental
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Dental Sequoia Spotlight •Most companies have a $50 deductible for employees and $150 family deductible. There was a slight increase in companies offering dental without a deductible compared to 2013.
24%
7%
0%
5%
0%
3%
0%
0%
71%
84%
94%
95%
2%
3%
0%
0%
4%
3%
6%
0%
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Dental Sequoia Spotlight •The majority of companies offer a $1,500 annual maximum, however companies with more than 400 employees offer $2,000+. •Across all company sizes, there was an increase over 2013 maximums, with more companies offering $2,000+ or no maximum.
11%
11%
0%
0%
2%
50%
0%
0%
68%
8%
44%
38%
16%
15%
31%
13%
2%
16%
25%
44%
2%
1%
0%
6%
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Dental
Sequoia Spotlight •The majority of companies offer 100% coinsurance for preventive services, 90% for basic and 60% for major in-network.
100%
97%
100% 100%
0%
3%
0% 0%
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Dental / Orthodontia
Sequoia Spotlight •The majority of companies with more than 400 employees offer orthodontia benefits for both adult and children. •Companies with fewer employees are less likely to offer ortho coverage or offer to children only. •The lifetime ortho max average for companies with more than 200 employees is over $1,500.
30%
41%
17%
75%
13%
30%
83%
25%
57%
30%
0%
0%
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Vision
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Vision Sequoia Spotlight •The majority of companies with more than 400 employees offer a $25 copay for vision materials and $10 copay for vision exams. •Companies with less than 200 employees offer a less than $25 copay for materials and $10 copay for exams.
4%
2%
0%
5%
45%
74%
63%
81%
2%
2%
6%
0%
49%
22%
31%
14%
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Vision Sequoia Spotlight •The majority of companies offer eye exam and lens coverage every 12 months with frame coverage every 24 months.
100% 99% 100% 100%
0% 1% 0% 0%
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Life & Disability
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Basic Life Insurance
Sequoia Spotlight •The majority of companies offer basic life insurance as a multiple of salary. •If offering a Flat Amount, $50k is most common (to reduce imputed income tax administration).
36%
20%
14%
13%
35%
63%
86%
87%
29%
17%
0%
0%
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Basic Life Insurance
Sequoia Spotlight •The majority of companies have a life Insurance benefit as a multiple of salary, most commonly 1x for companies under 200 and 2x for companies with more than 200 employees. •Income calculations typically include base salary, but companies with large incentive paid sales teams typically include commission. •The most common maximum benefit is $250k but companies with more than 400 employees trend higher to $500k.
0%
6%
8%
19%
92%
Overtime
Cash profit sharing
Bonus
Commission
Base salary
Income Calculation Includes
61%
61%
38%
26%
0%
1%
0%
0%
35%
35%
63%
74%
4%
3%
0%
0%
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Short Term Disability
Sequoia Spotlight •The majority of companies cover 60% of salary with a weekly benefit of $2,500 for 12 weeks. •More than half of companies supplement disability or offer salary continuation.
0% 5% 11% 0%
95% 86% 83% 100%
5% 8% 6% 0%
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Long Term Disability
Sequoia Spotlight •The majority of companies cover 60% of salary with a maximum monthly benefit of $10,000.
0% 5% 7% 5%
92% 86%
67%
89%
8% 9%
20%
5% 0% 0%
7% 0%
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Retirement
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Retirement Benefits
Sequoia Spotlight •401(k) retirement plans are the predominant option offered, followed by employee stock option purchase programs. Pensions and SEP/SIMPLE IRA plans have diminished to nearly 0%. •There are many options for record keepers, indicated by the high “other” ranking, however ADP and Fidelity lead the results.
Other includes: American Funds, theonline401k.com, John
Hancock, Lincoln, TIAA/CREF and T.Rowe Price
Other includes: Equity Grants 43%
1%
2%
3%
3%
4%
6%
6%
15%
16%
Other
ING
Mass Mutual
Ascensus
Paychex 401(k)
Vanguard
Principal
Transamerica
Fidelity
ADP 401(k)
Retirement Plan Record Keepers
90%
11%
5%
2%
1%
2%
401(k)
ESOP
403(b)
SEP/SIMPLE IRA
Pension
Other
Employer Sponsored Retirement Plan Options
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Retirement Benefits
Sequoia Spotlight •The majority of companies have more than 50% participation in their retirement plan, with 80%+ participation on the rise compared to 2013 results. •There was an increase in automatic enrollment of 3-4% of salary compared to 2013.
34%
13% 6% 9% 9%
12% 17%
29%
7%
22%
5% 14%
7% 16%
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Retirement Plan Provisions
Sequoia Spotlight •The majority of retirement plans allow Roth contributions and loans.
Yes 78%
No 22%
Roth Contributions Allowed
Yes 84%
No 16%
Loans Allowed
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Commuter Benefits
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Commuter Programs
Sequoia Spotlight •The majority of companies are offering a pre-tax commuter benefit followed by parking direct reimbursement.
Other responses included: commuter checks, CalTrain GoPasses, bicycle commuter program $75 Uber credit
82%
32%
7%
5%
3%
Section 125 Commuter Program (pre-tax)
Parking reimbursement
Shuttle/bus/zipcar
Taxi/shared ride
Onsite car share
Commuter Benefit Options
39
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Perks & Company Culture
40
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Food
“Other” responses include: Snacks & Beverages, Delivered Meals (ie Seamless) & Vending Machines
2%
3%
5%
20%
30%
40%
Cafeteria
Onsite Chef
Meal allowance
Other
Onsite Catering
Stocked kitchen
Meal Options
21%
43%
14%
46%
Breakfast
Lunch
Dinner
Snacks
Meals Provided
56%
13%
21%
10%
22%
21%
36%
21%
Daily
Weekly
On occasion
Not offered
Meal Frequency
2014 2013
Sequoia Spotlight •Most companies are providing lunch and snacks through a stocked kitchen or onsite catering. Overall meal frequency is on the rise. In 2014, 56% of companies provided daily meals compared to 22% in 2013.
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Volunteering
Sequoia Spotlight •While companies are interested in giving back and establishing formal volunteer programs, the majority are volunteering on an ad hoc basis. Some companies are crediting employees with paid time off to volunteer as well as matching donations or volunteer hours.
1%
9%
14%
21%
78%
Match hours with donation
Company will match donations
Volunteer/Charity work is credited as paid time off
Other
No program
Companies with Volunteer Programs
Other includes: Company planned volunteer events, 4-16 hours time off to volunteer, paycheck deduction donations
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Learning & Personal Services
Sequoia Spotlight •The majority of companies provide tuition assistance and online learning resources for employee development and investment in continuing education. •Legal assistance is the most commonly offered company sponsored service, followed by relocation.
Other includes: Conference allowance, in-house training
57%
37%
26%
25%
13%
Tuition assistance
Online learning resources
Book/resource rental
Lecture series
None at this time
Continuing Education
Other includes: EAP, house cleaning, onsite car maintenance, AnyPerk, dog adoption reimbursement and de-stress sessions.
36%
35%
22%
18%
7%
4%
3%
Legal assistance
Relocation services
None of these
Laundry/Dry cleaning
Haircuts
Adoption assistance
Onsite Counseling
Personal Services
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Culture
Sequoia Spotlight •Casual dress, logo-wear, games and activities are being offered in more than half of participating companies. These differentiators are becoming more common to attract and retain top talent. •Only 17% of companies have 25% or more of their employees frequently working from home/telecommuting.
Other comments included: Happy hours, beer in office, book club, ski days, mountain bike days and team outings
97%
61%
60%
37%
27%
7%
Casual days
Branded Clothing during on boarding
Office games
Hackathons
Office Pets
Company Store
Extra Perks
0-25% 83%
25-50% 11%
50% or more
6%
Percentage of employees who frequently work from home/telecommute
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Wellbeing
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Wellbeing Programs
Sequoia Spotlight •60% of companies spend less than $500 per employee per year on their wellness program offerings. •40% of companies surveyed offer at least one wellness program listed below:
12%
6%
6%
7%
23%
10%
12%
8%
4%
11%
0% 5% 10% 15% 20% 25%
On-site gym / workout facility
On-site exercise classes
Wellness challenges
Hand out activity trackers e.g., Fitbit, pedometers
Wellness / fitness subsidy or discount program
On-site massage
Ergonomic evaluations
On-site or online wellness seminars
Lifestyle management programs e.g., smoking cessation
On-site biometric screening
50% of those that ran a challenge handed out activity tracking devices to their employees
50% of respondents offer a receipt based reimbursement program
Most lifestyle management programs are offered for free through all medical plans
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Global Benefits
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Global Benefits - Travelers
Sequoia Spotlight •The majority of companies with global benefit needs offer accident insurance for employees that travel internationally for business.
13%
22%
51%
8%
6%
Not offered
Medical benefits (separate from domestic policy)
Business travel accident insurance
Repatriation insurance
N/A
Companies offering additional benefits for employees that travel internationally for business
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Global Benefits - Expatriates
Sequoia Spotlight •The majority of companies with global benefit needs are not offering expatriate benefits, but those who do, provide medical, dental, vision but fewer provide retirement benefits.
100%
80%
80%
57%
57%
57%
57%
53%
50%
43%
37%
33%
Medical
Dental
Vision
Accident
Death
Disability
Dependent medical
Housing
Emergency assistance/evacuation
Critical illness/short-term disability
Maternity
Retirement
Benefits Provided to Expatriates
Yes 32%
No 38%
No Expats
30%
Companies Offering Expatriate Benefits
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Global Benefits – Inpatriates & Local Nationals
Sequoia Spotlight •The majority of companies with global benefit needs are not offering inpatriate medical coverage. •For local nationals, the majority are offering locally competitive/compliant benefit programs.
58%
45%
33%
20% 15%
Defined Benefit program -locally
competitive
Minimal - Locally Compliant Program
Defined Benefit program -
benchmarked to domestic US plan
Stipend or Subsidy - no defined
program
Health & Wellness program
Local National Benefits Inpatriate Medical Coverage
Yes 21%
No 43%
Not sure 36%
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Time Off
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Time Off
“Other” responses included: 5 weeks and 12 weeks, 1 week and paid sabbatical had 0 responses
14%
26%
6%
30%
17%
7%
28%
6%
18%
34%
2 Weeks
3 Weeks
4 Weeks
Based on tenure
Unlimited
Paid Time Off
2014 2013
26%
8%
17%
10%
9%
30%
15%
4%
21%
9%
9%
44%
No
< 5 days
5-6 days
7-9 days
10+ days
Unlimited
Separate Sick Days Offered
2014 2013
“No” responses means that sick time is part of PTO
Sequoia Spotlight •The majority of companies are offering unlimited PTO (including sick time). This trend was a significant increase over 2013 responses.
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Time Off
4%
6%
2%
8%
10%
23%
47%
11%
15%
3%
7%
7%
6%
51%
1 week
2 weeks
3 weeks
4 weeks
6 weeks
> 6 weeks
None
Fully paid time off for Maternity/Paternity Leave
Paternity Maternity
2%
17%
50%
32%
< 5 holidays
6-8 holidays
9-10 holidays
11+
Paid Holidays
Sequoia Spotlight •The majority of companies are offering 9-10 paid holidays. •Paid time off for maternity and paternity leave is still in the minority, but those who are offering this benefit, the trend is to offer 6 weeks paid for maternity and 2 weeks paid for paternity.
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HR Systems
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HR Systems
Sequoia Spotlight •More than half of survey participants are using online systems for Benefits Administration, Employee Self-Service (personal information records) and Time & Attendance.
76%
61%
60%
51%
40%
40%
3%
Benefits Administration
Employee/Manager Self-Service
Time & Attendance
Recruiting/Talent Acquisition
New hire training and ongoing education
Performance Management
No system
Components of your current Human Capital Management System(s)
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HR Systems cont.
Other: Algentis, Intuit, NetSuite Other: Cornerstone, Halogen, Paylocity, PulseHR Other: Algentis, Paychex, Kronos, HR Cloud
Sequoia Spotlight •There are many HR system vendors to choose from, indicated by the high response to “Other” across all system types. However, a few trends emerge: ADP is the predominant HRIS and Payroll system in use, followed by Bamboo for HRIS and Paychex for Payroll. The majority of companies are not using online systems for performance management yet. For those using a system, Small Improvements had the most responses.
62%
15%
11%
6%
3%
3%
31%
1%
ADP
Paychex
TriNet
Paylocity
Workday
ZenPayroll
Other
No system
Payroll Systems
42%
23%
15%
6%
6%
4%
43%
7%
ADP
Bamboo
TriNet
Workday
Paylocity Advanced HR
BENU SyncHR
Other
No system
HRIS Systems
13%
8%
6%
29%
45%
Small Improvements
Workday
SuccessFactors
Other
No system
Performance Management Systems
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HR Systems
Partly integrated
36%
Fully integrated
21%
Not integrated
43%
HR System Integration
Sequoia Spotlight •20% of companies are using fully integrated HR systems that don’t require manual upload/download. •For companies pursuing new systems implementation, the timeframes have shortened since 2013, with 60% or more taking less than 8 weeks to get set up.
35%
33%
11%
4%
17%
34%
25%
13% 8%
20%
< 4 weeks 4-8 weeks 9-12 weeks 13-16 weeks More than 12 weeks
System Implementation Timelines
2014 2013
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Industry Trends
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Trends Due to Changes in Health Care Reform Sequoia Spotlight •Given the impacts of health care reform, the primary reasons cited for keeping coverage is to attract and retain employees.
10%
14%
83%
87%
89%
Maintain tax benefits
Avoid paying penalties
Retain current employees
Maintain employee productivity and satisfaction
Recruit talented new employees
Reasons for Keeping Coverage
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Trends in Benefits – How Employers are Feeling
What keeps you up at night as it relates to driving a successful benefits program? 1. Keeping up with competitors to
attract and retain talent
2. Engaging your employees
3. Lowering costs
4. Keeping up with market changes
5. Measuring impact through data analysis
Yes 78%
No 12%
Not sure 10%
Employee Satisfaction with Overall Benefit Offering
Top
of
min
d
Least
Most
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Benefits Wellbeing Risk Management
Global Benefits Compliance 401(k)
About Sequoia Founded in 2001, Sequoia Benefits provides benefits consulting and HR outsourcing solutions for innovative companies in the Bay Area. We make life easier for HR and finance teams, solve employees’ benefits questions & come through for our clients, no matter what.
Thank you!
If you have any questions or would like to participate in future benchmarking surveys, please email: [email protected]
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