By Tariq Hilaly, CEO of Lumity

Job seekers aren’t the only ones struggling with the job market. Businesses have to work harder than ever to acquire and retain the top-tier talent they want in their ranks—and with health benefits becoming more important to potential employees, businesses need to step up their health plan offerings to be competitive. Doing this is the hard part.

The health insurance system is famously opaque and there are several factors at play when choosing plans and packages. What’s covered? What are the costs? What challenges could arise? These can be daunting questions but with the right approach they can be answered—potentially saving money in the process. Better benefits are crucial in recruiting top talent; below are tips on making smarter benefit decisions.

Before you begin

There are many things to consider in the search for better benefits. For starters, small employers need to understand where they fit in the health insurance market. The Affordable Care Act (ACA) has changed what it means to be a small business with its Applicable Large Employer (ALE) definition.

Being an ALE comes with several new requirements, such as offering insurance to at least 95% of your workforce and keeping employee premiums below 9.5% of their wages. Failure to comply will result in financial penalties so understanding and complying with the regulations is crucial.

After getting a lay of the land, employers should turn their attention to their workforce. Because employees can be a valuable source for referrals, employers should understand the benefits that are valuable to them, which could be a good indicator of what matters to prospective talent.

Smaller businesses have a unique opportunity to directly collaborate with their employees about this. Employers should ask for feedback on the benefits they currently offer, and ask about the health care services they want, need, and have used in the past. With this information, you can start picking benefits plans that align with the interests of all parties involved.

Which solution is best?

Once you know what you need, navigating the health insurance market and all of its players still requires some guidance. Larger companies can afford to hire dedicated staff or outside consultants to manage their health benefits. Small and medium-sized businesses on the other hand likely can’t do the same.

Traditionally, employers have avoided deviating too much from their initial plans, to avoid the overwhelming task of sifting through the numerous providers and plans; an overwhelming task to say the least. As a result, their health plan ages into irrelevance.

Thanks to technological innovation, it’s easier and less expensive for employers to pick plans that suit their needs. Businesses can use visibility on financial and employee data to gain useful insights to navigate the marketplace and get recommended plans that provide value and stay faithful to the bottom line.

HR professionals are effectively relieved of the responsibility of examining thousands of health plans and can prioritize the cultivating of human resources. Data-driven solutions are also considerably inexpensive when compared to the bloated brokers and consultants that corporations employ.

How better benefits equal better talent

Talented job seekers aren’t just swayed by a large salary anymore. A 2015 Jobvite survey found that 36% of them view health benefits as having the biggest impact on the jobs they choose. With families and their own well-being to consider, valuable health insurance is a major priority for potential employees. Therefore, once you’ve chosen a better benefits plan, the next step is to show it off to prospective hires.

Don’t wait until they are on board to share how compelling your plan is and don’t hesitate to discuss how much employees love your plan early in the process. Communicating the strengths of your health benefits can persuade prospective hires of the coverage they didn’t know they needed and that will stand out to them in comparison to other companies.

Health benefits may not be the first thought that comes to mind when recruiting for new talent, yet there are several advantages to making it a priority. Not only will strategic benefits decisions help save money in wasted coverage and government penalties, they will also keep employees happy, leading to a more successful workplace and valuable referrals.

Benefits decisions may seem like an impossible task to take on, but with data driving your choices, it can be much easier and beneficial for your business in the long run.