Final answer:
Allowing employees to choose their benefits via a flexible package enhances employer return on investment by tailoring compensation to employee preferences. This increases satisfaction and efficient use of benefits funds, while sustaining essential programs like Social Security and Medicare.
Step-by-step explanation:
The most effective strategy to improve employer return on investment in employee benefits would be allowing employees to choose the benefits they receive by introducing a flexible benefits package. This method encourages employee insurance engagement and can increase the perceived value of the benefits program, which can lead to better employee satisfaction and retention. It aligns total compensation per hour more closely with employee preferences, potentially leading to more economical use of benefit funds.
It is important for employers to also consider retirement plans, employer payments to Social Security, unemployment and worker's compensation insurance, as well as other benefits such as Medicare when designing their employee benefits packages.
By tailoring the benefits package to meet the various needs of employees, employers invest in a workforce that feels valued and understood, which can reduce turnover and associated costs. Moreover, the strategic design of employee benefits, such as the adoption of a pay-as-you-go systems, can ensure the sustainability of retirement packages and health care benefits for the elderly, like Social Security and Medicare, especially when reforms or adjustments in contributions occur.