Benefits are important, so important that your benefits package could make all the difference for employee retention. With the current labor shortage, companies can’t afford to lose their employees to the competition simply because their benefits packages fall short. Developing and promoting a comprehensive benefits package can help retain your current workforce and attract new hires to your company.
According to a study by Aflac, employees look closely at benefits when deciding which opportunities to pursue and which jobs to walk away from.
- 29% of employees have left or turned down a job due to the benefits offered.
- 57% said they are at least somewhat likely to accept slightly lower compensation for a more robust benefits package.
- 61% ranked health benefits as one of the top three factors when looking for a new job.
Turnover is a Huge Issue
Prior to the pandemic, many employees were taking advantage of the tight labor market to trade up to different jobs, often with more money and better benefits. Turnover reached a new high last November as 4.5 million workers quit their jobs. The resignations could be chalked up to a rise in COVID-19 cases due to the omicron variant or the fact that employees are leveraging the tight job market to find better opportunities.
According to Achievers Workforce Institute, the top reason people search for a new job is better compensation and benefits. And 25% of employees are also looking for better work-life balance in their next job.
Why You Should Care About Turnover
Replacing lost talent is expensive and the cost can vary greatly by the industry and type of employee. Consider how much you’ve invested in training your employees and paying for various certifications. But companies also lose productivity and institutional knowledge when people leave.
While estimates around the impact of turnover vary widely, Gallup believes it costs an employer between one-half and two times the lost employee’s salary or wages when someone leaves. In 2019, this added up to about a $1 trillion dollar hit to US companies. And that was when turnover was around 26%, before the pandemic.
These are dollars that could be better spent elsewhere.
Use Benefits to Keep and Attract Employees
While it’s not possible for a company to retain all its employees every year, there are techniques that may minimize the departures. Since many employees who are considering looking for another job are leaving for better benefits and pay, focusing on those programs makes sense.
For benefits, having a robust, competitive program is key. According to Prudential, 72% of employees agree that a strong benefits package (including life and disability insurance, along with other non-health benefits) is a big part of why they stay at their job. Competitive contribution amounts and out-of-pocket costs will help retain employees as well as attract candidates.
Balance Benefits Quality with ROI
Here are some places to cost-effectively enhance a benefits program without breaking the bank.
- Strengthen the basics. Most employers provide a base amount of life insurance and some level of disability coverage. These might not be big-ticket items but employees and prospective will notice if they have to pay for them out-of-pocket.
- Add an employer HSA match. If your company has an eligible high-deductible plan, adding some employer dollars can help entice employees to enroll.
- Consider pre-funding the employer HSA amount. This can seem risky especially considering the possibility of large-scale turnover, but employees may be more likely to choose the high-deductible plan if they have a safety net for out-of-pocket costs.
- Bulk up with voluntary options. Coverages like pet insurance, critical illness coverage and hospital indemnity don’t cost the employer anything and they round out a program with options people want and need.
- Pitch in for family coverage. Most employees (94%) with family coverage contribute to the cost, with employers paying 67% of the total. If your employees pay full-freight for their dependents’ coverage or your company contributes significantly less than that 67%, you may be losing current and prospective talent.
Once you choose which benefits will best meet your employees’ needs, Arcoro’s Benefits Management software can help you communicate them to your entire staff. Companies can utilize HR benefit software to share podcasts, web-based videos and online chat rooms with employees. It also allows HR and managers to send uncluttered communications, so every employee instantly receives every single bit of communication.
Arcoro’s self-service portal also allows employees to access and compare plans, make selections and review current benefits all in one central platform 24/7 via desktop or on a mobile device. A centralized system not only provides transparency but allows the managers to ensure that all employees have access to their personal information.