Do Employee Benefit Packages Have a Big Impact on Retaining Current Employees?
Competitive employee benefit packages are the cornerstone of employee retention. While employers can often offer smaller perks and incentives to increase overall employee morale, without a comprehensive benefits package, new qualified applicants won’t walk through the door – and seasoned experienced employees will look for better opportunities elsewhere.
The Cost of Losing Talent
Employees leave jobs for a host of reasons. Yet each time your company loses an employee, there are qualitative and quantitative costs incurred. This comes in the form of lost productivity, advertising for a new position, hiring and training a replacement, and customer service issues with a reduced staff. A study by the Society for Human Resource Management indicates that, on average, it costs 6-9 months of an employee’s salary to replace that employee. For example, to replace an employee making about $60,000 per year would cost a company about $30,000 to $45,000.
Happy Employees Are Retained Employees
Maintaining a positive relationship with your employees is not a matter of guesswork. Employees want to know that they are respected and appreciated. They also want a balance between their professional and personal lives. Don’t be afraid to actively engage with your employees to determine what aspects matter most to them. This will help you narrow the focus of your employee benefit packages.
Building a Comprehensive Package
When thinking about employee benefits, it’s important to consider all aspects of an employee’s well-being. Far too often, small business owners focus solely on health insurance options. That’s a vital aspect of the benefits plan certainly, but it is not the only aspect worth considering.
Besides health insurance, the 401(k) is the second most important aspect of comprehensive employee benefit packages. Employees want to know they will one day be able to enjoy a comfortable retirement. It’s so important, in fact, recent studies have shown that a well managed 401(k) program can add approximately 8% to the overall profitability to the company.
Paid Time Off
All employees need the chance to recharge their batteries. It increases overall productivity and helps elevate employee morale. It’s also an important component of a comprehensive benefits package. Traditionally, companies offered different types of time off including sick leave, vacation, and holidays. Today, more companies are incorporating a more consolidated approach toward paid leave and allowing employees to decide when and how to utilize their personal days.
Short and Long Term Disability
Accidents and illnesses happen. Although we all hope to avoid them, many of us will at one point or another need disability insurance for ourselves or our loved ones. If your employee is suddenly out of work for a serious medical condition, they will need to replace their lost income to continue to provide for their family. Short and long term disability packages allow employees to have the peace of mind that their family’s needs will continue to be met even during a medical hardship. Additionally, many of these types of plans are completely employee funded so employers incur no additional cost for the program.
Dental and Vision
Standard health insurance rarely offers any type of coverage for dental or vision. For your employees with families and small children, these types of policies can help offer a tangible savings in overall health expenses. While the costs of many of these programs are often shared between the employee and the employer, the expense is more than paid back in employee satisfaction.
Flexible Spending Accounts
Flexible spending accounts allow employees to pay for medical expenses such as deductibles and co-pays with pre-tax dollars.
Providing excellent benefits without regularly communicating the value of these benefits to your employees is a missed opportunity. People are prone to take things for granted; and, those who don’t still often miss the big picture. The solution is to communicate the value of the total package you are providing each employee, using online solutions such as COMPackage. Such a solution is easy-to-use, inexpensive, and powerful in how it clearly and simply communicates the value of each employee’s overall package.