It wasn’t that many years ago when all employees really expected from their employer was a paycheck. Any additional benefits were just that…benefits. Even essentials like health insurance were considered extra perks, not necessities.
Today benefits run the gamut from traditional staples like life insurance and dental coverage all the way to trendier offerings like gym memberships and pet insurance. It’s safe to say the world of employee benefits has come a long way. But there’s still room for improvement.
Most executives and business owners agree that, despite the often high cost associated with offering an attractive benefits package, companies that invest in their employees see many positive effects. When they offer health insurance, flexible hours, and paid time off, they see an improvement in morale, productivity, and–yes–even their bottom line.
As a result, many business owners are continuing to add even more benefit options to their employees, particularly ones that are meaningful but not necessarily as expensive as, say, the various forms of health and life insurance. Here’s why many people think this is so important.
1. It’s profitable.
At the end of the day a business owner’s goal is to make money. Sure, satisfied employees are a great thing to have. But do they really help improve the bottom line? A recent study by The Aberdeen Group suggests that they do. Their research revealed that companies with the highest employee engagement bring in more annual revenue, receive more customer referrals, and meet more sales quotas than those with less engaged workers.
2. It improves employees’ mental and physical health.
The positive effects of having happy and healthy employees can not be stated enough. When workers are encouraged to exercise, whether through a formal wellness program or just with the help of flexible hours that allow for a lunchtime stroll, their energy levels and overall mood show improvement. Healthy employees are more likely to show up for work, and those with insurance are more likely to get regular check-ups and stay on top of their health.
Not to mention, having solid benefits give employees peace of mind. They don’t waste time at work worrying about how they’re going to cover their out-of-pocket costs for a family member’s illness or injury.
3. It’s more expensive to recruit than to retain.
It’s true that a good benefits package is essential to attracting top talent. But the flip side is that benefits are also crucial to retaining good workers. Many companies quit thinking about benefits once they get an employees in the door, offering the occasional small raise to try to keep them happy. However, another recent study revealed that 79 percent of employees said they’d rather have more or better benefits than a raise.
It’s true that it might cost more to introduce a new benefit than to offer a small raise here and there. But it won’t cost more than what it takes to replace an employee who leaves for another position with better benefits. In fact, it’s estimated that it can cost 30 to 50 percent of an entry-level worker’s salary to replace him or her. For mid-level employees, that expense jumps to 150+ percent. Bottom line? It’s cheaper to keep the ones you have happy.
4. It improves corporate culture.
Many of the new benefits emerging today are focused on enhancing the corporate culture and fostering a sense of camaraderie among employees. Initiatives like wellness programs have been proven to improve not only relationships between workers and their supervisors, but also among their coworkers. Try sponsoring a group outing or team building event to give your employees a chance to have a little fun…together!
When employees are friends outside of work it creates cohesion and makes employees less likely to leave. While this may not have a direct impact on business, it does affect the work atmosphere and provides many secondary benefits in the way of improved morale, better teamwork, and ultimately decreased spending on recruiting.
5. It’s simply good business.
The bottom line is that it just makes sense to put your dollars towards what employees actually want, instead of trying to reward them with perks they don’t even care about. Research shows that employees are looking for solid benefits that meet their basic needs, along with a few others that help to improve their health and morale. If you’re skimping on benefits, but spending lavishly on expensive company parties or unnecessary travel, you’re sending your employees the wrong message.
A solid benefits package gives employees security and shows them how much they’re valued. That goes a long way to sustain morale and ultimately protect your bottom line. If you go above and beyond for your employees then, when it comes down to it, they’ll be more than willing to do the same for you.