In past years, all companies needed in order to offer a competitive benefits package was to offer the essentials: primarily medical care. Providing vision and dental was often viewed as a bonus for employees.
In recent years, however, the focus has changed. More and more companies are choosing to offer voluntary benefits to their employees, not only to increase employee satisfaction but to improve their ability to attract top talent. Even though the job market has fluctuated recently, the importance of voluntary benefits has only grown. These include anything from personal financial planning and education benefits to increased training opportunities. Voluntary benefits increase employee morale, the value of the company's brand, and retention rates, making them one of the most important things you can do to help your company attract the employees it needs.
Morale
High morale is critical to employers' success. Employees with low morale are disengaged and disinterested. They aren't going to give their best to their companies, and, as a result, those companies will not perform as well as they could. Employee morale influences their daily decisions, including the way they interact with coworkers and customers.
With low morale, employees aren't going to give customers the best service. They'll be less likely to go the extra mile for customers and might do the bare minimum to get by.
On the other hand, employees with high morale are happy to come into work every day. They will go the extra mile to meet their customers' expectations and connect better with coworkers. Highly engaged teams show a 21% increase in overall productivity. Disengaged employees, on the other hand, cost US companies as much as $550 billion each year.
By offering the voluntary benefits that employees are really looking for, you’ll not only improve employee morale, you’ll experience an increase in productivity, mood, and engagement throughout your workplace.
Employer Brand
When you're trying to reach customers, you want to establish yourself as a highly competitive brand. Likewise, when you're looking for employees, you need to establish an employer brand - ideally, one that includes a reputation as a place where the top talent in the industry wants to work. Job searchers talk. Your employees share insights about company culture with their contacts that are looking for jobs. Ideally, you want to be perceived as an employer of choice.
A competitive benefits package can have a huge impact on your overall employee brand. Prospective employees want to work for an organization that prioritizes their needs. They want to know that you'll go the extra mile for them, whether that means creating a safe, healthy working environment or providing the benefits they need.
Losing the top talent in your organization can cost as much as 2.5% of the company's revenue. When you bring in high-performing talent, on the other hand, your brand will reap the benefits. On average, the top 1% of your company's talent is responsible for as much as 10% of its output, and the top 5% may be responsible for as much as 26% of what your company accomplishes. Failing to hire top talent can mean substantially reduced productivity within your company.
Retention
Benefits are key when it comes to employee retention. Employees are more likely to not only be attracted to your company, but to stick with it when you offer them the benefits they need. Ninety-one percent of millennials do not plan to stick with their current jobs for more than three years. Unfortunately, that can lead to substantial turnover for many businesses, as multiple employees choose to leave.
Turnover can have a substantial impact on your bottom line. Each time you have to replace an employee, it costs an average of 6-9 months' salary to replace them. In the meantime, you may suffer less tangible losses. Employee morale may suffer as a result of a single employee leaving--or suffer even more when multiple employees choose to pursue employment elsewhere. Customer service may decline, both during the time you need to replace an employee and as you train new hires. New employees simply don't know your company as well, nor do they know what they can offer. As a result, they may struggle more to provide the high quality of service you expect out of your organization.
If your organization struggles with retention, check your benefits package. Are you offering the same benefits your competitors provide? Have you put together a competitive benefits package? Does it include voluntary benefits that employees really want when they connect with a new organization? Going the extra mile can make a huge difference in your ability to attract top talent to your team and retain them.
It can be hard to tell immediately whether your voluntary benefits package is competitive when compared to other companies' voluntary benefits. By conducting a full evaluation of what you can offer current and prospective employees, however, you can get a better idea of what you need to offer and help your business stand out from the pack. To learn more ways that employee benefits affect retention and how to improve your benefits package, download, "How Employee Benefits Play a Key Role in Employee Retention."
