An offering of benefits to employees or prospective employees is intended as an enticement to attract and retain the ‘better’ employee. Years ago, larger companies offered attractive benefits packages (including health insurance) as a means to attract talented prospective employees at a reasonable cost to the company. Over time, employees have grown to expect lucrative benefits as a natural part of employment. Often, the employee benefit package is as important to prospective employees as the work itself. Due to escalating employer benefit package costs, a re-evaluation of the benefits you offer is needed. Can you maintain the ability to attract and retain talented and skilled workers while reducing costs?
The purpose of employee benefits is to attract and retain great talent in a competitive labor market. During the recession, the labor market is flush with talented prospective employees. Now is a great time to re-evaluate your benefit package, lower costs, and attract above average employees at the same time.
It is expensive to replace an employee (over $21,000 on average) and to attract employees. So, there is clear financial justification to examine the reasons why employees stay or leave. Below are survey data for consideration:.jpg)
The top five reasons employees stay in a job:
1) Relationships with co-workers
2) Relationship with manager
3) Desirable working hours
4) Attractive compensation
5) Attractive benefits
The top five reasons employees leave:
1) Inadequate compensation
2) Lack of career advancement
3) Insufficient recognition
4) Boredom
5) Inadequate professional development opportunity
The top employee benefits to entice employees to stay:
1) Professional development
2) Ability to work from home
3) Additional week of vacation
4) Flexible work schedule
Given the data above there are opportunities to manage performance and reduce paid benefit costs.
Clearly compensation and paid benefits play an important role in hiring and retaining employees; however, there are opportunities to reduce the costs of benefits and maintain the perception of a ‘great place to work’. A reduction in paid benefits (e.g. healthcare) may be necessary to remain profitable, but there will be a negative response associated with benefit reduction. The negative response can be mitigated with open communication and an offering of other benefits. For example, offering comp time, at-home work time, and monetary bonuses as a means to recognize superior performance can off-set the negatives associated with paid benefit reduction.
Comments
I just found your articles by chance, and have enjoyed reading them. As I read through the top five reasons employees leave a company, I can mentally check off times I've left a job for those exact reasons. Companies can do themselves a great service by simply keeping their employees happy.
Hi Lee,
I am the Denver Worklife Balance Examiner and found your article to complement my own very well. I may quote you in my future columns. I'll have to see if you have published more because the information provided is of great interest to me. My only question for you is, "What is the source for your survey results?"
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