Why do companies offer benefits at all? It’s probably been a while since you stopped and asked, “What is the purpose of employee benefits?” It wasn’t too long ago that the answer was simply, “to be competitive.”
Today, even the most common employee benefits can be part of a clearly defined business strategy aimed at making the time employees spend at work more valuable, meaningful, and productive. It’s crucial today to show your workforce that the company cares for them and is invested in their wellness, career, and financial future. Offering the right mix of employee benefits is in fact one of the key strategic considerations that businesses are making today.
7 Reasons Benefits Are Strategically Important To Employers Today
The importance of employee benefits can’t be overstated. These are the seven key reasons any business owner should care.
1. Benefits are offered by employers to attract good employees
Having a holistic, inclusive wellness strategy can be a strong hiring advantage and one of the best benefits to attract new skilled workers and keep them.
Recent research by REBA showed that 74% of businesses consider employee well-being essential and beneficial for recruiting and retaining employees. Additionally, 89% of employees who work for wellbeing-friendly businesses would highly recommend their company as an excellent place to work.
2. Top-quality benefits can increase employee retention
According to a recent report by Paycor, the average turnover rate for companies that don’t offer a benefit plan is 157%. That compares with a 138% decrease in turnover at organizations that provide a benefits plan with a mix of different programs. Reevaluating your company’s benefits package and offering the right combination of benefits that include holistic wellness solutions can be essential to reducing turnover and remaining competitive in the labor market.
3. Benefits can keep your employees happy and increase employee productivity and performance
Gartner’s research has consistently shown that employee benefits that support holistic wellbeing can boost employee efforts by 21%.
The emphasis here is on taking a strategic approach to holistic wellbeing — embracing a broader concept of employee wellbeing and offering benefits that are accessible and meaningful to everyone in the organization. For example, offering low-cost childcare, creating a flexible workplace, and prioritizing personalized and accessible physical activity can all significantly increase employee performance.
4. As always, benefits can first and foremost keep your employees healthy
A healthy employee means higher performance, lower burnout rates, and fewer sick days. According to a recent Gallup report, 15-20% of total payroll goes to voluntary turnover costs because of burnout alone. The report also found that 75% of employer medical costs are due to preventable conditions. These are all avoidable costs — with a good strategy to invest in employees’ overall health.
In the wake of COVID-19, supporting employee health is more relevant than ever. The pandemic brought with it a completely new way of working that resulted in longer working hours and a severely blurred line between work and life balance. If you invest strategically in good health care coverage and an integrated wellbeing plan, your workforce will have the necessary tools to care for themselves.
5. Benefits will improve employee morale
An SHRM survey on job satisfaction showed that 68% of workers agree that a good benefits package is crucial to improving employee satisfaction and morale.
There are different management methods that can help boost employee morale, and they all include an optimal mix of benefits. A well-rounded approach is to focus on employee benefits that support your employees to juggle both work and life obligations and challenges.
By promoting work life balance among employees and giving them the necessary tools to have a healthier lifestyle, companies can significantly improve how employees feel at work. Not having to worry about health insurance, life insurance and certain aspects of finances all help boost employee morale which then results in higher employee engagement.
6. Maintain your company’s employer reputation
Participants of the SHRM survey mentioned earlier agreed that employee benefits have a major impact on the reputation of any company, regardless of the size of the organization or industry. People looking for a job are more likely to accept a position from a company that has a well-known reputation than one that is perceived as indifferent to its employees’ well-being.
A good benefits package is a reflection of how a company values its workforce. It can help build a positive reputation for a company. An investment in benefits that go beyond the basics is a certain way for any company to reinforce its reputation as a good place to work.
7. Stay ahead of your competitors
To be able to compete for the market’s top talent, it is key to offer competitive benefits. A great example of this is Google; the company is constantly winning as a top employer to work for, and one of the main reasons for this is their prime employee benefits.
There is a wide variety of benefits you can offer to differentiate from other companies in the marketplace, such as education reimbursement for employees’ children. While not all businesses can afford these, there are several other, more affordable benefits available to attract talent and deliver better job offers than your competitors.
Continuously Review and Reassess Your Benefits Needs
Continuously reassessing, analyzing, and improving your benefits package is essential to stay competitive and keep up with a good reputation. A great way of achieving this is by keeping track of your employee’s experience. Period surveys or one to one meetings with your team can help have a clear idea of how they feel about their current benefits package.
So, Why Are Employee Benefits Really Necessary?
Employee benefits are strategically important for employers today not only because they boost your workers’ overall health and happiness, but because they considerably affect your business’s future performance and growth.
Human resources is always seeking to keep their companies competitive, and are increasingly finding ways to help their people have better work experiences through benefits that support their total wellbeing. Job satisfaction increases when good benefits are offered, employee engagement improves, businesses do better, and their reputation thrives.