Providing employee benefits is not just a box to check, it’s a critical component in every company’s retention and productivity strategy.
Why employee benefits are important
How important are benefits to employees? Well, for starters, offering a generous employee benefits package is one of the most effective ways for employers to reduce churn. This has become even more critical during the Great Resignation. An estimated 48 million people quit their jobs in 2021, and while slowing, the trend is continuing in 2022. This is the highest level of resignations since the U.S. Bureau of Labor Statistics began tracking labor turnover more than 20 years ago.
What’s driving so many people to quit? Put simply, employees are leaving companies where they don’t feel valued. A recent survey by Consumer Affairs found that the top financial reason employees quit their job—reported by 47% of job quitters—was for better pay. The second, at 42%, was a desire for better benefits.
That means that when workers are deciding whether to stay at a company or make the leap to another one, benefits are one of the primary factors in their decision. Employers who want to keep their best performers need to make providing employee benefits that work for every employee, no matter their life stage, a top priority.
4 reasons why your company should offer employee benefits
Your employee benefits plan should be designed around making employees feel rewarded and appreciated for their hard work. Benefits should show your support for the health and well-being of the employee—and their loved ones. When employees feel like you’re committed to them, they are more likely to reciprocate with company loyalty. In addition, offering employee benefits will:
- Help retain talent. A recent Gallup survey found that the number one thing employees want at their next job is a significant increase in income or benefits, with 64% of respondents saying this was “very important.” Offering a substantial benefits package that makes employees feel appreciated will make them less likely to look elsewhere.
- Save money. It costs $4,700 on average to hire a new employee. Money spent on keeping or enhancing your existing benefits plan will keep you from potentially spending even more on hiring costs to replace workers who jump ship for a better benefits plan.
- Reduce absenteeism. Seventy-three percent of employees have caregiving responsibilities. A robust benefits offering that includes care benefits like Backup Care can also help reduce missed work days and absenteeism at your office.
- Increase productivity. According to our Future of Benefits report, 88% of HR leaders surveyed said that child care benefits have a positive impact on productivity, with 86% reporting the same when they offer senior care benefits. Mental health benefits were also cited, with 87% saying that they see a connection between these types of benefits and increased productivity.
Employers should also make sure that they are offering the benefits their employees want the most. We recently surveyed employers who are current Care customers, as well as their employees, and asked which benefits employees most value.
While both groups agreed on the top three, there was one major oversight on the part of employers when it came to one of the most-wanted employee benefits. Blindspots like this can mean the difference between retaining top talent, or losing them to a competitor.
Read: Important employee benefits according to employers…and employees
