Managing employee benefits is an important and costly endeavor for employers and benefit programs vary significantly across the board. Benefits programs vary greatly. Some companies offer massages and air hockey at the office while others have an awesome retirement and health insurance that covers infertility. Your benefits program is a key player in employee retention. If you’re not offering what your employee wants, they will go find someone who is.
Step 1: Start With Mandated Benefits
There are certain benefits that most employers are required to provide. It’s important that you understand what is federally required before you build out your benefit strategy. In most areas, mandated benefits include the following:
- Time off to vote, serve on a jury and perform military service.
- Workers’ compensation requirements.
- Withhold FICA taxes from employees’ paychecks and pay your own portion of FICA taxes, providing employees with retirement and disability benefits.
- State and federal unemployment taxes
- Contribute to state short-term disability programs in states where such programs exist.
- Comply with the Federal Family and Medical Leave (FMLA).
Everything else is pretty much up for grabs. You are not required to provide health insurance, retirement plans, dental or vision, paid holidays, sick leave etc. So how do you decide what your employees want and where to put your budget? Companies with amazing benefits begin with a well-thought-out plan designed to meet employee needs, employer budget, and mutual objectives.
Step 2. Know What Matters Most
Your benefits package is a critical component in your total compensation costs and employee retention. In fact, some benefits packages account for 40 percent or more of total compensation costs. Your benefits package will be either a huge attraction or a major deterrent for top talent. With so much riding on what your company can offer, it’s important to understand what matters most. In a survey by Glassdoor, the following benefits were the most preferred by employees:
- Healthcare insurance: 40%
With the rising costs of healthcare in the United States, this one is pretty much a given. If you’re not offering health insurance to your employees, expect a seriously low employee retention rate. Chances are, your employees are already looking for another job.
- Vacation/Paid time off: 37%
COVID has taught us the importance in flexibility in schedules. Today’s employees aren’t interested in punching the clock every single day. They want the flexibility of vacation and paid time off. In fact, many companies see an increase in employee retention when they offer a salary system of unlimited time off.
- Performance bonus: 35%
Having a performance bonus is a motivation for employees to meet deadlines, objectives, and go above and beyond to get results. Sure, there are other ways to create incentives – but a performance bonus is preferred by over one-third of employees. When they know a bonus is coming, they’ll likely stick around to get it – increasing your employee retention.
- Paid sick days: 32%
This is especially important for parents who can’t predict when their child will wake up with a fever. Having paid sick days for themselves or immediate family is an important perk to allow employees to care for their loved ones.
- 401(k) plan, retirement plan or pension: 31%
Retirement benefits rounded out the top 5 benefits requested by employees. If your company isn’t offering a retirement plan, it won’t take long for your employees to find a company that will.
Step 3: Go Above and Beyond
Once you’ve covered the basics of healthcare, time off, and retirement, you have the opportunity to really set your company apart from the rest. This is where you can significantly increase your employee retention and attract top talent. Extra benefits may include things like:
- Childcare assistance
- Professional development
- Tuition reimbursement
- Gym memberships
- Wellness programs
- Home or personal services
- Catering at work or meal delivery
According to Glassdoor’s Q3 2015 Employment Confidence Survey, nearly four in five (79%) of employees would prefer new or additional benefits to a pay increase. Specifically, the younger workforce and women are more drawn to extra benefits. The survey results show 82% of women and 89 percent of all employees under the age of 34 would rather have better perks than higher paychecks.
Step 4: Think of your Employees
One-on-one conversations, surveys or group discussion could be used to gather employee perspectives and provide insight into how your benefits package contribute (or detracts) from employee retention. Many companies have found that one perk or benefit doesn’t fit everyone. Employees are usually as diverse in what makes them happy as they are in race, age, and stage in life. This is why we created Beny. Beny is an app where the employer contributes a set monthly amount to a lifestyle account. The best way to give your employees exactly what they want is to just let them choose.
Some benefits are valued more than others. Perhaps older employees might be more interested in retirement or health benefits while younger ones would rather have their car detailed or travel perks. Parents may want daycare covered, while others prefer traveling perks. Imagine a benefits program that works like a cafeteria where you can pick up what you want and leave what you don’t.
That’s exactly where Beny comes in.
When you offer customized benefits as part of your recruitment package, potential employees will see something they won’t find anywhere else – setting you ahead of the competition. Existing employees will want to stay, simply because of the perks that Beny brings to them and their families.
Best of all, Beny works with any budget size. You don’t have to have a multi-million-dollar benefits package to give your employees exactly a customizable and competitive benefits package with exactly they want.
“If you build it, they will come” – Ray Kinsella
Ray Kinsella had a vision of a baseball field that attracted all the top talent to come back and play. Your vision of custom employee benefits to attract top talent in your field can be just as real. If you build it right, they will come. Create a benefits package to recruit, engage and retain. When your benefits package stands out and serves your employees, they will respect the value and appreciation you provide. The ultimate result is better employee retention, engagement, commitment, and productivity at work – and that’s a homerun.