The Key to Employee Retention: Better Benefits

The Key to Employee Retention: Better Benefits

The American workforce is bouncing back from the recent recession. And along with the increase in available jobs comes a rise in voluntary turnover of employees. Each year, the average company loses between 20 and 50 percent of its employees and 83 percent of employees say they plan to look for a new job in the coming year.

While getting a new job is good news for the employee, it’s bad news for the old company’s profits. Replacing a lost employee costs 150 percent of that person’s annual salary. Managers spend precious time and money interviewing for new hires and bringing in help to handle the slack that’s left behind.

So what can business owners do to change this? Start viewing benefits as a competitive advantage. Seventy eight percent of employees said the employee benefits programs are very or extremely important in their decision to accept or reject a job and 58 percent said offering better benefits is the best way to boost employee retention. In other words, companies that have great benefits packages can more easily win over new talent and hold onto the employees they already have.

As for what offering good benefits entails, adding dental and vision packages to general health insurance is a good place to start. Of employees who are offered dental insurance, 80 percent use it, and of those offered vision care, 73 percent use it.

A comprehensive health insurance program helps employees feel taken care of and ensures they’re operating at 100 percent capacity. Healthier, happier employees have increased performance and better focus. And that kind of employee engagement can increase profits by $2,400 per employee each year. By focusing on improving the lives of their employees, companies set themselves up for continued and increased success down the road.

 

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