For many organizations, employee retention is one of the leading workforce management challenges, as high turnover across various industries continues to affect the workplace.
Within the past few years, workers have been quitting their jobs in record numbers, especially low-wage jobs. As a result, employers are rightfully concerned about how turnover can affect their business moving forward. It's long been understood that a high turnover rate is costly and has ripple effects throughout a business and industry at large.
One of the most effective ways to retain employees and minimize turnover in such a competitive marketplace is by offering meaningful and competitive employee benefits.
Employee benefits are essential both for attracting talent and for employee retention. Not only are they valuable because they provide a compensatory reward to workers, but also because your company's benefits demonstrate how much you appreciate and value your employees.
Advantages of a Competitive Benefits Package
Considering how competitive today's job market is, ensuring your benefits management plan reflects a positive and supportive workplace will help your company stand out from the competition and attract quality talent.
But before delving into some of the most competitive benefits and perks your business can offer, let's explore some of the advantages of providing an excellent benefits package:
- Giving your business a competitive edge – Almost one-quarter (23%) of workers don't receive any benefits from their employers, while only 61% of those who receive benefits are satisfied. Your business should strive to stand out from the competition by offering existing and prospective employees a package they can get excited about.
- Talent acquisition – If you want to attract and hire the best employees who are motivated, you need to offer a the most desired employee benefits.
According to Glassdoor, 63% of job seekers consider employee benefits as a top priority when considering taking a new role with a particular company. So if you want to acquire top talent, you need top benefits. - Enhance employee satisfaction – Some benefits and perks, such as wellness plans and paid leave, can help create an attractive work-life balance for your staff, reduce low employee engagement, and prevent employee burnout.
- Lower employee turnover – Great employee benefits packages are one of the best ways to acquire staff and also keep them happy and loyal in their roles.
- Reduce overall cost – Benefits packages that retain employees help organizations avoid additional costs associated with hiring, onboarding, and training.
Benefits drive employee satisfaction and aid in creating a higher-performing workforce and environment that people want to be a part of.
The Top 7 Competitive Benefits to Improve Employee Retention
Before creating or overhauling your benefits package, it's important to understand the reason behind your high employee turnover. One way you can determine the root cause of employee turnover in your workplace is to conduct surveys or interviews with employees, from retained senior employees to those leaving your business. Then, gather useful information on what your employees like about your organization's benefits package, as well as what may be causing the turnover.
While your company's demographics will have a significant impact on the perks and benefits your employees want, here are the most common and top trends that are valuable to employees across roles and industries:
1. Equal Paid Paternity Leave
Although paid family leave often tops the list of the most coveted employee benefits a company can offer, and with 58% of employees considering it the leading perk if you want to extend it above and beyond with your package, ensure you create an inclusive package by offering equal paternity leave.
Companies currently have a significant disparity between paid paternity and maternity leave perks, affecting how much time fathers spend with their newborns. An inclusive parental leave package catering to all families will help create a more welcoming work environment for existing and prospective employees.
This strategy alleviates the stress and anxiety of being a new parent for all workers. It also ensures both parents can balance their jobs and personal lives happily and satisfactorily. In addition, equal parental leave can result in improved mental health and boost career progression for employees.
2. Flexible Workplace Arrangements
COVID-19 has dramatically changed how people work. It has enabled and normalized remote and hybrid work models. Consequently, flexible workplace arrangements are still an in-demand work benefit post-COVID-19.
Beyond remote and hybrid work, some common examples of flexible workplace arrangements include:
- Four-day workweeks
- Flexible hours or "Flextime"
- Unlimited paid time off (PTO)
- Shift swapping
Many workers desire flexibility in when and where they work, preferring remote options or even part-time hours. Employees desiring flexible workplace arrangements will feel more satisfied and productive than their in-office counterparts.
In work environments where remote work is not feasible or with jobs that can't be done remotely, hybrid arrangements and flextime allowing employees some days per week to work remotely or enabling employees to work during compressed work periods or traditional hours are popular. According to the Society for Human Resource Management (SHRM), 42% of companies that experienced enhanced turnover in 2021 have incorporated remote or flexible work options to minimize turnover.
Implementing flexible workplace arrangements demonstrates that your business caters to the varied needs of your staff. Flexible workplace arrangements can bring freedom to employee work schedules, allowing employees to live a better work-life balance
Some examples of flexible workplace arrangements that can greatly benefit employees include:
- Parents or caregivers looking to spend time and care for their children
- Patients suffering from chronic pain or disability
- Individuals who spend a lot of time commuting
3. Employee Bonuses
Workers like to see some extra cash in their accounts. This makes bonuses one of the simplest and most effective ways to achieve employee retention and satisfaction. Bonuses can dramatically and positively impact employees, helping them feel encouraged and rewarded for their efforts and motivated to continue with high performance.
Some of the ways you can include bonuses in your benefits package include:
- Annual year-end bonus – You can incorporate a bonus based on salary percentage for all employees, depending on how profitable the year was.
- Milestone employee bonus - You can award a milestone bonus directly linked to individual performance for those who meet a particular goal or metric.
- Spot bonus – You can implement a low-cost bonus to reward employees as gratitude for demonstrating some values, like when an employee stays past their time to help a colleague complete a time-sensitive task.
- Holiday bonus – These can include a festive season, a one-off cash bonus as a form of gratitude for a year of productive work
4. Health Benefits
The quality of health benefits is often directly correlated with workers' satisfaction in the workplace. For many employees, employee-sponsored health benefits are a top factor when deciding to stay or quit their current job or when looking for job opportunities.
The core healthcare benefits your business can offer to improve employee retention include:
- Group health insurance: Traditionally, employers could select and buy a group health insurance plan. Employees had to choose if they'd like to be covered in their employer's group health insurance plan. This works best for employers with a large enough group of employees to minimize the coverage cost.
- Healthcare Reimbursement Arrangement (HRA): With HRA, employers can reimburse workers when they pay for eligible health expenses out of pocket or health insurance premiums.
5. Education Support and Funding
Helping your staff access learning resources is a great way to ensure your benefits package is as inclusive as possible. Not only are you empowering them to be better through employee development plans and upskilling, but their newly acquired skills and expertise, in turn, benefit your business in the long run.
One way you can offer your employees educational support is to create a learning budget for each individual.
Granting employees a learning budget can allow them to freely spend on:
- Learning courses
- Textbooks and resources
- Workshops and seminars
This can be an excellent strategy for employees who want to take short courses to build their knowledge around a specific area.
Alternatively, your company can also offer support through tuition funding for staff members who wish to study at a college or university. Many employees, particularly young professionals, suffer from continuing student loan debt. You could offer tuition reimbursement and loan repayment benefits to proactively address the problem. This support will also help employees who may not have had the opportunities or funds to study before getting a job.
These programs help reduce the financial burden on staff members and motivate them to pursue advanced courses and degrees.
With extra knowledge and skills, employees who pursue more education will benefit your business by adding value to their current roles. Investing in your employees' education and development is equally an investment in your business.
6. Employee-Sponsored Retirement Plans
Employee-sponsored retirement benefits plans, including 401(k) plans or defined financial wellness plans, are increasingly crucial in retaining employees. Retirement benefits offer employees a retirement solution and safety net that allows them to enjoy life after their careers end. Most importantly, retirement plans allow people to live comfortable and sustained lives.
While programs like Social Security are automatically available as part of employees' retirement plans, most people value additional retirement benefits that enable them to save for their retirement years. Many employees rarely remember to save for retirement, but when offered a savings option and retirement plan, it helps them begin the critical step.
Aside from 401(k) plans, other common employee retirement plans include:
- 403(b) Plans
- Employee stock ownership plans
- Profit-sharing plans
Organizations that don't offer employee retirement benefits are less likely to have employees who would want to stay at the company until they retire.
7. Tailored Perks
There is often no one singular benefit that appeals equally to all employees, so it's important to try to create benefits and perks packages tailored to appeal to your staff.
In addition to offering the basics such as flexible workplace arrangements and good healthcare benefits, you can offer your employees these more specific perks:
- Discounted gym memberships
- Cell phone service
- Car financing
- Travel costs
- Meal programs
Whatever it is, be open with your employees about what perks appeal more to them. This will help you identify and resolve any issues or concerns your employees may have with the workplace.
Improve Employee Retention & Embrace Organizational Success
Whether you want to attract top talent or enhance your existing employees' satisfaction for better retention, evaluating your perks and benefits schemes is crucial for success in the current workplace.
Stop thinking about employee benefits as a requirement and look at them as employee recruitment and retention tools. A positive workplace where employees feel valued and cared for makes them want to stay. So if you want to give back to your employees or boost retention rates, you need to enhance your benefits packages and start dishing out competitive perks.
With a comprehensive cloud-based benefits solution, your business can have an easier time managing, distributing, and assisting your employees with their options for benefits packages. Contact us for more information.
