COVID-19 has changed the employment landscape. The Great Resignation that has come hand-in-hand with the pandemic is really a symptom. Employees want more. They want a better work-life balance, more flexibility (especially to work from home), and better benefits.
Improving the benefits you offer to your employees can positively impact your company in many ways, but it can be hard to make employee benefits affordable.
4 Ways Improving Benefits Impacts Your Company
Here are four ways improving benefits can positively impact your company's productivity and bottom line:
Attract Top Talent
It's generally considered a candidates' market right now. This means that to attract top talent, you need to give employees what they want. Ultimately, a company that offers sub-standard benefits will attract only sub-standard employees or people desperate to find any job quickly.
It can be challenging for small companies to compete with larger ones on benefits, as economies of scale reduces costs. However, doing so is more than worthwhile. You can attract talent that needs these benefits but is attracted to the idea of working for a smaller and more intimate company.
Retain More Employees
First of all, employees who have taken the first job they could get even if they didn't like the benefits are going to be looking right away for the job they actually wanted. They are unlikely to stay long and unlikely to provide good work while they are there.
Second, even employees who love their job and want to work for your company can be lured away by better benefits. In some cases, they might have little choice. For example, if you don't offer family benefits and a key employee gets married to a freelancer, they may jump ship to get benefits for their spouse, which they might not otherwise be able to afford.
This kind of turnover seldom results in employees giving a favorable report. Providing good healthcare and retirement benefits helps encourage employees to stick around.
Reduce Presenteeism
We talk a lot about reducing absenteeism, that is getting employees to take less sick time and come in. Unfortunately, when an emphasis on reducing absenteeism is combined with low sick time and low quality benefits, you end up with a lot of presenteeism.
Presenteeism is when an employee comes into the office, but they are not fully functional. This might be because of nasty seasonal allergies, a rotten cold, arthritis, depression, stress, or life events causing mental health issues. These "minor" illnesses cause a greater loss in productivity than things which keep people home. Additionally, an employee who comes in with a contagious disease such as a cold will share it around the office, resulting in a productivity drop for everyone.
Offering improved medical care reduces presenteeism by allowing people to get proper diagnosis and treatment for problems such as allergies or chronic headaches. Encouraging people to stay home when genuinely sick also improves productivity by allowing them to recover faster. Ensure that your health benefits also cover mental health, which is a major cause of presenteeism. Look into creating an employee assistance program which can give people access to financial health assistance and to counseling during crisis times, helping reduce and manage stress.
Increase Engagement
Your employees become more engaged and invested in your jobs when you offer better benefits. In 2019, Gallup polls showed that teams who score in the top 20% in engagement show a 41% reduction in absenteeism and 59% less turnover.
Benefits support engagement by helping employees feel as if you care about them, their needs, and their families. While they know it's a business decision, they still appeciate it. Engagement is also substantially increased by well-being initiatives and directly ties into employee wellness. Offering additional benefits can help further.
Your employees need to know that they and their time are valued. Then they will give you more, be more productive, and act as part of a team. Engagement also feeds back into the other issues by reducing turnover and encouraging employee referrals, which are a great way to find new team members who will fit in with your company culture.
How to Improve Employee Benefits Without Spending More
The challenge for smaller companies is that they have to pay far more per employee for the same standard of benefits. The average cost for single coverage is $7,813 per employee, while family coverage is $21,804. It's clear why many small businesses cannot afford to offer coverage to dependents. Only 53% of companies with fewer than 50 employees (who do not have to conform to the ACA) offer health insurance at all.
These costs can sometimes be prohibitive and can slow the growth of your company. Offering a bare-bones plan can seem to be your only alternative. Thankfully, this is not the case.
You have the option of partnering with a professional employer organization (PEO). PEOs allow your employees access to their master benefits policy. These benefits are negotiated by experts and benefit from economies of scale. Because your costs are being spread across the PEO itself and all of their clients, the cost per employee drops dramatically.
There are other advantages to working with a PEO too. They take on most of your routine administrative HR burdens, such as payroll and benefits administration. Also, they can help you design a wellness program to drop your benefits costs further and further increase employee engagement.
Improved employee benefits attract better talent, reduce turnover and presenteeism, and increase engagement. The best way for smaller businesses to afford them is to partner with a PEO.
