Employee benefits can be expensive and difficult to offer as a small business. So why offer them? Why are employee benefits important? This article will give you 5 reasons why employee benefits are so important.
1. Attract better employees.
Having employee benefits to list on that job description sure makes a big difference in who you’ll be able to attract. Different generations will care about different benefits. So, consider what appeals to each group and who you are trying to attract. Read more about this here.
This entrepreneur article sites a 2011 Harvard Business Review Analytic Services survey of human resource leaders, 60 percent said an attractive benefits package is “very important” in recruiting and retaining quality employees, vs. only 38 percent who said a high base salary is very important.
2. Hold on to these better employees.
If you attract new employees by just using a high wage, it will be harder to convince these same employees to stay once they are offered a higher wage somewhere else.
MetLife, in its most recent annual trends survey, found that around 49 percent of employees said benefits were an important reason they came to work for a company, while 60 percent said benefits are an important reason for staying.
Employee benefits can help you hold onto those employees after they help you attract them. Dowload The Ultimate Employee Benefits Guide here.
Consider allowing employees to customize which benefits they take advantage of and which they don’t instead of using a cookie cutter approach.
In general, which benefits do job seekers really care about? What are potential employees really looking at while considering a move to a new job? According to this Monster survey the average importance by benefit looked something like this:
- Healthcare Plan: 32%
- Vacation Time: 25%
- Pay Raise: 15%
- Employee Benefit: 10%
- Performance Bonus: 9%
- Retirement Plan: 8%
Notice, Healthcare and vacation time is rated above a pay raise. Then, right after pay you see employee benefits are listed again. Added up this means employee benefits make up 67% of the most common reasons employees might choose to stay.
3. Increase morale and promote work/life balance.
An employee benefit package for your employees will boost morale company wide. When morale is up and employees feel valued in this way it can make them more productive.
Many lump something called employee perks into the same category as employee benefits. You can learn about the difference between employee benefits vs. perks here. But, for the sake of this article, we’ll just say that there are many perks you can offer your employees that help them keep a healthy work/life balance.
An Employee Assistance Program (EAP) is also a common employee benefit that employers will offer to their employees. These programs are offered to help employees who deal with issues such as depression, family crisis (divorce, death, etc.), alcoholism, drug addiction, teen problems, suicide prevention and much more.
4. Promote health among your employees.
Employers who provide a group of benefits commonly called a wellness program find that they can lower the number of claims and claim costs by promoting improved health among employees. These programs might include things like health screenings, blood tests, flu shots, smoking-cessation groups, and discounts on exercise classes and diet plans.
Employees simply having health related insurance will make them more likely to seek preventative care and treatment when issues arise. This keeps your workforce healthier and happier.
5. You’ll sleep better at night.
I’ve heard from many business owners that one of their biggest reasons for providing employee benefits like Short and Long-Term Disability, AD&D, or Life Insurance is because it makes them rest easier at night. They can rest easy because they know that they are providing a safety net for their employees in case something might happen to them. They are offering a way to provide for and help their employees’ families in case of emergencies.
Insurance, after all, is supposed to help us with peace of mind. In this case, you will certainly feel better knowing that you’ve provided a great support system for your employees through these benefits. So, why are employee benefits important? Because they help you attract and retain better employees, keep them healthy and happy, and at the end of the day it helps you!