Benefits are no longer just a way to recruit top talent with the promise of free kombucha on tap and ping-pong tables in the lobby. They have evolved to be more meaningful to employees, contributing to a rich, including company culture. They can also be used to model the behaviors and actions you want to encourage with your team. Happy, healthy employees who feel valued by their employers are more productive.
This is why offering the right mix of employee benefits in your benefit strategy is crucial to the overall health and sustainability of an organization. But it has to be a genuine reflection of your company’s core values. Otherwise, it will come across as disingenuous to your employees. For example, a company that offers a benefits program centered around health and wellness will attract and retain employees that share those same values.
6 Reasons Benefits Are Strategically Important To Employers Today
Few organizations truly understand the strategic importance of a well-crafted benefits program. I’ll discuss the six major advantages I’ve seen based on my own experience.
- Benefits are offered by employers to attract good employees
Having a holistic, inclusive wellness strategy can give you a strong hiring advantage to attract new skilled workers and keep them.
Recent research by REBA showed that 74% of businesses consider employee well-being essential and beneficial for recruiting and retaining employees. Additionally, 89% of employees who work for wellbeing-friendly businesses would highly recommend their company as an excellent place to work. And we all know that word-of-mouth referrals are one of the best recruiting tools.
- Top-quality benefits can increase employee retention
According to a recent report by Paycor , the average turnover rate for companies that don’t offer a benefit plan is 157%. However, turnover rates were 138% lower for companies that provide a benefits plan with a mix of different options. Imagine how much time and resources you would save by decreasing your turnover rate by 138% – that would be a game changer. This is why you need to reevaluate your company’s benefits package and adjust to include a holistic wellness program. Not only does this help you stay competitive and reduce turnover, but it also shows your employees that you genuinely care about them and their physical and mental wellbeing.But most importantly, a wellness program helps your employees avoid burnout by giving them the tools and resources they need to manage their stress.
- Benefits can increase employee productivity and performance
Gartner’s research has consistently shown that employee benefits supporting holistic wellbeing can boost employee “discretionary efforts” by 21%. Discretionary effort is just a fancy way of describing the additional effort an employee is willing to give beyond the bare minimum needed to do their job or to just check a box. I like to think of it as their motivation to do their best every day.
The emphasis here is on taking a strategic approach to holistic wellbeing — embracing a broader concept of employee wellbeing and offering benefits that are accessible and meaningful to everyone in the organization. For example, offering different types of benefits solutions, creating a flexible workplace , and prioritizing personalized and accessible physical activity can all significantly contribute to employees being happy and healthy, which in turn, increases their performance. The key is flexibility, which lets your employees access the benefits that they need, when, where, and how they need them. Otherwise, they just won’t use them.
- The right benefits can reduce burnout
An SHRM survey on job satisfaction showed that 68% of workers agree that a good benefits package is crucial to improving employee satisfaction and morale. A satisfied and healthy employee is less distracted and more motivated. Expanding this to your entire workforce results in higher performance, lower burnout rates, and fewer sick days. According to a recent Gallup report , 15-20% of total payroll goes to voluntary turnover costs because of burnout alone. The report also found that 75% of employer medical expenses are due to preventable conditions. The kicker is that these costs are all avoidable by investing in an employee’s overall health.
In the wake of COVID-19, supporting employee health is more relevant than ever. The pandemic brought with it a completely new way of working that blurred the line between work and life. Employees didn’t know when one stopped and the other started, resulting in the feeling of needing to be on the clock at all times. And what happens if we are always on the clock? Burnout. But if you design company-wide policies, model and reward the proper behavior and invest strategically in good healthcare coverage and an integrated wellbeing program, your workforce will have the necessary tools for self-care.
- Maintain your company’s reputation
Participants of the SHRM survey mentioned earlier agreed that employee benefits have a major impact on the reputation of any company, regardless of the size of the organization or industry. In our digital age, it doesn’t take long for a candidate to get a good picture of your organization’s reputation. Career platforms such as Glassdoor and Comparably offer free insights about your benefits program and your culture, supported by comments from past and current employees. You can’t hide from it, which is one more reason why you should be very deliberate and consistent when translating your values into every aspect of your company.
People looking for a job are more likely to accept a position from a company that has a positive, employee-centric reputation than one that is perceived as indifferent to its employees’ wellbeing. This really speaks to the culture you’ve cultivated for your organization. Is your culture celebrated by your employees at all levels? Does it reflect the core values of your company? Is it inclusive? Does it focus on improving, not just maintaining, the wellbeing of your people?
A good benefits package is a reflection of how a company values its people. It can help build a positive reputation for a company. An investment in benefits that go beyond the basics is a certain way for any company to reinforce its reputation as a good place to work.
6.Stay ahead of your competitors
To be able to compete for the market’s top talent, it is key to offer a competitive, holistic benefits program. A great example of this is SAP. The company is constantly winning awards through Glassdoor and Comparably as a top employer to work for. One of the main reasons for this is their prime employee benefits.
There is a wide variety of benefits you can offer to differentiate you from other companies in the marketplace, such as reimbursement for childcare, long (and inclusive) paid parental leave, voluntary employee benefits, and continuing education. While not all businesses can afford these, there are several other, more affordable benefits available to attract talent and deliver better job offers than your competitors such as flexible schedules, paid time off for volunteering, and a host of wellness benefits.
Continuously Review and Reassess Your Benefits Needs
Continuously reassessing, analyzing, and improving your benefits package is essential to staying true to your evolving culture. It helps you stay competitive, and ensures your reputation as a company remains high both internally and externally. Be deliberate about culture. Is it where you want it to be, or is it sliding backward? A great way of achieving this is by keeping track of your employee’s experience. Period surveys or one-to-one meetings with your team can help have a clear idea of how they feel about their current benefits package.
So, Why Are Employee Benefits Really Necessary?
Employee benefits are strategically important for employers today not only because they boost your workers’ overall health and happiness, but because they considerably affect your business’s future performance and growth.
The superheroes in human resources are always seeking to take care of their people and keep their companies competitive by improving their employee’s experiences and investing in their wellbeing. And when you have the right mix of benefits, you can expect employee engagement and job satisfaction to increase, making your company a place you and your teams are proud to be a part of.
The Gympass Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.