A well-designed benefits package is a great investment for your company, resulting in significant returns for the money spent.
Although proving ROI case for benefits can be difficult, in general, employers agree that a thoughtful, attractive benefits package can help recruit and retain employees. It helps improve morale, increase productivity, and decrease overall healthcare spending.
We also know employees care about benefits. A lot. Benefits are the third highest contributing factor to employee job satisfaction as well as a significant contributing factor to decisions to take a job or leave a job.
There’s so much at stake. How can employers create a benefits package that keeps employees healthy and happy while also protecting their bottom line?
5 Ways Employee Benefits Can Boost Your Bottom Line
Before we look at the most popular employee benefits, consider these 5 ways a well thought out employee benefits package can benefit your company. Each of these areas are backed by industry research and tied directly and indirectly to your bottom line:
1. Employee Benefits Improve the Overall Health & Wellness of Your Workforce.
Benefits such as onsite clinics, comprehensive health insurance, gym memberships, workplace wellness programs, and annual health events can directly impact your company’s healthcare spending. In fact, according to an in-depth study of health benefits conducted by Hub International, 66% of employers are realizing an ROI on their health initiatives. To achieve the greatest ROI, companies should include workplace wellness initiatives that focus on chronic disease management and mental health in addition to lifestyle modifications. In addition, a well-designed benefits package can improve overall wellbeing – including financial, emotional, social, and career wellbeing – by decreasing stress, increasing financial wellness, and providing educational and professional development opportunities.
2. Employee Benefits Satisfaction Correlates Strongly with Overall Satisfaction.
There are so many statistics, surveys, and studies that show a definitive link between a high-quality benefits package and employee satisfaction that it’s difficult to focus on just one:
- According to Aflac, 96% of employees who are satisfied with their benefits also report high levels of job satisfaction.
- Similarly, the Employee Benefits Research Institute found that over 80% of employees who ranked their benefits satisfaction as extremely or very high also ranked their overall job satisfaction as extremely or very high.
- Overall, job satisfaction is on the rise, driven by better benefits packages. According to the 2018 Aflac WorkForces Report, 61% of employees are very or extremely satisfied with their benefits and 65% of employees are very or extremely satisfied in their jobs. This is up from 46% and 49%, respectively, in 2011. But how does greater job satisfaction relate to ROI? In many ways. Employees who are more satisfied with their jobs lead to more satisfied customers and more repeat customers. Employee job satisfaction also has a direct effect on higher productivity, engagement, and morale.
3. Employee Benefits Help Companies Target Specific Types of Workers.
- Many companies spend a lot of time, effort, and recruitment dollars finding the right kind of employees for their business. Strategically designing a benefits package meant to attract the kinds of workers you’re looking for can significantly ease your managerial burden in this area. For example, employers who are interested in attracting millennials should consider offering flexible, self-guided retirement accounts, tuition reimbursement, and flexible working hours. Generally speaking, Millennial employees highly prize flexibility and customization. 87% of workers in this age group feel that their current benefits package isn’t flexible enough to meet their needs according to Barclays. Generation X employees, meanwhile, are most interested in family leave. A company that relies on Baby Boomers may want to offer higher salary levels and full coverage health insurance. Tailoring a benefits package with enough flexibility to appeal to multiple generations can greatly impact your hiring and retention efforts.
4. Employee Benefits Improve Ongoing Employee Engagement.
- Disengaged employees are a growing concern for many employers. An in-depth study from The Engagement Institute concludes that nearly one-third of all employees can be described as being disengaged at work, costing U.S. employers up to $550 Billion per year. It makes sense that promoting engagement and motivation would be a struggle—getting a team of diverse people on the same page is difficult no matter what the goal. However, a good benefits package can be a great tool to help employers increase engagement. Employees who are happy with their benefits report higher morale, are more likely to recommend their company to a friend, and are more likely to say they strongly identify with their company’s core values. According to Inc., increasing engagement investments by just 10% can increase company profits by $2,400 per employee per year.
5. Employee Benefits Help Recruit and Retain Top Talent.
- The war for talent is real and getting tougher. 63 percent of employees say that they carefully consider benefits before taking a job while nearly fifty percent say they would apply to a different company if they offered better benefits. In response to these trends, nearly
- increased or modified benefits last year to retain employees. Some of the best benefits for recruiting and retaining employees are comprehensive health insurance, retirement benefits, wellness programs, flexible scheduling options, and professional development opportunities.
5 Popular Employee Benefits That Provide Consistent ROI
While nothing is ever a sure thing, these 5 employee benefits are consistently linked to significant returns for employers.
1. Health and Wellness Benefits Healthier employees tend to be happier, more engaged, and more productive at work while missing fewer work days than their less healthy counterparts. Fortunately, with workplace health promotion efforts on the rise, companies are well-positioned to have the greatest impact on workforce health. These workplace wellness initiatives also result in ROI, according to SHRM. Over half of surveyed HR professionals found that wellness programs decreased their healthcare costs, decreased unplanned absences, and increased productivity.
2. Financial Services and Financial Education Fifty-five percent of credit card holders carry a balance from month-to-month, student debt continues to rise, and most Americans don’t have $500 saved for an emergency. Employees who are currently in the workforce are unlikely to have received a solid financial education in school. That’s where you can help. Providing financial services and education can encourage your employees to budget, save, pay down debt, and improve their overall financial wellbeing. When employees aren’t stressed about their finances, they are also more likely to be focused and productive at work.
3. Paid Family Leave and Flexible Scheduling Want to know how important flexibility is to today’s workers? In a recent study by the Harvard Business Review, employees ranked flexible scheduling nearly as important as better health insurance when considering whether or not to accept a job offer. 88 percent of survey respondents said they would give heavy or some consideration to a lower-paying job that offered more flexible hours. Remote work options and paid family leave are a powerful tool for companies that are concerned with attracting top talent.
4. Tuition Reimbursement Programs and Paid Professional Development Employees are more likely to engage with your company when they are both challenged and supported. Investing in your employees’ personal and professional growth results in productivity gains, greater employee loyalty, and greater retention. 5. Customized Employee Perks & Benefits Education. The best benefits package is one that employees actually use—so it makes sense that customized benefits packages have the potential for greater ROI at a lower cost than standard packages. Putting together a more personalized benefits plan doesn’t have to be time-consuming. Use data and technology to offer the right options and allow employees to self-select the benefits that matter to them from a menu to limit administrative time. The key takeaway here is to not let perfect become the enemy of the good. Benefits packages can and should grow and evolve with your company. As you work to create a benefits package that delivers ROI for your organization, get to know your employees better. Keep investing in benefits education so employees get the most value from the benefits you do offer. Use technology to simplify your benefits package and create more opportunities for customization.
You can also rely on a healthcare vendor such as Proactive MD to help you analyze claims data, customize your onsite healthcare benefits, and prove ROI to company management. Ask us how we can help.