Why Benefits are Better than Pay for Employee Retention
In 2019, Barometer analyzed a sample of Glassdoor reviews from companies scoring high on employee retention measures. What they found was that only 62% of reviewers gave their salary a positive rating. Meanwhile, 90% of reviewers from the same sample gave their benefits a positive rating. The approval rating's disparity emphasizes how critical benefits are in a compensation plan. So let's explore why and which benefits influence employee retention.
While a good salary can increase employee satisfaction, it does not enhance the employee's experience. Benefits, on the other hand, can do both. There are a ton of niche benefits that can go into a unique compensation plan. However, a couple of benefits remain fundamental to any great package: health insurance and 401ks. And be warned, just because they're fundamental doesn't mean they're fun. Setting up these benefits can feel like a full-time job of its own, so don't be afraid to try out an employee benefits management system.
Streamlining your employee benefits management process will provide you with more time to consider adding unique benefits to attract stronger applicants. Some employee benefits management software even allows you to shop around the nation's leading carriers directly from the user interface. You will find carriers providing attractive benefits such as tuition reimbursement or education stipends, two of the most appealing benefits to the modern applicant. While these benefits may not be an excellent fit for every company, there are loads more to consider.
There are, of course, limitations to what your company will be able to offer. Budgets, after all, do exist. But don't think about adding benefits as adding another expense. Because, when you weigh the costs of training a new staff every couple of months against the cost of investing in your current workforce, the results might surprise you. 99 times out of 100, investing in your employees won't cost you a penny. The money you save by reducing turnover coupled with the money you earn as productivity increases will offset the cost of adding new benefits.
With a comprehensive compensation plan becoming the norm and employee retention nearing an all-time low, it's never been a better time to consider which benefits will foster a more productive work culture for you and your team. So remember, a business with better benefits sees better business results.
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