Years ago, when times were great, companies had pretty awesome benefits packages. You name it, they had it. Those were the “good ole days” when employees had preference choices and felt like they were getting something in return for all the long hours spent toiling away. However, as the economy soured, companies struggled to save money by tightening budgets and reducing spend. This included eliminating most, if not all of the premium benefits that were formerly offered to employees. Fast forward to today, where there’s more money to spend, but many companies have decided to turn their focus elsewhere…whether that’s creating solutions, innovating products, or working on employer brand, benefits have taken a back seat.
It’s time to move benefits in to the driver’s seat. Put benefits to work for you…not against you. Instead of focusing on the expense, focus on the opportunity your organization will have in attracting and retaining the right talent. In a 2012 report by Towers Watson, research showed that the “right mix of benefits can be a critical component in a successful long-term plan for attracting and retaining employees, proving to be the competitive advantage employers need to succeed in a challenging economic environment.”
Let’s take a look at how benefits can have a positive impact on your bottom line…
Often in a tight job market, we find ourselves competing with other industry leaders for the same talent. Salaries may be similar, and projects may vary only slightly. What differentiates you from the next firm is your ability to offer a competitive benefits package that will close the deal with your top candidate. It’s true that you may offer standard health, dental and life insurance, but what about tuition assistance, flexible spending accounts and a generous vacation plan?
In the Washington, D.C. market, many firms have similar benefit offerings; however the differences lie in two distinct areas: tuition assistance and paid time off. Several of the top professional services firms offer $5,000 of tuition assistance for extended learning, graduate programs, and/or certificate opportunities. This amount is provided each year towards furthering education and building the internal pipeline–strengthening the employee base and attracting those candidates who are interested in continuing their education at a later date. To contrast this, there is one firm that does not offer any assistance whatsoever. Based on my personal work experience with this firm, they lost candidates to a competitor that offered a greater benefit and appeared to value the creation of educational opportunities.
In regards to paid time off (PTO), there are still organizations that require you to separate leave in to two buckets: sick and vacation. It’s time to stop splitting hairs here. If you’re not providing one lump sum of leave, consider making the change. Allow employees to use their time the way they see fit. They are responsible for the planning and oversight of PTO…not the other way around. This benefit also has shown a reduction in unplanned employee absences, which has a definite impact on workload and the bottom line of any department.
Now that companies are back on their feet, hiring has increased and employees are beginning to look around for other opportunities. Employees leave for several reasons…but you may be surprised to learn that the lack of benefits is one of the top 5 reasons someone moves from one employer to the other.
Consider this example: employee hears from a friend that Company X is hiring. Salary and position are a lateral move; however, Company X provides the following:
- $5k in tuition assistance
- $150 transportation subsidy and paid parking
- Unlimited PTO
- Signing bonus
- Free gym membership
- À la carte health (meaning you can choose your type of coverage from a mix of benefit options)
Right now, your lack of benefit options creates the feeling of need in your employee to look around for something better…something more substantial…something that creates that “tipping point” to either stay or go. I’m not suggesting that you immediately determine that your current benefit options are insufficient, only that you take the time to review what’s offered and where you might make changes. Employee surveys and discussions are great ways to understand what your employees are really looking for. Also, taking a look at what your competitors offer is always a good thing. Stay informed so that you have the ability to be on equal footing or, ultimately, lead the pack.
Employee referrals are the best way to build your talent pipeline…so having a great employer brand is important. If word on the street is that you lag behind the others in benefit options, your referrals may also be lagging. However, if you’re providing options and really listening to what your employees want, you’ll have some of the best brand ambassadors in town.
The statistics are pretty clear:
“In a 2013 study of employee benefits trends, MetLife reported that 83 percent of employees who endorse their company as a great place to work report being loyal to their employer. More than half — 51 percent — said they would assume more of their benefits cost if they received more benefits to choose from in return, and 59 percent reported benefits as a significant reason to remain with their company if they have a satisfactory range of benefits to choose from. Lastly, 73 percent said their employers provide a work-life balance, which made them more loyal to the company.”
Benefit options have the ability to create leads and open doors to candidate interviews. The right options can also keep employees engaged and retained. Let benefits work for you. It’s time for a review.