Employee benefits are optional, non-wage, compensation given to employees in addition to their normal salary or wage. The typical benefits that are offered are healthcare, retirement compensation & planning, paid-time-off, vacation, and other perks that the businesses might offer. Employer-sponsored benefits are becoming more popular because they not only add value to the employees but the entire business as well. Having a strong benefits package can increase employee retention, enable healthier & happier employees, and allow your business to recruit top talent people.
Many businesses make the mistake of allocating 100% of their compensation to employee wages and salary. While salary is still the most significant determinant when Americans take a job, “46% of Americans said their health plan was either a deciding factor, or a positive influence, in the decision to take their current job.” (America’s Health Insurance) Employers who undervalue employee benefit packages will miss the mark when recruiting and retaining employees in a job market where other employers are increasingly offering benefit packages.
With unemployment at an all-time low, employers are struggling to find quality employees.
Millennials make up the majority of new hires, so it is important to understand what truly matters to them. One interesting aspect about the millennial generation is their view of money. They are a generation that doesn’t value money as much as previous generations. Millennials value paid-time-off and a flexible work schedule almost as much as they value healthcare benefits. Although cash compensation is important, a balance of compensation with other benefits is more highly valued by Millennials than just marginally higher compensation without benefits.
When considering healthcare benefits for Millennials, it is important to note that they value options, such as a wide range of plans and pricing. Millennials are a young generation that don’t necessarily want a rich medical plan because they won’t use it. However, if their employer doesn’t offer healthcare, they will likely not have any coverage at all. Millennials also have very low subscription rates for individual coverage through the state and federal exchanges.
Putting together a benefit package that works doesn’t have to be extremely expensive. Healthcare can be very important when recruiting employees regardless of age or generation. However, offering benefits like casual dress, telecommuting, and flextime could provide more value for younger employees.
Adding benefits to your business will also increase your retention rate, increase employee satisfaction, and reduce the cost of your overall health insurance.
High employee turnover costs businesses time, money, and productivity. Having a robust benefit package allows your employees to feel that they are properly compensated for their work. “50% of adults would leave their current job for better benefits.” (Yoh) In order to have a high retention rate you must meet the needs and wants of your employees. It is simple, if your employees are satisfied with their total compensation, including benefits, they will be happy with their current job. Adding benefits to reduce your turnover will save you money, but most importantly it will make them happier and more productive.
When it comes to health insurance having an employer sponsored plan is extremely beneficial for employees. “83% of employees say health insurance is very or extremely important in deciding whether to stay in or change jobs.” (EBRI) The individual insurance market is crumbling and cost continue to rise. Employees can get better coverage at a better rate through their employers.Employee Satisfaction
Having satisfied employees will not only increase the retention rate of your business but it will also increase productivity. A study by economists at the University of Warwick found that happy employees were 12% more productive than average, while dissatisfied workers proved to be 10% less productive than average. The correlation between benefits and job satisfaction is extremely high and should not be overlooked. “55% of employees cited health coverage as the greatest driver of job satisfaction, followed by paid vacation (18%), overtime pay (11%) and retirement plans (10%).” (Clutch) Employees who feel safeguarded by their employers produce better work and are happier overall.Reduced Costs
The individual insurance market is collapsing. While small group plans are becoming more popular and affordable. We have seen more and more businesses turn to small group plans because they often offer more coverage at a lower premium cost. According to eHealth’s report, “the national average small business plan deductible was 40% lower than the average deductible on an individual plan.” Small group plans allow employees to contribute to their coverage on a tax-free basis as well. This also provides tax savings for employers with reduced employer FICA (Federal Insurance Contributions Act) taxes on employee deductions for premiums.
We have worked with many clients to develop group plans that cater to their companies’ size, budget, and businesses needs and goals. Every company is different and every business has different goals. Understanding those goals and fully grasping the insurance industry is what we do best. We have a full portfolio of benefit options for business of all sizes that include: healthcare, dental care, vision care, long and short-term disability, life, accident, and liability.
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