Your employees are the backbone of your business, and giving them a positive work experience is crucial to growing your company. Your benefits plan can be a valuable tool you can use to give more to your workers, but a better plan doesn’t have to come at a steeper cost to you. In fact, building a plan that’s designed with your employees’ best interests in mind can ultimately save you thousands.
Here’s why prioritizing your employees can increase the cost-cutting power of your benefits plan.
Happiness Creates Productivity
Your employees pay attention to whether or not their value is reflected in what they get back from their employer. Providing them with great benefits is an easy way to show that:
- You care about them as people and value their health
- You acknowledge and appreciate their contributions to your business
- You want them to continue working for you
Your benefits plan can significantly raise overall employee morale, which not only creates a more positive workplace culture, but also increases earnings. In fact, a study by the Queens School of Business found that having just one “disengaged” employee can cost a business up to $10,000. Working with more “engaged” employees, on the other hand, can have a positive impact on your company, increasing productivity and customer satisfaction levels by 15 and 30 percent, respectively. When your employees feel taken care of, they’ll do more to take care of your business in return.
Higher Retention Rates Drive Costs Down
Even if everything else about your company is great for your employees, your retention rates will suffer if your workers are unhappy with their benefits plan. In a study by MetLife, 61 percent of employees said that health and wellness benefits would make them consider leaving their current job for a new one. If a competing business in your area offers a better plan than yours, you risk losing a large portion of your workforce.
The costs of high turnover rates are staggering: Employee Benefits News reports that it costs 33 percent of an employee’s salary to replace them, which means that if just two employees with a salary of $45,000 leave your company, your business could lose $30,000 searching for and training new hires. While eliminating turnover altogether isn’t always possible, offering a quality benefits plan can give your employees a solid reason to stay with your company.
Good Benefits Attract Top Talent
There’s no reason your business can’t be the one using superior benefits to attract other companies’ employees. A study by Fractl revealed that when choosing between a job that paid more and a job that paid less, 88 percent said that they’d give the lower paying job either “some consideration” or “heavy consideration” if it offered better benefits. Even if your growing business can’t afford the competitive salary offered by larger companies, you can still appeal to more skilled workers whose knowledge and experience can increase productivity and profits.
Building your benefits plan around your employees’ wants and needs can save you tens of thousands of dollars and give your business a great reputation in the hiring market. Your employees will be more productive and more likely to stay loyal to your business if they have good health care, and when you do need to recruit more workers, a high-quality benefits plan will attract the talent to match it.
The views of the author of this article do not necessarily represent the views of Gradifi. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Readers should consult their own attorneys or other tax or financial advisors to understand the tax, financial and legal consequences of any strategies mentioned in this article.