Build an Employee Benefits Package That Attracts and Retains the Best People
It's clear that employee benefits play a big part in recruitment and retention. In MetLife's 2014 survey on employee benefit trends, 43 percent of employees strongly agreed that benefits were an important reason they came to a company, while 50 percent also strongly agreed that benefits are an important reason for staying put.
Many HR directors understand this. In a 2011 Harvard Business Review report, 60 percent of surveyed HR leaders rated an attractive benefits package as "very important" in recruiting and retaining quality employees, versus only 38 percent who rated a high base salary the same way.
The complication for middle market firms is that they often don't have the resources to match the full depth and breadth of health, retirement, and other benefits that larger companies can offer. However, they don't really have to in order to win the battle for talent. By enacting a diverse, responsive employee benefits strategy, you can still use the "total rewards" approach (salary plus relevant benefits) to enhance your ability to recruit and retain the best people.
Think Outside the Box
MetLife's research found that 80 percent of employees consider benefits tailored to their specific needs an important driver of loyalty. Midmarket business leaders can offer more than your average benefits package — without significantly driving up costs — by including the following elements:
- Health benefits with a mental/emotional focus. Coverage that addresses employees' mental and emotional well-being are common. An example is a confidential counseling program designed to assist employees with any problems that might distract them from their work.
- Wellness programs. Nutrition education in the workplace is the norm by now, but according to a benefits survey by the Society for Human Resource Management (SHRM), only 36 percent of companies reimburse gym-membership fees based on proof of use. Offering a tangible reward for hitting the gym might be an enticing incentive for people to find time to work out. It places the onus of motivation on employees, but thanks to the resultant improved health and fitness, this initiative can reduce medical costs.
- Health savings accounts (HSA). According to the SHRM survey, health savings accounts are offered by 42 percent of large firms. This is an option that the middle market should also consider, especially because the MetLife research found that 60 percent of respondents are willing to bear more of the cost of benefits they value. As a result, HSA offerings could reduce company costs and garner high employee satisfaction.
- Retirement benefits. Employers matching some or all of employees' contributions to a 401(k) account is no longer a real differentiator. On the other hand, the SHRM study found that just 53 percent of firms offer personalized financial consultation and advice. Personalized financial assistance could be a way for a midmarket firm to stand out.
Don't Neglect Paid Time Off
Work-life balance is just as important as health coverage when it comes to benefits. Note that there is an ongoing culture shift when it comes to paid time off (PTO); the traditional approach — segmenting vacation, sick and personal days — is losing its appeal. Offer more flexibility with a policy where employees receive a total number of PTO hours that they can use at their discretion.
Be Receptive to Employee Feedback
In order to ensure that an employee benefits package aligns with the workforce's needs and motivations, management should conduct regular surveys to gauge employees' overall satisfaction and ask for their suggestions and feedback. Remember that the preferences of employees from different generations can factor into which offerings are most attractive to the overall group. In the end, the most critical element for maximizing the value of employee benefits is the communication effort - it must be thorough and at regular intervals.
Research of industry and job-specific demographics can help identify the most attractive benefits as seen by the bulk of employees. Management should also assess benefit use annually to determine whether there is any gap in employee perception of the value of a particular benefit versus its actual use. This will help show where benefit changes could maximize value to employees and the firm.
During the recruitment process, what is the best way to illustrate the quality of your company's benefits offerings? Let us know what you think by commenting below.
Rob Carey is an NCMM contributor and a features writer who has focused on the business-to-business niche since 1992. He spent his first 15 years at Nielsen Business Media, rising from editorial intern to editorial director. Since then, he has been the principal of New York–based Meetings & Hospitality Insight, working with large hospitality brands in addition to various media outlets. Circle him on Google+.