Beef up benefits to retain employees
Friday, June 17, 2016
Unemployment has dropped, salaries are creeping upward and, despite an uncertain construction forecast, firms are hiring to meet current demand.As competition for talent at all levels increases, employers can expect higher and faster rates of employee turnover.Now is the time to take steps to hold onto the employees you have, and one of the key ways to do that is through the benefits you offer.
Hiring and retention rates vary across industries, regions, and firm type and size. Still, the general pattern reveals a workforce that is primed for turnover after years of depressed hiring and stagnant wages.
In its “2016 WorkForces Report,” insurance provider Aflac states nearly half (47 percent) of all U.S. employees say they are likely to look for a new job in the next 12 months, and close to a third (31 percent) said they are “extremely likely” to do so.Millennials and Generation X workers are most likely to be looking for better opportunities.At the entry level, it is not uncommon for employees to stay a year or less to gain experience, and then move on.
The expense to firms in recruiting costs, onboarding, training and disruptions to work schedules can be considerable – as high as 30 to 50 percent of an entry-level worker’s annual salary, according to one calculation, and substantially more for more experienced employees.
When asked what their employer could do to keep them, between two-thirds and three-fourths of the employees in the Aflac study ranked a salary increase as their first choice. No surprise there.
The second choice for all age groups except those over 70, picked by 42 percent of participants, was a better benefits package, outranking both new growth opportunities and a promotion.Even more revealing was that 60 percent said they were likely to take job with lower pay if it offered a better benefits package, and 16 percent said that within the last year they had either left a job or turned down a job offer because they did not like the benefits package.
In addition, the study found that overall job satisfaction was higher among employees who were satisfied with their benefits package (a whopping 96 percent) versus those who were not (68 percent).
Changes in healthcare coverage and saving for retirement are creating a lot of stress for employees.More of their salary is going toward out-of-pocket expenses, copayments and paying off debt, undermining their efforts to save.Companies that offer comprehensive health coverage and lower copayments provide not just a financial incentive but also more of a safety net, which employees want and value.
A&D firms are not immune to these trends.One small boutique firm told a local business reporter it was having difficulty recruiting and retaining good employees until it began offering higher salaries and basic benefits, like healthcare coverage.The cost of turnover reached a point where they knew they had to do something.In the end, they increased compensation by around 20 percent per employee in order to attract more qualified and committed employees.
Rapid changes in demand for services tend to generate a hiring frenzy, drawing attention away from the employees already on staff.This creates tension that eventually leads to turnover.A recent article in Design Intelligence recommends that firms spend at least a third of their HR efforts on implementing programs and strategies to make current employees want to stay. An experienced HR specialist can help you develop these.
For employers, the challenge is to offer an attractive benefits package without straining the firm’s resources.Keep in mind that benefits may also include “intangibles,” such as flexible work schedules, ability to work offsite and career development assistance.There’s more than one way to show employees that you value them.
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