Inadequate workplace benefits cause employees to jump ship
Friday, December 07, 2018
Employee benefits might be more important than you think. Smart companies are using them to attract and retain talent, and employees indicate that they prefer workplace benefits over a salary increase.
A report by the American Institute of CPAs (AICPA) reveals that by a margin of 4 to 1, American workers favor workplace benefits over an increase in salary.
According to a Randstad US report, 61 percent of employees say a strong benefits and perks package is the most important factor when considering job offers — and 61 percent would be willing to accept a lower salary if the company offered a great benefits package. And according to that study, 55 percent have actually left jobs because they found better benefits or perks elsewhere.
Perhaps that’s why a recent Gallagher report reveals that 45 percent of employers chose not to increase their employees’ costs for healthcare benefits.
So, why are benefits so important to employees, and which benefits do employees want?
Why benefits and perks are so important to employees
“Benefits and perks have undoubtedly taken on heightened importance in this era of generally meager salary increases that don’t reflect the high demand for talent,” according to Jodi Chavez, group president of Randstad Life Sciences, Randstad Professionals and Tatum.
She says they’re becoming more prominent because employees have changing expectations of work. “For example, while employees across the board want more freedom over where and how they work, they’re also adapting to the blurred lines of an employment world where email notifications ping 24/7 and there is often pressure to be ‘always on.’”
As a result, workers expect their companies to make adjustments. For example, the Gallagher report reveals that 55 percent of employers provide some form of telemedicine, allowing employees to connect virtually. “Employees want perks that provide convenience and contribute to a higher quality of life, like gyms and dry-cleaning services,” Chavez says.
Which benefits and perks are important to employees?
As can be expected, there’s no one-size-fits-all benefits plan. “Life phase, gender and income level all play a role in determining what benefits employees prioritize,” Chavez explains.
Having so many generations in the workforce also plays a role in which benefits and perks are important.
Across all demographic groups, quality health insurance is the top priority. “But beyond that, 41 percent of workers 18-24 say they wish their employer offered student loan repayment benefits, while Millennial and Gen Z women would like to see better parental leave policies and onsite child care,” Chavez says of the Randstad report.
“Highly-rated workplace-related extras workers want to see more of include early Friday releases (33%), flexibility and remote working (26%), onsite lifestyle amenities, like gyms and dry cleaning (23%) and unlimited vacation time (22%),” Chavez explains.
The AICPA report reveals some interesting differences among generations. Among baby boomers (ages 54-72), the three most popular benefits (in order) are healthcare, 401(k) match, and pensions. Three percentage points separate the first and second choice.
Among Gen X (ages 38-53), a 401(k) match is actually the most popular benefit, followed by health insurance, and pensions. A whopping nine percentage points separate the first and second choice.
Among millennials (ages 20-37), the top three benefits are healthcare, 401(k) match, and paid time off. Only one percentage point separates the first and second choice.
Opportunities for companies
Companies should also understand how carefully considering benefits can help their organizations. For example, adding a telemedicine option reduces employer (as well as employee) costs. Benefits like flu shots and tobacco cessation programs can help employees remain healthy, resulting in fewer sick days.
Gallagher’s report reveals that 22 percent of employers now offer three medical insurance plans, and 13 percent offer four or more plans. Almost half (46 percent) also offer tuition reimbursement, typically $5,250 per year, per employee. In addition, 89 percent offer life insurance, and 70 percent offer employee assistance programs.
A robust benefits program can go a long way toward luring top talent to your organization, reduce stress and financial uncertainty regarding healthcare, and make work-life balance more of a reality.
The best way to ensure you’re offering the best benefits for your employees is to ask them for their preferences. While you won’t be able to accommodate all of the suggestions, you’ll show your employees that you care about what’s important to them.
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