Thinking Beyond Basic Benefits: How to Attract Talent to Grow Your Business
A record 47 million Americans voluntarily left their jobs last year amid the Great Resignation, leaving businesses large and small scrambling to find solutions to mitigate rapid turnover.
Although structural issues, salary and location all played a role in this massive employment shift, insufficient benefits ranked as the No. 1 reason workers put in their two weeks. In fact, more than 80% of employees prefer better benefits over higher pay, according to Glassdoor’s Employment Confidence Survey.
These days, it takes more than the benefits trifecta of competitive salary, vacation time and health insurance to attract and retain talented workers. If your company culture isn't centered around benefiting employees, you could fall short among competitors that are offering more.
Here are seven ways you can amp up your benefits to secure talent and grow your business.
Today’s employees want to work for companies that not only pay them well, but also provide a clear path to growth, promotions and leadership roles. Uplifting and encouraging motivated workers to help them become better professionals is critical, especially among Millennials and Gen-Z. These numbers from employee-focused software company G2 speak for themselves:
• 87% of employees say professional growth and career development are very important
• 58% say professional development contributes to their job satisfaction
• 34% say a lack of growth opportunities motivated them to leave their previous position
• 60% want leadership training
• Leadership training increases participants’ overall performance by 20%
• Retention rates are 34% higher among companies offering development opportunities
• Employees with access to development opportunities are 15% more engaged
The takeaway: If you don’t actively offer your team members tools, resources and encouragement to improve, they’ll most likely go find that support elsewhere.
Educational Opportunities & Reimbursement
Similarly, more than 94% of U.S. workers say they would stay at a company longer if it simply invested in helping them learn, according to LinkedIn’s Workplace Learning Report. There are endless opportunities for professional education, from everyday training like webinars and crash courses to life-changing degrees and certifications.
Given that more than half of all employees claim they are strictly self-taught in the skills they use at work every day, business owners should never assume someone has received proper training on a subject. Instead, they should be proactive in helping them expand their expertise and reach their goals. That means not only providing ample resources for ongoing, formal education, but also reimbursing these courses once they’re completed.
This benefits businesses as much as the employee. A well-rounded, properly educated team brings higher-quality ideas, innovation and problem-solving tactics to the table that enhance the bottom line.
Hybrid or Remote Work
The pandemic has permanently transformed U.S. employees’ mindset toward 9 to 5 office jobs. They've now proven that, in most cases, completing work from the comfort of home rather than a cubicle has little to no effect on quality or quantity. Moreover, one study from Stanford University found allowing remote work actually boosted companywide productivity 13%.
As a result, employees are less willing to wake up early, put on a suit and drive across town to perform the same tasks they could from their couch. That explains why more than 62% of all businesses have stuck with either a fully remote or hybrid model in post-pandemic times.
Each industry is different, but it's smart to capitalize on work-from-home opportunities and only require workers to come to the office when necessary. It all comes down to freedom, trust, independence and respect — all of which are highly valued by employees. As long as your team members are getting their work done well and on time, it shouldn’t matter where they do it.
HSA, HRA and FSA
Strategic businesses can give employees greater control over their healthcare costs with directed spend benefits, like Healthcare Spending Accounts (HSA), Healthcare Reimbursement Accounts (HRA) and Flexible Spending Accounts (FSA). Each of these brings benefits for employers and employees alike, as the money used in these accounts is often tax exempt or tax deductible. Here’s a breakdown to help you determine which is best for your business:
• HSA: This is essentially a retirement account that’s specifically for medical expenses. The employee owns the account and chooses how they want to use it. HSAs are great for employers, too. They offer plenty of tax savings opportunities and require the least amount of hands-on budgeting and management.
• HRA: Employers can set up a fund for workers that pays for medical expenses their health insurance plans don’t cover, like deductibles. You can decide the amount for the fund in advance, and employees can enjoy payouts from an HRA with every type of health insurance.
• FSA: Employees can put money into this account through payroll deduction before taxes, then use it to pay for qualified health expenses, childcare and elder care. FSAs typically cover the basics of consumer-directed healthcare, including lower insurance costs and tax savings.
More than 56% of all employers now offer either HSA, HRA or FSA, according to SHRM, and this number has grown 12% over the last eight years. If you fail to offer this easy-to-implement benefit, you may fall behind competitors in the race to attract and retain top talent.
401(k) Employer Match
Offering a 401(k)-employer match improves employee morale and attracts better new hires. And, like the directed spend benefits above, it also provides your company with tax advantages. Employers can approach this in two ways:
• Match a percentage of each employee’s contribution up to a set portion of their salary
• Contribute up to a certain dollar amount, regardless of employee salary
The most common employer match is 50 cents on the dollar for up to 6% of the salary, but your employees will likely appreciate any amount of extra support. It gives them a boost when investing in their futures and positions your company as compassionate and supportive.
Additionally, this benefit is one that can truly set you apart: Of the 56% of employers who offer any 401K plan (a low number in itself), only 51% offer matching, according to the Bureau of Labor Statistics. Yet, SHRM found 62% of workers view 401k matching as a key way to reach retirement and 57% would rather receive a higher employer match contribution than more paid time off. The demand is there, but for many, the benefits aren’t. Now is your time to capitalize.
Inflation is at a near all-time high. With a more than 9% spike in recent months, the 3-5% annual raises you’d typically award loyal employees have now essentially become a pay cut. If you want to stand out among competitors, ensure your salaries do more than simply keep pace with the increased cost of living. A well-deserved raise should still feel like a raise.
While it may be difficult to find extra room in your budget, studies show it pays to prioritize the financial well-being of employees you already know, like and trust. If their paychecks aren’t increasing along with the price of rent, groceries, gas and more, you run the risk of them jumping ship should another business offer them more money.
A 2022 study by Mercer revealed fewer than 25% of U.S businesses have made changes to their salary budgets due to inflation — despite nearly half of their employees directly asking for higher pay. Want to convince your team members you can read their minds? Bump their pay to fit the current economic landscape and watch as companywide loyalty and satisfaction soar.
Don’t Forget the Fun Stuff
Just because “extras” like birthday celebrations and team lunches aren’t usually a make-or-break benefit, that doesn’t mean they don’t help enhance company culture. Providing opportunities for employees to connect with each other — and potentially form lifelong friendships — will increase morale and motivation in the long run. The more your workforce feels like their job is a privilege and not a chore, the less likely they’ll be to leave.
A trusted employee benefits professional can help you identify even more ways to keep team members engaged and satisfied. If you need additional help with employee attraction and retention, the experts at Lovitt and Touche are here to provide guidance and advice. Learn more about our full range of employee benefits solutions.