When a company wants to increase profitability, traditional wisdom holds that owners should eliminate waste, reduce overhead, and reassess pricing. One seemingly counterintuitive method of shoring up your bottom line is to increase employee benefits. While key executives and stakeholders might be wary of adding to their operating costs, boosting worker benefits is one of the best investments a company can make for its own future. Here are five different ways in which offering robust benefits packages can help improve your company’s bottom line.
1. Decreases Turnover
According to a survey conducted by human resources publication ERE Media, on average, U.S. businesses spend about 150% of a mid-level employee’s annual salary when seeking their replacement. Consequently, filling a key position can prove economically debilitating for a small- to mid-sized businesses. As 71% of employees who are satisfied with their benefits packages are very loyal to their employers, a few extra vacation days can go a long way toward managing costs.
2. Drives Employee Engagement
A study conducted by Gallup found that companies that employ an engaged workforce are 22% more profitable than those staffed with disaffected workers. The reason for that significant disparity is simple: Employees who are engaged and focused work harder and with more passion and ingenuity than those who are disgruntled. However, in order to feel motivated to perform at an elite level, employees need to feel that their contributions are valued. One proven way to communicate that message is with a robust benefits package.
3. Improves Recruiting Efforts
As of 2015, Millennials became the largest generational demographic of the US workforce. And as businesses all across the world are discovering, Millennials have very different expectations and priorities than the generation before them. As a recent study conducted by MetLife found, 56% of Millennials used benefits as a determining factor when looking at potential employers. As such, companies that want to ensure their long-term viability need to offer potential hires enticing benefits.
4. Enhances Public Perception
If there’s one thing the business press loves, it’s reporting on the unusual fringe benefits offered by various companies. In addition to acting as a fantastic recruitment tool, “best places to work” articles can also boost a company’s public reputation. As more and more consumers are making it a point to do business with purpose-driven brands, being perceived as a great place to work can be very helpful in attracting new customers.
5. Lowers Health-Related Costs
In recent years, a growing number of businesses have made health awareness a key part of their company culture. This trend was sparked by the realization that healthier employees are more productive, require fewer sick days, and incur lower healthcare costs. Doing things as simple as offering discount gym memberships, conducting preventive health screenings, and hosting on-site yoga sessions can help protect a business from the $225.8 billion that US industry losses every year to employee illness.
Offering employee benefits has numerous benefits that affect your company’s bottom line, team morale, and employee retention. Be sure to take the impact of your business’ benefits packages into account on an annual basis to ensure that you are recruiting great talent and retaining skilled and experienced employees.
Canopy Health is a community of caregivers creating an integrated healthcare experience where quality care and coverage are provided by an alliance of top caregivers throughout the Bay Area. They offer refreshingly clear, human care that is achieved by making each unique member’s journey predictable, transparent, and cost-effective.
For more tips and inspiration for small business owners, visit Small Business Pulse SF Bay Area.