As the labor market gets tighter—particularly for highly skilled workers—many employers automatically think higher wages are the answer to their retention problems.
But in many instances, enhanced benefits provide a more powerful incentive. Even better for employers, the cash cost of some enhanced benefits is significantly less than the cost of higher wages—especially once you factor in the expense of higher payroll-related taxes.
The U.S. unemployment rate currently stands at about 5%—a level that economists once considered “full employment.” Over time, as the pool of available workers continues to shrink, more employers will likely focus on benefits as a recruitment and retention tool.
Successful enhanced benefits programs are tailored to the specific needs of workers. And successful managers pay close attention to—and effectively balance—the composition of their workforces and the desires of individual staff members.
For example, top-valued benefits change dramatically between the generations in the workforce. Older workers, not surprisingly, place higher value on increased options for retirement savings. Workers in their 30s and 40s often value benefits that help them preserve a balance of work and family. Younger workers want more opportunities to sharpen their skills and prepare for advancement in their careers.
Unless a workforce is composed of robots that are all exactly the same, a menu of enhanced benefits offerings may prove attractive to meet employees’ varied needs.
Want to retain top talent—and share strategies that will help your employee benefits clients do the same? Here are a few benefits options every business should consider offering:
- Allowing employees to donate unused sick days to co-workers in need.
- Paid time during work hours for employees to volunteer or organize community events. This is a particularly valuable benefit for younger workers who typically want to see strong commitment to community involvement from their employer.
- Education benefits such as tuition assistance—another favorite for younger workers. These become particularly powerful tools for retention when the education benefit is linked to a clearly defined career ladder. To generate even more power, connect education and a career ladder with a mentoring program that matches promising young workers with more experienced employees.
- Telecommuting options that allow employees to work from home one or more days a week. Workers who are focused on balancing work and family particularly value this benefit.
- Flexible scheduling programs, which employees can use to juggle child care schedules or the fluctuating needs of busy times at work.
- Paid maternity and paternity leave policies, as well as day care benefits.
- Voluntary health benefits such as long-term care insurance or more generous benefits in the company plan for health problems, such as arthritis, that more commonly affect older workers.
- Fitness-related benefits, such as company-paid subsidies for gym memberships. Wellness programs such as noontime walking groups also build relationships that help reduce turnover, often with little company expense other than the cost of some T-shirts.
- Casual dress policies, which are surprisingly valuable. If nothing else, casual dress policies help recruit workers who may fear the expense of buying a new wardrobe for the new job.
- Bonuses that reward specific performance rather than increases in base pay. Consider paying smaller bonuses more often. If you offer signing bonuses to new recruits, offer half today and half later on.
How can you determine which enhanced benefits would most likely retain your existing workers? Ask them. Even an informal survey will provide useful—and often surprising—feedback.
The battle is on for top workers. Enhanced benefits can help you win.
Valerie Clark is president of Clark & Associates, which helps people find affordable health insurance in Nevada.