Why is an Employee Benefit Plan important

Many job seekers consider benefits one of the most important factors when considering potential employers, even overcompensation.

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29% of Millennials would trade 10-20% of their salary in exchange for the benefit of remote work. Maintaining employee benefit plans should be an integral aspect of every organization’s HR department. | McKinsey

Importance of Employee Benefits Plan

1. Engaged and motivated employees

The most obvious reason for employee benefits is to keep your staff happy and engaged. A well-rounded benefits program shows employees that their organization is invested in their happiness.

Employee benefits can range from the standard—healthcare, retirement plans, performance bonuses, stock options, to the more progressive—unlimited time off, fitness programs, student loan reimbursements, or child care stipends. Encourage staff to understand and utilize their benefits, so they feel happy and engaged within your organization.

PTO packages motivate employees to unplug, rest, see their family, or experience new places. Vacation time prevents burnout and directly correlates to better performance when employees are in the office.

Take, for example, the vacation-lite policies of the US in comparison to European countries that mandate employers offer 20-25 paid days off per year.

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According to CNBC, this pre-vacation practice leads to higher productivity, as 9 of the top 10 most productive countries are European (measured by GDP per hour worked).

2. Attract new talent

Companies looking to recruit new talent need to set themselves apart from the competition.

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A recent Jobvite report found that 71.6% of companies offer employee benefits that go beyond the basic health and financial programs.

It’s not just about compensation and the chance to work on a fun project, and new talent wants the whole package. If you want young, hungry, and talented employees, you need to give them what they want, whether comprehensive health care, wellness initiatives, or tuition reimbursement.

Research your industry to find out what other organizations are offering and design your employee benefits program to tailor to the specific needs of your target employees. Then make sure to advertise your unique employee benefits program.

3. Minimize turnover

Studies from LinkedIn have shown that, on average, Millennials work at four jobs in the decade following college. That’s more job-hopping than any prior generation.

As we enter the gig economy, where more and more workers choose to be self-employed or freelance, employee retention is an increasing struggle for companies. A distinctive employee benefits program can counteract these historically high turnover rates.

If you want your staff to stick around, ask them what they value. Give them options and choices for their benefits packages. Long-term programs like 401k matching, stock options, and transparent paths to advancement show an employee that you’re vested in their future and growth.‍

4. Create a healthy corporate culture

Dynamic employee benefits focused on the health and wellbeing of your staff will lead to better work-life balance and create an inclusive culture within your organization.‍

Research from Bersin by Deloitte shows that more than 40% of millennials will select an employer based on their health and wellness benefits.‍

Comprehensive health insurance packages, wellness programs, and paid family leave demonstrate that a company cares about employees’ lives outside the workplace. Not to mention, healthy employees take less time off, which saves companies money in the long run.

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The Society for HR Management estimates that the costs due to missed work and associated productivity equate to $1,685 per employee per year. Life happens for everyone. Offering flextime or working from home can help individuals manage their personal lives while still being productive employees.

Ready to revitalize your employee benefits package?‍

Entrepreneur and overall work-life-balance guru Richard Branson said it best,‍

“Choice empowers people to make great decisions. Flexible working gives our staff a choice. Through initiatives like working from home, unlimited leave, and wellbeing in the workplace – we treat our employees like the capable adults they are. Flexible working encourages our staff to find a better balance between their work and private lives, and they become more productive with happiness.”‍

Your turn—how can you reform your employee benefits program to engage your workforce? Comprehensive employee benefits packages will not only lead to happy, engaged workers but will help both retain and attract the best talent.

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