Modern-day working cultures have changed significantly over the last few years. Since the pandemic, many companies have experienced an increase in turnover, particularly among their top talent. But what’s causing everyone to experience whether or not the grass is truly greener on the other side?
Several factors affect employees nowadays, but one crucial element is that they have realised their value as an important component to the business’s long-term success. Consequently, they anticipate higher compensation and better benefits packages from their employers.
The Current State of Employee Retention
In today’s modern landscape, employees are more prone to switching jobs than committing to one employer for an extended period. In addition, the digital age has expanded the scope of career choices and made switching careers a more approachable idea for many employees. Consequently, employers are encountering challenges in retaining their valuable workforce.
Recent 2023 statistics show that business have lost around $223 billion over the last five years because of culture-related employee turnover. In addition to this statistic, 66% of employees accept a job only to discover they’re a poor fit. As a result, retaining employees has become an increasingly challenging and essential aspect for employers to address.
So, why are employees leaving their jobs more freely these days? Well, there are several factors at play.
Developments in AI-driven technologies are starting to change the landscape for many industries. What used to be considered manual job functions have now started to be filled by automation services and solutions. While this development has led to more turnover in certain industries, it has also created many new job opportunities for individuals who specialise in the use of these new technologies and are able to create more efficiency and productivity within an organisation.
The job market is highly competitive now, which means employees can be pickier about the companies they work for. Also, millennials and other young generations often switch jobs to seek better salaries, benefits, and career prospects.
According to Gallup’s global indicators on employee wellbeing, “quiet quitting” employees know exactly what they change at their current place of employment. Overall, 85% of responses pointed to three main categories. – engagement (culture), pay and wellbeing.
How to Leverage Employee Benefits for Retention
Employers often face a dilemma when it comes to balancing the acquisition of new talent with retaining current employees. However, employee benefits can offer a viable solution to this challenge. By offering comprehensive benefits packages, companies can incentivise their staff to stick around and showcase their organisation’s value to top talent within the industry.
That being said, not all employers consider the importance of offering competitive benefits – especially when it comes to costs associated with having to replace an employee.
According to Society for Human Resource Management (SHRM), most businesses spend 50-70% of an employee’s earnings to hire and train an adequate replacement. So, in simpler terms, if a current staff member earns $50,000 per annum and decides to resign, the organisation would have to allocate an average budget of $25,000 to $35,000 solely for recruitment and training expenditures.
And this wouldn’t even include the value of loss of productivity from other team members due to the disruption of losing a valuable fellow employee.
Offering a good benefits package can be a cost-effective way for employers to retain employees by reducing turnover and increasing job satisfaction. Here are some helpful tips for using employee benefits to improve staff retention:
Offer Comprehensive Health Coverage
Access to quality healthcare benefits is crucial for job seekers. To ensure this, employers must offer comprehensive health plans that address the unique requirements of their workforce. Depending on the location of the employer and the type of healthcare systems available, offering coverage like medical, dental, and vision options and additional services like psychological assistance and wellness initiatives could be an attractive solution for employees.
Encouraging employees to schedule routine checkups and providing preventive care services can also significantly contribute to cultivating a healthier workforce and minimising absenteeism. AXA, for example, is a leading provider of global commercial insurance programs. The company provides its global employees with a generous preventative care package that includes annual checkups, fitness advice and counseling services.
These practical options can provide substantial financial relief to staff members, minimising their concerns about shouldering the brunt of medical costs. Even in countries with universal healthcare, wait times can be long and certain procedures might not be covered. Offering private health insurance can help ensure your employees have faster access to medical services, broader coverage, and potentially more personalised care.
Provide Opportunities for Professional Development
Training programs, workshops, mentorship programs, and continuing education are excellent avenues for professional growth that significantly benefit employees aspiring to advance in their careers. These opportunities bolster their skill sets, improve job performance, enhance career readiness, and promote investment in the company’s success.
One organisation that has mastered this concept is Amazon. Among a variety of Amazon’s employee development programs, the Amazon Technical Academy has been designed specifically to help current Amazon employees in different job categories to gain the skills they need to become Software Development Engineers (SDEs) at the company in as little as nine months.
By nurturing employee growth, a company is committed to fostering personal and professional fulfillment, building lasting loyalty in the process. By giving employees opportunities to use their new found skills on the job as well as rewarding them when they excel with a promotion or financial incentive, you can help to positively reinforce their future career development goals.
Employers can also promote continuous learning by organising team meetings, workshops, or “lunch and learn” sessions where employees can share their knowledge and learn from each other alongside formal training and educational opportunities.
Offer Flexible Work Arrangements
Achieving a healthy work-life balance is a top priority for many people today. Allowing staff to work remotely, choose flexible schedules, and participate in compressed workweeks can significantly aid them in achieving this balance. This flexibility is desirable to staff members who want to manage their work and personal lives better.
For example, employers can implement a workplace culture focused on results instead of hours worked. Companies like Microsoft, Apple, and Google have adopted this strategy and allow many of their employees to choose their own working hours as long as they complete their work on time, and are given the option to work from home or anywhere in the world.
Offering compressed workweeks is also beneficial for employees who need to take care of family obligations, allowing them to complete their weekly tasks in fewer days while still being able to spend more quality time with their families.
Affording flexibility when individuals are suffering from an illness or going through a difficult personal situation is also important. Allowing employees to take the necessary time off for their health and wellbeing can help reduce stress levels and improve job satisfaction, resulting in higher productivity and engagement once the individual returns to work.
Empowering employees with greater flexibility can help lower stress levels, reduce employee burnout, enhance job satisfaction, and cultivate a more welcoming and caring work environment accommodating diverse lifestyles and family needs.
In addition, flexible work arrangements have extra advantages for both workers and employers. These benefits include less time and money spent commuting, lower office expenses, and increased productivity because of fewer interruptions and a more pleasant work atmosphere.
CustomiSe Benefits Packages
Organisations can significantly improve employee satisfaction by offering customised benefits packages that align with individual needs and preferences. By tailoring benefits options to employee demographics like generation, industry or role, organisations can better address unique benefits requirements, leading to greater employee satisfaction.
Organisations can also offer other benefits such as tuition reimbursement, commuter assistance, gym memberships or wellness programs tailored to encourage employee productivity and engagement.
If the office is located in an urban center, organisations may want to consider offering transportation benefits such as discounted public transit passes or rideshare programs, which can save employees money and improve their commute experience. Companies could also offer additional perks such as onsite childcare, mental health counselors or pet-friendly offices for employees with families or pets.
To create benefits packages that meet the needs and priorities of employees, employers should conduct periodic surveys or feedback sessions. This feedback can be used to design benefit options that are more specific and meaningful to the workforce.
Showcase the Company’s Sustainability Efforts
Most modern-day employees are more focussed now on being part of an organisation that really values them as people, and employee wellbeing and clear work-life balance is fast-becoming the preferred format, rather than putting in excessively long hours.
Starbucks, for example, has built their foundation on human connection and cultural diversity. They actively hire individuals with disabilities, refugees, veterans, military spouses, and applicants with all types of backgrounds and work experience. What’s more is they invest in the right training and technology to ensure each of these employees has the highest chance of success within the organisation. Their business practices are also heavily driven by improving sustainability efforts around the world.
Before its 2023 Annual Meeting of Shareholders, Starbucks also announced that they are planning to invest over $50 million in water sustainability initiatives in an effort to cut its water and waste footprints in half by 2030. This will impact every one of their facilities around the world and will be a real positive step forward reducing the strain on the world’s water supply.
As an employee, being associated with a company that puts such a strong priority on positive global change is something they can be truly proud of. Beyond individual compensation, working for an organisation that gives back to the community helps employees to stay grounded in their roles, stay more productive, and actively look for new opportunities to grow with the company.
Use Employee Benefits as a Way to Retain Your Top Talent
Prioritising your employees’ physical and mental well-being is crucial for fostering a committed workforce that remains devoted to your business. Effective employee benefits can serve as a valuable means of retaining exceptional talent.
By tailoring benefits packages to suit your employees’ preferences, providing opportunities for professional development, extending flexibility with working arrangements, and involving staff with company initiatives that give back to the community, organisations can greatly improve their chances of finding and retaining top talent.
Modern-day working cultures have changed significantly over the last few years. Since the pandemic, many companies have experienced an increase in turnover, particularly among their top talent. But what’s causing everyone to experience whether or not the grass is truly greener on the other side?
Several factors affect employees nowadays, but one crucial element is that they have realised their value as an important component to the business’s long-term success. Consequently, they anticipate higher compensation and better benefits packages from their employers.
Author: Frank Mengert – Founder & CEO, EBM.
Photo credit: Andrea Piacquadio
