In the short run, it might seem more profitable to cut costs by being frugal with employee benefits—skip health insurance, limit vacation as much as possible, and minimize perks. The quality of your workers is in the “soft” numbers, rather than the “hard” numbers (e.g. net profit and cost of labor), and often those soft numbers—like employee loyalty—might not seem quite as important.
Although it’s hard to quantify in numbers, psychologists have done studies showing a connection between employee loyalty and success of an organization, according to the Journal of Human Resource Management. As a small business owner, this might hit home even harder, since you probably know all your employees by name. You know what your employees want and need, and you don’t want to see your quality workers leave your business. So how should you go about increasing employee retention?
By working for you, your employees are sort of investing in the business that you created. They are analyzing spreadsheets, serving customers, designing graphics, working cash registers, and optimizing websites. In other words, they’re making your business better and helping it stay afloat. But employee loyalty should be matched with employer appreciation—if you refuse to offer any benefits, your employees may be forced to take jobs elsewhere that offer the benefits they need. In addition to decreased employee loyalty, you may find that a lack of benefits also makes it harder to hire quality workers.
Glassdoor’s employment confidence survey of 2015 found that an impressive 79% of employees preferred new or additional benefits in place of a pay raise. Health insurance was at the top of the list with 40% of participants saying that they preferred a health package over a pay increase. Some other benefits included vacation and paid time off, paid sick days, and retirement plans. Offering some of these benefits could potentially increase employee retention, without your having to increase pay for each employee.
Getting a good benefits package to offer your employees has a lot to do with research and comparison of what plans are out there. For health and dental insurance, you can use an online broker like eHealth to look at plans from a variety of companies and see which group plans suit the needs of your business best. By looking through all of your options instead of looking at what just one insurance company offer has for group plans, you could save money and get the best group plan for your small business to increase employee loyalty.
Read more about some of the most sought-after benefits with this article about small business benefits packages. You can use this information to learn about some of the most valued benefits you can offer to increase employee loyalty.
Although increasing employee retention is important, and will probably save you costs of hiring and training new people, loyalty goes beyond that—it’s a mindset. Having true loyalty within a company is going to come from building a culture of trust and support for your employees. If they feel like they can’t trust in the company they work for, even if they stick with it, you might not see the same amount of motivation in the work they do for you. So visit eHealth.com and start exploring your options for building up a comprehensive benefits package to offer your employees.