"Economic instability has led both employers and employees to tighten their belts — and ask a lot of their workplace benefits in the process." – Brian McDonald, Morgan Stanley
A competitive salary is no longer the clincher when attracting top talent. Increasingly, workplace benefits, including fringe benefits like financial wellness programs, additional healthcare benefits, and lifestyle or other wellness programs, may determine whether an organization will attract or retain staff.
Fortune 500 company recruiters know this. Review a sample job advert; the benefits packages and perks section is usually well-detailed. That said, what makes workplace benefits important? And why are employee benefits packages significant in talent retention and attraction?
This article will give us an insight into employee benefits, their importance, and implications on employees and employers by sharing some workplace benefits statistics.
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Current employers have a lot on their plate regarding employee satisfaction. Job seekers nowadays will always opt to work in an environment that is best for them, and most will prioritize working in a place with a proper benefits program.
So, what is the importance of employee benefits?
We will look closer and provide some employee benefits statistics for context.
Employee benefits can be a way for a company to retain staff members and employees. A study reported that about 70% of employees will continue with their employer because of their benefits package. Also, about 80% would prefer getting better benefits to higher pay.
Therefore, companies that offer a robust benefits package can retain employees and be sure their employees will reciprocate the good faith by performing to a higher level.
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A benefits package can include a wide range of things: health insurance, mental health benefits, disability insurance, benefits management assistance, healthcare spending plans, and paid parental leave, among others.
This is one of the most common benefits packages companies or organizations offer. Especially in the U.S., healthcare is a priority for employees and plays a massive part in employee retention. employers. About 80% of employers believe they are responsible for the health and well-being of their workforce.
Over 50% of employees will accept a new role if the company offers a comprehensive benefits package that includes health insurance and mental health resources. This value has increased by about 20% since the beginning of the COVID-19 pandemic.
Mental health is another aspect that's been rising, especially with Millenials and Gen Z generations.
Mental health is part of the benefits packages nowadays, and many people are considering it a priority, too.
About 65% of employees believe their current employers are responsible for providing mental health benefits as part of a standard healthcare package. However, about 40% of employees reported that they have not been provided with mental health support resources.
Nowadays, employees recognize the need to talk about their mental health. A study found that about 50% of employees feel comfortable discussing their mental health, a slight improvement over the years, but 27% are still hesitant.
The good thing is top executives are beginning to prioritize employee wellbeing and understand the importance of a positive work environment. CEOs champion improving mental health resources, and about 60% are comfortable talking about their mental health.
It may come as a surprise, but some young employees consider flexibility the most crucial benefit, higher than healthcare coverage or other comprehensive benefits packages.
Remote working or hybrid work models have started becoming a new norm, especially since the beginning of the COVID-19 pandemic. Flexibility has become a crucial benefit for employees, and employers are obliging by providing flexible working hours and locations.
We can break it down into numbers:
About 20% of employees reported that they are willing to take up a job if it offers remote working and flexible working hours. Additionally, 13% of the employees will accept a job if their employer values the importance of a work-life balance.
A study found that more than half of employees, about 60%, would be loyal to their current employer if they were offered flexible hours. As for new hires, 25% may quit the job altogether if there is limited flexibility to work remotely.
Millennials, Gen Z, and all other generations represented in the workforce are driving the trend of job flexibility with technology. Young workers tend to be tech-savvy and want a higher job satisfaction rate.
Local government workers desire retirement benefits at the end of their tenure, and the same goes for all other employees who sign up for retirement plans. According to a study by Forbes, 34% of employees believe that a retirement plan is one of the most essential benefits packages.
The private industry often provides employees with options for retirement, but it depends on employees to take them up on the offer. About 70% of private industries have offered employees retirement plans, with about 50% participating.
For government institutions, 92% of employees have access to retirement plans, with 82% choosing to participate.
Joining an organization for retirement plans is essential to 47% of employees, while 60% consider it necessary for employee retention.
Employees who participate in retirement savings want financial security after they retire, but not all of them know how to calculate how much to save. A financial wellness program benefits employees, and about 75% are willing to find out how to achieve financial wellness by participating in these programs.
Taking some time off might be a way for an employee to work on their personal life, handle a personal emergency, or take a vacation. Some employees would like to be compensated during the period, hence a paid vacation or a paid leave. Many companies are on board with these employee benefits trends and are willing to offer paid time off.
A study by The Conference Board in 2022 found out that about 84% of companies have policies like parental leave and paid time off. These employee benefit trends improved 19% from the previous year, with about 40% approving the vital benefit.
However, not everyone has the privilege of paid time. A Forbes study found that about 28 million American workers do not get paid leave or vacation.
American workers are allotted an average of 10 paid vacation days per year. New parents can get about 8 weeks of paid parental leave.
Not everyone cashes in on their vacation days, and some employees continue to work during their vacation period. About 765 million days have gone unused by American workers, and about 52% have reported for work during their vacation period.
Certain benefits are not big priority for employees, and many employers are not inclined to offer them in their benefit packages. Offering benefits that do not directly impact employees depends on the company's policies.
Childcare benefits, gym memberships, pet insurance, and senior citizen benefits are some lifestyle benefits, sometimes called wellness benefits, that can be offered.
Lifestyle benefits may not all be monetary. Some employees want a culture where employers consider a work-life balance and provide room for professional development. 58% of employees are satisfied with the growth opportunities, but 33% believe they have few defined growth paths.
Knowing there is a clear trajectory for professional growth – and the resources to achieve this – can impact job satisfaction in significant ways for employees. Moreover, it can also positively influence employee engagement and increase employee satisfaction.
Some company benefits, such as family perks, are limited. A study showed that 46% of companies offer senior citizen benefits while about 43% offer child care benefits. However, some policies strictly provide one family benefit, and the choice depends on what the employee prioritizes.
Employers are willing to support their employees by providing employee benefits, but they may not have the necessary resources to go through with it. About 80% of employers would offer childcare benefits if they received government support.
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A significant increase in employee benefits and pay can be a determining factor for seeking another job or staying with a company. A 2022 Gallup study states that 64% of employees attributed more pay as a factor when choosing a job.
Employees will always prefer a company with a competitive benefits plan. 69% of employees have cited an increase from 60% from the previous year (2022). They want to cushion themselves better during tough economic times and plan for the future.
Financial well-being is something everyone is looking for, and as an employee, any financial stress will affect your overall output. A Morgan Stanley study found that over half of employees believe financial pressure affects overall job satisfaction.
Sufficient financial benefits can lead to the retention of a productive workforce. About 90% of employees believe their company loyalty status would be higher if provided with benefits that cater to their needs.
Workers' compensation is always a touchy aspect; every employee wants to feel valued and appreciated. A good way to address this is with equity in compensation, a driving benefit for an employee's long-term financial goals.
Compensation equity can affect various factors, including talent retention and motivation.
Inequitable compensation is a detriment to retaining staff members and employees. About 70% of companies have stated that equity in compensation has motivated more talent to their ranks, and about 80% believe that having an employee benefits plan will keep them engaged and motivated to work.
However, when it comes to employee benefits, it's not all smooth sailing. Employees have realized the need for benefits, and more are requesting it, but some companies are cutting back to avoid recession.
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Creating a good working place entails balancing many dynamics, including attempting to understand what employees want. As a leader, placing yourself in your employee's shoes helps to put things in a better perspective. For example, making each employee feel valued is a good starting place.
You will learn the ropes of becoming an authentic leader through our coaching. This will enable you to understand how to approach each worker's needs and improve the odds of retaining talented employees while boosting productivity.
Reach out today, and let's explore how we can cooperate.
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