Want to Seriously Up Employee Retention? Try Offering Benefits
Once you build a talented team, your job isn’t over. Your next task is to keep those folks feeling good so they can stick with you for the long haul.
And one thing is ultra clear: Employee benefits are a major ingredient in that feel-good elixir. Even if offering health coverage seems like a reach, many small companies find creative ways to implement them because they know how powerful a plastic little insurance card can be.
Plus, employees really want them. Like, really want them. Ask.com found that six out of 10 of employees would rather get sent to jail for the night than forgo health insurance — no passing Go, and no collecting $200. In this piece, learn how to use benefits to keep your team loyal, happy, and in it to win it.
Motivate your team by getting compensation right
First, let’s open the glove compartment and rummage through the essentials — getting paid. Before you begin thinking about benefits, it’s important to make sure your team is earning a meaningful compensation for the work they do.
According to Ben McAvoy of Insectek Pest Solutions, paying people a fair wage is the first thing to master because it kicks off a “virtuous cycle.” This cycle makes hiring easier, and in turn, it inspires his team to give their customers a red-carpet experience. And Ben knows a thing or two about acing those areas — his company is currently the top-rated Yelp business in the city of Phoenix. Allen Rodriguez from ONE400 agrees with Ben and believes that owners should take a more long-term approach to setting a salary — one that should evolve depending on how the business is doing. “The more you earn, the more your team should earn,” he says. “You’ll find that you’ll get back every penny and then some.”
However, paying people is not the only rabbit to pull out of your hat. Glassdoor’s Employment Confidence Survey found that four out of five employees would be more stoked about getting benefits over an increase in pay, especially people who are 44 and younger.
Do big things with benefits — even if you’re small
How To Lower The Cost of Employee TurnoverTeam Management
There is a library of studies that extol the power of benefits. Gallup found that people who are healthy and emotionally attached to their workplace are 59 percent less likely to look for a job with another company in the next year. Towers Watson also zeroed in on the connection between retention and loyalty, and found that nearly half of employees say benefits are an important reason they decided to stay with their current company.
Sounds great and all, but why is health insurance still a behemoth for many small businesses to wrap their heads around? Well, because it’s seen as complicated and pricey. Tom Hand, a Florida small business owner, reiterates that feeling. “I understand it’s hard… I know it’s expensive,” he says. However, he goes on to stress the importance of getting over that hump because of how crucial it is. “Because one stay at a hospital if your employee doesn’t have health care, or even if they do have something like Obamacare, can wipe them out.” To add insult to injury, it also makes people less likely to be powerhouses at work, leading to stress, burnout, and absenteeism. “The short-term, long-term, life insurance policy, dental … God knows, if you have a headache from a toothache — it’s the worst thing in the world.”
Dave Hickman, owner of creative construction company, Jeebs & Zuzu, doesn’t shy away from the realities Tom expressed. However, you have to prioritize what’s important. “From the onset, we always knew we wouldn’t be able to pay super high wages. But we’ve been pretty aware that we wanted to make it a place where employees wanted to be versus where they have to be.” That’s why Dave offers his team full medical and dental benefits, along with other extras like bonuses and a structured learning program. “We’re here to take care of people, internally and externally — not just make a profit.”
Can’t afford much? Here’s how three small businesses approach benefits
If you’re still tiny, there are a grab bag of ways you can think about offering benefits.
- Lay down the basics
- Give the team options
- Use your team’s needs to influence the total package
- Think of other ways to enhance what you offer (through bonuses, training, and other perks)
- Talk to other companies who have gone through it
To start, it’s key to roll out the essentials like medical (with a low deductible), vision, dental, and PTO. Then, as you can, mix in more benefits that align with both your values and the needs of your team.
Taylor Easterwood of Nashville-based Fat Bottom Brewing, says that when they launched benefits, the owner told the team he decided to take the plunge because it was “the right thing to do.” The package they offer is based on what they can afford — covering half the monthly premium and 100% for dental and vision. They also wanted to make sure it gave the team enough options to choose from. “We wanted to offer a variety for employees, a PPO plan, and also an HSA plan for people who are younger and want more flexibility,” says Taylor. “The response to that has been awesome, and it made hiring really attractive.”
Paws and Stripes, an Albuquerque-based nonprofit that connects veterans with service dogs, also offers what they can afford, and what most people on the team can use. The organization provides major medical, dental, and vision benefits to full-timers, along with a paid parental leave program. They also reshaped their PTO policy to fit the needs of the part-timers who have been on staff for at least a year.
“It’s so important to invest in people who support you during the hard days and laugh with you during the good days,” says Lindsey Stanek, owner and CEO. “That’s how we’re able to do better for the people we serve. We just take care of each other.”