November 27, 2014

How Do Your Employee Benefits Stack Up?

employee benefit

Are you worried about retaining your key employees as the economy heats up? Or do you need to attract new workers to help with growing demand for your product or service, or to expand your business? In either case, employee benefits are an important factor in whether employees choose to join your company, stay with your business for the long haul or jump ship.

How do you know if your employee benefits measure up?

SHRM’s 2013 Employee Benefits research report can offer some insights. While the majority of companies responding to the survey had over 100 employees, some 22 percent were small businesses. Below is a look at the basic benefits most companies were offering, plus some “extras” that could give you an edge.

So How Do Your Employee Benefits Compare?

Health and wellness

The basics: Health insurance is an important benefit for employees, and it’s offered by almost every business. The most common health benefit was prescription drug coverage, offered by 98 percent of companies. Ninety-six percent provide dental insurance, and 86 percent offer PPO healthcare coverage, while 33 percent provide an HMO plan.

Pump it up: Preventive or wellness programs have been on the rise over the last five years, SHRM notes. These offerings, which can help cut health-care costs, can range from bonuses or incentives for reaching health goals (such as quitting smoking) to wellness coaching or subsidized gym membership. About two-thirds of companies offer some type of wellness program.

Retirement savings and planning

The basics: Retirement is another big issue on employees’ minds as they struggle to recover from the recession. Employer-sponsored retirement plans are shifting toward defined contribution retirement savings plans and 401(k) savings plans. Nearly all (92 percent) of employers offer a defined-contribution retirement savings plan, and 73 percent provide an employer match to employees’ contributions.

Pump it up: More companies are offering investment assistance, from online advice (59 percent) to one-on-one investment advice (53 percent) and specific retirement-preparation advice.

Financial and compensation benefits

The basics: Incentive bonus plans are offered by 55 percent of companies

Pump it up: Employee referral bonuses, for referring a job candidate who is hired and passes the probationary period, have gained in popularity over the last year and are now offered by 47 percent of companies.

Flexible work

The basics: The majority (53 percent) of companies offer some form of flextime. Fifty-one percent allow flextime during core business hours, while 26 percent offer it outside of core business hours. Even more popular is telecommuting, which 58 percent of companies offer in some form, whether ad-hoc (45 percent), part-time (36 percent) or full-time (20 percent)

Pump it up:  Over one-third (35 percent) of companies offer compressed workweeks, where full-time employees can work longer days for part of a week or pay period in exchange for shorter days or a day off during that week or pay period.

Career development

The basics: Nearly all (90 percent) companies provide professional memberships, 85 percent provide off-site professional development opportunities and 78 percent pay for certification fees.

Pump it up: Just 44 percent of companies offer cross-training in skills not directly related to the job, and a mere 20 percent offer mentorship.

Three Steps to Get the Most From Them

Whatever employee benefits you offer, SHRM’s report recommends three steps to getting the most from them as a recruitment and retention tool:

Develop a Workplace Flexibility Policy

Past SHRM research shows flexibility is a very low-cost way to drive increased employee job satisfaction, lower turnover and lower insurance costs.

Communicate

SHRM studies show employees consistently rank benefits among the top contributors to their job satisfaction, but many employees don’t fully understand all of their benefits, their value and their options.

Make sure you communicate, through meetings, workshops and other means, about the worth of what you’re giving employees and how they can maximize their benefits’ value. Toot your own horn.

Get Feedback

Review your benefits at least once a year to make sure they’re still competitive with other businesses, that their costs are in line, and—most of all—that they’re serving employees’ needs.

Getting employee feedback is an important part of this assessment.

Stack Photo via Shutterstock

5 Comments ▼

Rieva Lesonsky


Rieva Lesonsky Rieva Lesonsky is a staff writer for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow her on Google+ and visit her blog, SmallBizDaily, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

5 Reactions

  1. I was surprised that 96% offered dental. It seems high to me.

    However, I’m a big fan of flextime and it’s good to see that more and more companies are offering it. Actually, I think that four 10-hour days is a very good setup that more people could benefit from.

  2. Employee benefits are largely an artifact of the Industrial Age and need to go away. The Factory System worked hard to create an environment of dependency where they could turn adults back into children and make them feel like they couldn’t get along without the company. Benefits are one of those devices to make people think they’re actually getting a better deal than they are.

    My next book, “Why Employees Are ALWAYS a Bad Idea”, http://chuckb.me/xfK – exposes why so many of our present-day business practices are broken because they were put in place in the late 1800s to benefit a few giant Industrialists, not the people who were employed. We share stories of companies in every industry and with five to 10,000 staff that have no HR department, no written policies, no office hours (including large manufacturing companies), no titles, no promotions, and in many cases, no benefits packages.

    Our own company, Crankset Group, offers no 401k, no vacation time or sick time, no annual bonuses (another dependency device), no office hours, no titles or promotions ever, and no managers – everybody is self-managed. Everyone is treated like an owner (owners don’t have any of these formalized benefits) and like a self-managed adult – they are Stakeholders, not employees.

    As the Industrial Age fades behind us and we enter the Participation Age, this is the future of business, to build companies where people Make Meaning, not just money. Large companies will struggle the most with this because their systems are designed to keep they money, but create the illusion that they are going the extra mile to help employees. Benefits packages are one way they do this. If they just payed people more and let them self-manage their benefits, they would lose the perception that the employee needs them.

    In the coming years it won’t be about benefits packages, but about whether your work allows you to be a self-managed adult and Make Meaning with their work. Those companies focused on benefits packages will struggle to get there.

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