Have you ever wondered if employee benefits are worth the cost and extra administrative tasks? Hint: They are. Find out the importance of employee benefits, and how offering benefits can better your business, too.
Why are employee benefits important?
How important are benefits to employees? Well, 79% of employees would rather have new or additional benefits instead of a pay increase. Good wages are important, but so are good benefits. Benefits aren’t just desirable to employees. They can improve your business. Adding benefits can increase loyalty, focus and productivity, attendance, and recruiting.
When you offer employee benefits, your employees are more likely to be loyal to your business. According to one survey, 60% of employees said having a benefits package is extremely or very important to their employer loyalty.
Employees want the ability to pick and choose their benefits to match their lifestyles. A survey shows that 72% of employees said that the ability to customize benefits increases their loyalty. Offering a limited set of benefits doesn’t let employees pick what works for them.
When employees are more loyal, they are more likely to continue working for you. Starting a benefits program or adding to your current one can convince employees to stay. Actually, 36% of employees say improving their benefits package is one thing their employers can do to keep them in their jobs.
Increased focus and productivity
A lack of benefits can impact your employees’ abilities to focus and be productive at work. How? Well, employees might be worried about things in their personal lives, such as childcare, illnesses, and finances. If employees are worried about these things, they aren’t focused on work.
The numbers back this up. A survey found that 23% of employees are less productive when at work because of financial worries. The same survey showed that 58% of employees have lost sleep due to worrying about adequate childcare. Sleepy, worried employees lack focus at work.
You can offer benefits that will help employees relieve their stress. When employees have the ability to take care of issues beyond work, they can be more present at work. Of surveyed employees, 51% agreed that benefits impact their ability to focus at work. And, an additional 51% agreed that benefits impact their productivity at work.
Your employees are more likely to show up to work when they have benefits.
Three major reasons for absenteeism in the workplace are finances, family commitments, and health issues.
Your employees might need to run financial errands. Offering benefits can reduce the number of financial errands employees must make. A survey found that 43% of employees agree that benefits impact their number of work absences due to such errands.
Seventy-four percent of employees have missed opportunities at work due to family commitments. Benefits, such as flexible work arrangements, can reduce the amount of work employees miss for family matters.
Employees are less likely to miss work for health reasons when they have health benefits. Employees who are satisfied with their benefits are less likely to avoid going to the doctor and are less likely to put off a medical procedure.
By providing benefits, you improve your ability to attract candidates and hire new employees.
You might think a large paycheck is what attracts employees. But benefits are equally as important as wages. A survey found that 55% of employees are at least somewhat likely to accept a job with slightly lower pay if it has better benefits. And, employees are more likely to accept a job offer if they have health and wellbeing benefits (61%) and flextime benefits (75%).
What benefits are of greatest value to employees?
There are many benefits you can choose to offer employees. Your options can be overwhelming. Start by focusing on common employee benefits.
Employees think the following common benefits are extremely important:
- Health insurance (64%)
- Retirement savings plan (45%)
- Dental or vision insurance (37%)
- Life insurance (26%)
- Traditional pension or defined benefit plan (25%)
- Retiree health insurance (21%)
- Disability insurance (21%)
- Other health-related insurance (17%)
- Long-term care insurance (15%)
Aren’t benefits expensive?
As a small business owner, providing benefits to employees might not seem affordable.
You can start by offering low-cost employee benefits. Some benefits are even free to offer, including flextime and casual dress.
Employees are also willing to spend more to get the benefits they want. Fifty-two percent of employees are prepared to pay more for the cost of benefits if the benefits meet their needs. And, 77% of employees are at least somewhat likely to purchase voluntary insurance if offered the benefit. If you set up the benefit, your employees might be willing to pay for all or part of it.
If your employees have to contribute wages toward a benefit, you have to deduct wages. Online payroll software can help you make deductions from each employee’s pay. Try Patriot’s accurate payroll software for free.