The Essential Role of Employee Benefits in Small Business Retention
High turnover can significantly harm a business, impacting everything from operational efficiency to company culture. As a business owner, building and retaining a loyal, productive team is more important than ever as competition for talent intensifies.
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“Are my employees satisfied?”
We would say that’s the million-dollar question, but your employees are worth much more than that. Some say that employees are the most valuable asset for a company.
We know that high turnover can significantly harm a business, impacting everything from operational efficiency to company culture. As a business owner, building and retaining a loyal, productive team is more important than ever as competition for talent intensifies.
Impact of Employee Turnover
Let’s get straight to the point. Employee turnover is expensive, especially for small businesses.
According to the Work Institute, the cost of employee turnover is estimated to be approximately 33% of employees’ base pay. In simpler terms, losing an employee means losing money. Factors that go into calculating the cost of employee turnover include loss of productivity, recruiting and hiring costs, and onboarding expenses.
For small businesses with close-knit teams, other employees may start to ‘jump ship’ if a valued team member chooses to leave. If you lose an employee who handled critical tasks within your business, you also lose important knowledge and experience— which disrupts your day-to-day operations.
Losing an employee also puts extra strain on your remaining employees—leading to increased workloads, longer hours, and heightened stress. You might also find it difficult to recruit new employees if you have a high turnover rate damaging your business’s reputation. While there are countless ways employee turnover can impact your business, there are plenty of retention opportunities for you to capitalize on. Let’s look at some of the most effective employee retention strategies for your small business.
Invest in your employees
Employee retention has evolved far beyond the simple equation of salary = loyalty. Today’s workforce, especially the younger generation, values a holistic approach to employment, one that encompasses not only financial compensation but also personal well-being and work-life balance.
According to a 2023 Workforce Trends Report, retaining talent ranks as a number one priority for employers. While increased wages and bonus programs remain key tools for retaining employees, it’s not always possible for small businesses to offer above-market salaries. So, how do you stand out among the competition and keep your employees invested?
Answer: employee benefits. And not just ordinary benefits but benefits that are personalized, flexible, and meet the needs of your valued team.
Employee retention has evolved far beyond the simple equation of salary = loyalty.
The power of benefits
Benefits hold a crucial place in not just drawing talented individuals to your company, but also in nurturing their engagement and fostering a deep sense of commitment. We understand how vital it is to ensure your team feels valued and supported.
Here’s how your benefits offering can affect whether an employee stays with your company.
Your benefits package is a statement of your company’s values and commitment to your employees’ well-being. A thoughtful benefits offering can set your small business apart, make it a more attractive place to work, and give a compelling reason for employees to stay.
Benefits Enhance Employee Well-Being
Benefits that support physical, mental, and financial health demonstrate that you care about your employees as individuals. This can include healthcare, retirement plans, mental health support, and flexible working arrangements. Employees who feel valued and supported are more likely to report higher levels of engagement, satisfaction, and motivation.
Benefits Foster a Positive Company Culture
Benefits that encourage work-life balance, such as flexible working hours, remote work options, and generous leave policies, contribute to a positive company culture. This kind of culture not only attracts employees but also makes them want to stay.
With the year 2022 being deemed the "Great Resignation,” employers are continuing to see increased rates of employee turnover. This doesn’t have to be the case for your business. By fostering a strong, positive company culture—supported by benefits—you can reduce turnover rates and build a sense of belonging among your team.
Benefits Give You a Competitive Edge
In a tight labor market, your benefits package can give you the competitive edge needed to retain your best employees. Small businesses often have the advantage of offering more personalized and flexible benefits, which can be tailored to meet the unique needs of your workforce. This level of personalization can make a significant difference in an employee’s decision to stay with your company.
Your benefits strategy
Understanding the importance of benefits in employee retention is just the first step. The next is crafting a benefits strategy that aligns with both the needs of your business and employees. Get started with the tips below.
Conduct a Needs Assessment
Engage with your employees to understand their needs and preferences. Surveys, focus groups, and one-on-one conversations can provide valuable insights.
Benchmark Against Your Industry
Research what competitors and similar-sized businesses in your industry are offering in terms of benefits. This can help you identify gaps and opportunities in your own offerings.
Offer Flexibility
Consider offering a range of benefits that cater to the different needs and life stages of your employees.
Communicate Effectively
Ensure that your employees understand the value of the benefits you offer. Regular education and communication about their benefits can enhance their perceived value.
While increased wages and bonus programs remain key tools for fighting turnover, it’s not always possible for small businesses to offer above-market salaries.
So, how do you stand out among the competition and keep your employees invested?
Answer: employee benefits.
How can Planstin help?
Personalized consultation: Our team of experts works closely with you to understand your specific business needs and employee preferences.This collaborative approach ensures that the benefits package we design together is perfectly aligned with your company's values and goals.
Streamlined administration: We take the complexity out of benefits administration. Our user-friendly platform makes managing your benefits package easy, allowing you to focus on what you do best—running your business.
Continuous support and education: Beyond the initial setup, Planstin provides ongoing support and education for both you and your employees. We ensure that your team fully understands and appreciates the value of their benefits, fostering a culture of gratitude and loyalty.
Don't let the challenge of employee retention be a stumbling block in your business's path to success. Embrace the opportunity to make a lasting impact on the lives of those who contribute to your business every day.
For a closer look at how we can help your small business create a benefits package that truly resonates with your team, click below.
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