This article was originally published in 2016. Some rules, rates or tools mentioned may have changed since — contact us for current guidance.
Every company wants to hire the best talent possible for what they are willing to pay. And when it comes to employee compensation, it must not only attract talent but also retain talent. Attracting and hiring top talent is ineffective unless you can are able to keep them around.
For this reason, whether your HR is in-house or outsourced, an effective benefits package is essential to retention. In addition, preparing customized benefits packages demonstrates the value the company places on the individual employee.
We all know that the bottom line is important, but there are other essential elements to a great benefits package, such as employee development and room for advancement. You want to keep your employees satisfied and engaged - once an employee begins to look elsewhere, it is very difficult to get them back to their original level of dedication.
Failure to take retention efforts into consideration while preparing employee benefits packages can have 4 major effects on your company:
- Reduced morale It only takes one bad seed to spoil the whole bunch. Everyone has worked with “that guy” who is constantly grumpy. By maintaining high employee compensation, you can prevent spoiling the morale of your whole company.
- Loss of priority When an employee loses interest, they also lose the sense of priority that comes from a dedicated employee. This means an increase in procrastination, mistakes and follow-through.
- Lack of productivity Employees with low productivity will cost you more in the long run, so maintain employees who feel appreciated and enjoy their job. Providing quality benefits, even the occasional free lunch, can help keep employees engaged.
- Sudden departure Employees who leave suddenly can also cost your company a lot of money, and stress! If you are able to maintain mutual respect between employees and your company, employees will be less likely to jump ship without notice.
A great benefits package must contain reasons, other than salary amount, that would greatly reduce the likelihood of an employee to "see what else is out there." When a benefits package contains both quantitative and qualitative components, employees are much less likely to look elsewhere.
For more information about benefits and payroll, please contact us.
