One of the age-old debates in the corporate world is whether companies should invest in benefits, or if they should take the cost of doing that and invest it into better salaries for the team. That topic is still in debate because there isn’t a universal solution for it — which option is better depends on the size and realities of the company.
That said, it is important to note that offering a good benefits package can benefit not only employees but also the company as a whole. Here’s how that works.
1 – Benefits and the hiring process
The first thing to consider is just how good a generous benefits package looks on a job offer. Knowing that a company offers everything from health coverage to dental care and even a life insurance policy can be comforting for a potential employee. That’s because it shows that the company is not only willing to allocate funds towards the well-being of its staff, but also that they went through the trouble of checking an insurance price comparison site and dealing with all the paperwork and red tape involved in setting all of this up.
That’s an encouraging sign for potential employees, especially if it’s coming from a small company. And it could allow you to consistently hire high-demand individuals even when competing offers proposed bigger salaries.
2 – Benefits and employee retention
Another advantage of a good benefits package is that it encourages workers to stick with your company. Any company that hopes to poach one of your employees to offer a similar benefits package, or they have to offer enough money to offset not only the costs of getting those benefits in individual packages but also the inconvenience involved in doing so.
All of these factors make it so that employees are much more likely to stick with your company. And speak positively about it when asked. However, it’s important to keep in mind that employees value some benefits more than others. When asked about in surveys, employees often rank health benefits and extra vacation days as the two benefits they prefer the most.
3 – Benefits and productivity
A good corporate benefits package may allow employees to not only be covered in several situations but also help them get better quality of service than they otherwise use. This means that if you get a good corporate healthcare plan, for example, you can make it so that your workers can get medical attention faster and easier than they would otherwise.
This helps keep your employees healthy and productive. And it encourages them to keep up with regular checkups through the corporate plan, which is a potentially life-saving exercise.
4 – Benefits and morale
It is comforting to know your company has your back, and that’s a feeling that can be instilled by a good benefits package. Every time an employee gets help through the corporate dental plan, or a family gets a payout through the corporate life insurance, it all helps reinforce to the employees that they are valued. That they work in a company that looks out for them.
Something to keep in mind is what a negative impact the lack of certain benefits can have on worker morale. A worker who was already unhappy may quickly find themselves looking for a company with a better benefits package if they end up having to burn through their savings to deal with dental issues.
5 – Benefits and saving money
Hiring a new employee can be quite costly, with costs ranging from $1000 to $5000 depending on the industry and the circumstances. Since benefits help improve employee retention, the cost of providing benefits to employees should be measured against how expensive it would be to replace them. After all, the figure above is just the cost of conducting a selection process, it doesn’t factor in the money lost due to the productivity dip that may occur until an employee who left is properly replaced.