Benefits Play a Critical Role in Employee Satisfaction & Retention

July 20, 2016 mokeefe

Beyond salary, employee benefits remain the most significant factor contributing to employee satisfaction and retention. In today's thriving job market, successful companies are trying to offer creative and unique employee benefits to attract talent. Tuition reimbursement, gym memberships, flexible work hours, free meals, etc., are all becoming increasingly popular job perks. Three core benefits (health insurance, retirement plans and vacation) increase employee satisfaction the most, according to a research study.The implications of this study are critical for businesses looking to maintain their trajectory of growth and success.

Health Insurance
It comes as no surprise that health and wellbeing are immediate and ever-present employee concerns. Good individual and family healthcare remains the benefit that most significantly drives employee contentment. According to the study's finding, "The factor with the single biggest impact on employee satisfaction was the quality of employer-provided health insurance plans. Increasing employee satisfaction with their health insurance by 1 star (out of 5) on Glassdoor is associated with a 0.34-star increase in average satisfaction with an employee’s overall benefits package—a statistically significant link." Employers should seek to provide comprehensive healthcare packages (ideally with plan options, e.g. HMOs, PPOs, HSAs) that accommodate the varied needs of both current and potential employees, and should make sure to communicate the exact terms of coverage, the inclusion of dental and/or vision insurance, etc. A good healthcare plan ensures peace of mind for employees which is invaluable for increasing satisfaction and retention.

Retirement Plans
When considering the correlation between benefits offered and employee satisfaction, retirement plans are second only to health insurance plans. Employees are much more likely to stay long-term at places of employment that offer them stability later in life. Similar to offering desirable health insurance plans, employers should provide competitive retirement plans
in line with the needs of the employee constituency, and should clearly communicate the options and terms of coverage. Employer matching of employee contributions (up to a certain percent) is a particularly good way boost employee satisfaction and morale.

Vacation and Paid Time Off
According to the study, vacation and paid time off is, collectively, the only other employee benefit that is statistically significant to overall satisfaction, and at a much lower corollary than healthcare and a slightly lower corollary than retirement plans. In today's "always on" culture--very much facilitated by technology and remote work, it is clear why time off (especially of the paid variety) is essential for employee well-being, especially those with familial schedules to contend with as well. Particularly in intensive job environments requiring significant take-home work, it behooves employers to offer generous paid time off with options (the ability to cash out or roll over vacation time, for instance, is an attractive job perk). Preventing employee burnout is one of the best ways to prevent attrition and promote company growth.

Miscellaneous Benefits
Other benefits cited in the study that influenced employee satisfaction were employee discounts and maternity/paternity leave––but at strikingly lower rates. Employee discounts (of varying magnitudes) are so widely given that they are often simply expected, and are still considered relatively negligible compared to bigger ticket perks like healthcare and retirement plans. Paid maternity and paternity leave, on the other hand (specifically paid), are still fairly uncommon in the United States and therefore fewer employees have had the chance to reflect upon and weigh in on their satisfaction with the offering. That said, the demand for maternity and paternity leave is increasing, and thus offering these benefits could potentially give your business a competitive edge and significantly increase employee satisfaction if your staff includes a number of current or potential parents.

For employers, another interesting finding of the survey was that 4 in 5 employees prefer an increase in benefits and other perks to a pay raise.

A critical part of the CPS process in interviewing candidates is to understand benefits offered by a candidate’s current employer to help you be more competitive. Let CPS, Inc. partner with you in your search for ideal candidates that will best serve your business long-term.