Employee Benefits: Their role in a tight labor market.

Long before I started Workplace Benefits Solutions I remember having a conversation with my Dad about the employee benefits he offer his 25 employees.  He was a reluctant buyer and I remember him telling me to the cent how much this added to his hourly labor costs.  I haven’t forgotten that conversation, but there were a few things that Dad didn’t consider about his benefits package.

These are a few things that need to be considered:

1.     Talent attraction/ retention

There was a time before ACA, which I believed benefits really didn’t help with retention or at least it was overstated.  Now in a tight labor market your benefit package can attract new employees. But, on the other side competitors are good employees and a strong benefits package offering can make a difference.

2.     Employee can be proactive about their health

Productivity is a big deal!  The most valuable ability of an employee is availability.

3.     Employee Satisfaction

Not all benefit packages are the same.  I had one person tell their HR Director… “Now I finally have benefits that are actual a benefit for my family.”  That is a satisfied employee!

4.     Benefits are an effective use of resources

Research says it costs an average of 25% of person’s salary to replace them. So, to replace a $40,000 employee is about $10,000 in training, loss of productivity and the down time while finding their replacement.  If you look at the costs of a good benefits package it is not close to $10,000. 

5.     Having a long-term strategy.

Be strategic when buying benefits, but not stingy.  Work with a broker who tries to maximize your dollars. A benefit plan that is too skinny can cost in the other areas we discussed.  WBS helps our clients have a rolling 3-5 year strategy. 

If you want our help let us know.  helpwithmybenefits.com