Adding the Right Employee Benefits

When you are looking for a competitive edge to improve recruiting and retention, it’s easy to be tempted by the latest shiny new benefits. Here are some tips for making sure your investment will have the impact you expect.

1. Shore up your core benefits first. The most valuable and impactful benefits you offer are related to health care and disability. These are core benefits that affect people’s ability to work, continue paying their bills, and avoid medical bankruptcy.

But is your healthcare pricing competitive? Is it affordable for your average worker? This may be the place to focus before anything else. Adequate healthcare coverage is a basic need for most workers, and it affects both recruiting and retention. 

Next, look at disability. What will happen to the employee if they get sick and can’t work? Who will pay their bills? This one isn’t so bright and shiny. Many young workers don’t choose it because they think they’re invincible. But not having it can hurt retention. So, if you have extra dollars to invest, consider shoring up that benefit. And regardless of any changes, we suggest putting it higher on the menu and promoting it more assertively.

Vision coverage is another good place to invest. Even a basic eye exam can help you catch other health problems. And it’s an attractive addition for potential recruits. 

2. Consider culture and demographics. If your core benefits are solid, evaluate ideas for new benefits based on your current workforce demographics and those of the population you want to recruit. Be sure to line up any new benefits offerings with their needs. 

For example, a student loan repayment plan might be valuable if you employ or are recruiting a lot of recent college grads. But for others who are interested in continued education opportunities, tuition reimbursement may hold more value for both the individual and the organization. 

Don’t just guess what benefits your employees want. We strongly advise that you ask current employees what they want. We know it can feel risky. What if they ask for something you can’t provide? We take the position that employees are mature enough to understand they can sometimes have a voice but not always a vote. Just be sure to explain—both up-front and when reporting on the results—that you will listen to all the input but will have to make decisions based on the practicality and cost of potential options. 

3. Look at the most popular voluntary benefits. Identity theft and legal insurance are two very popular voluntary benefits. Both are relatively inexpensive and give employees peace of mind about any potential personal risks they face. If a large percentage of your employees have pets, you might consider pet insurance. Accident and critical illness insurance also can be valuable and help shore up your core benefits. 

4. Beware of offering too many options. One of the biggest mistakes companies make is adding too many voluntary benefits. What they don’t realize is that having a multitude of options can give employees decision fatigue. When employees can’t process and understand all the options, they may shut down and choose none. 

Again, this is where knowing your demographics and asking your employees for input can help you determine which benefits they’ll value most. 

5. Remember: Benefits aren’t everything. Even the best set of employee benefits can’t overcome a weak or demeaning culture. The No. 1 factor that makes employees stay is validation of who they are and the value they add. Think of your employees as customers, too, and make sure you’re meeting these needs. Take a look at how your managers are leading, and evaluate how well they’re recognizing their employees and reinforcing their value. Manager training may be in order.