Reducing Turnover with Better Benefits
Employee turnover is a costly problem and that cost is on the rise. Currently turnover costs $600 billion annually, but by 2020 that figure will balloon to $680 billion. What’s behind this rising business cost and what can businesses do to prevent it?
The Strength of the Jobs Market is a Factor
The jobs market is stronger than it has been in 50 years. Unemployment is at 3.7%, wages are up 3.1% since last year, and this summer the economy added 224,000 jobs in one month alone. This means there are more than enough jobs to go around for everyone who wants them, which gives people the option to move up and out of dead-end jobs, low-paying jobs, and high-stress jobs. At the same time the jobs market is growing stronger, the cost of living is quickly outpacing any wage growth that is happening. This puts people in the precarious position of having to look for higher paying work out of necessity, whether they dislike their current jobs or not.
Understanding that the economy is both strong in jobs and weak in the standard of living simultaneously can help you to understand how to tackle this problem of employee turnover. For some people, just offering more money or better benefits will be the thing that keeps them around. For others that aren’t feeling the effects of the skyrocketing cost of living, offering perks like remote work, free snacks and drinks, and more vacation might be enough to keep them around.
Understanding What Benefits People Want
First off, there is a difference between benefits and perks. Benefits are things that are part of an employee’s compensation package, such as insurances of various types, retirement, training, etc. Perks are things that are available to everyone, such as free snacks and coffee, game tables, and free lunch on Fridays.
Companies that offer a 6 benefit plan decrease their turnover by 138%, while the average turnover rate for organizations with no benefits is 157%. 70% of workers want more than just health insurance in their benefits package—they want things like retirement plans, wellness programs, and a better company culture. And 32% say that learning opportunities are not just benefits, they are actually crucial to keeping the workplace current and workers satisfied.
Is your company ready to tackle costly turnover? Learn more about reducing turnover at your company from the infographic below!
Please include attribution to https://www.paycor.com with this graphic.