You offer them because workplace benefits are the reason many employees stay put – in the office down the hall. Indeed, salary is an element of employee retention, but benefits often seal the deal, and you just hired the best sales manager in the Sydney metro area.
Another reason you want to deliver benefits? Cost. If you lose your top producer, your #1 business getter, or the go-to team member, you’ll spend money to fill that gap, and sometimes, a whole lot of money.
C-level managers and department heads are difficult to replace and, because you’re working with an unknown HR asset yet to prove himself, productivity drops until that new person knows the answers to help desk requests from company employees. New hires, at any level, simply aren’t as productive on Day 1 as they are on Day 1,001.
If your company is routinely replacing critical, productive human resources, your margins shrink because recruitment and training costs nibble at the bottom line. Lose a key player and it can impact your business for years.
So, you provide benefits. Vacation time. Paid holidays. Free day care. Performance bonuses. Benefits can add 20% to 30% of an employee’s salary to the expense side of the ledger. The CIO you’re paying $100,000 actually costs the company $126,000 each year when benefits are calculated.
The real cost of a new hire must include recruitment costs (interviews, in-house meetings, background checks, reference checks), lowered productivity until a new hire “knows the ropes,” and the potential of losing employee experience and judgement when key team members take new positions with the competition. You train them. Now, your competitor enjoys the benefit of your investment in an ex-employee who’s poaching your accounts.
The point is simple. It is almost always better to keep a fully productive employee in place than to find and train a replacement, and this applies across the complete employee spectrum, from factory floor employees to your new senior sales manager.
Benefits cost. In the case of the salaried department head earning $100,000, she can cost an additional $20,000 to $30,000 in benefit costs annually. If you can lower the cost of benefits without losing key team players, the company grows with a motivated staff whose true cost of employment is less than what it is now.
Earned benefits – raises, performance bonuses, internal promotions – are certainly critical to keeping the best in place – your place! But these benefits are at the high end of total benefit costs. They almost always cost your company cash.
However, you can offer benefits that not only keep talent on your team, benefits that actually grow your business at a lower cost.
For example, flexitime is a very desirable benefit. Employees have greater control over each day to accommodate real life. Now, some key employees have to be there at certain times. Some don’t. Give these employees more personal control with flexitime, allowing the employee to set his or her workplace schedule.
Same output, same number of hours worked, just not rigidly scheduled hours for employees who can perform job duties on their schedules. Cost: the cost of the time to schedule flexitime.
Tele commuting has the same impact. Employees work from home using secure computers to access company data, file reports, receive directions from managers – all while working in the spare room. This is an extremely desirable benefit that can actually boost bottom line productivity. Cost? You’re company will increase productivity. You don’t lose anything; you gain more productive hours from more productive employees who work in their slippers.
Relax the dress code to relax the back office team. A business suit is important for sales staff, but office workers will feel more comfortable in more comfortable clothes. Set the bar. No t-shirts, no flip-flops, – professional but comfortable. Cost? $0.
Casual Friday. Don’t schedule big meetings for Friday afternoon, bring in lunch for all the employees, and close up shop an hour or two earlier to end the week with a team of happy employees who recognize your appreciation in tangible ways. Also cuts down on Friday flu – call-ins who are sick. Absenteeism drops. Cost: some, but a lot less than it would cost to find a new company president. The early dismissal may result in a drop in productivity, but in fact, Friday afternoons are rarely times of high productivity. Your employees are already thinking about the weekend.
Add wellness benefits. Offer free flu shots, hearing tests, eye tests, subsidies for gym memberships, healthier snacks in the tea room. A healthy workplace team is more productive than over-caffeinated stressed-out employees running double-time just to keep ahead of the work curve. Cost: a few dollars per employee, but the return on that investment is incalculable.
Celebrate success. Hit the numbers and have a party for all employees. Hold company picnics (office talk is off limits), office parties during the holidays, beach outings during summer months. Cost: A few thousand dollars for catering, but, again, you have a happy, loyal staff.
Let employees customize their own benefits package. Your top salesperson may want more time with her family and opt for more vacation days over a better parking spot close to the front door. Some employees may want extended maternity and paternity leave over paid transit cards.
Your employees know which benefits work best for them. Let them decide which benefits are most important. Cost: $0.
One final thought. Send employees birthday cards with a thoughtful gift that shows you know each employee. Set alerts to sound when HR shows a birthday coming up. Cost: a little, but consider it an investment in maintaining the most productive team. It also provides an opportunity to treat employees like family, and frankly, you can’t put a price on that.
You don’t have to drain company resources to maintain an experienced, dedicated staff, but you do have to pay attention to their needs and create a workplace culture and atmosphere that focuses on needs of the people who add value to your company.
Respect your employees, provide the benefits they need, and they’ll stick with you as your company grows. And…
…it doesn’t cost a lot.