When a company’s finances turn bad or at least look a little shaky, what is the first expenditure to go on the chopping block?
More often than not, it’s employee benefits and perks.
After all, the financial Scrooges might say, there’s no direct ROI from them.
“The employees will be happy to still be employed and paid, and that’s enough,” they might say.
Some companies don’t even need a financially rocky period to get greedy with benefits. They just operate lean, offer the basics, and consider that to be good enough.
For some companies, that is good enough. People want to get paid, and if they find their work meaningful and fulfilling, they may not need excellent benefits. Give ‘em health insurance and watch ‘em go, so to speak.
And it is difficult to prove an ROI behind employee benefits, which makes them easier to cut, or not invest anything toward at all.
You can prove an ROI behind benefits, though. It just takes a little bit of effort and a clear idea of what you want to accomplish with those benefits.
Here are ten ways employee benefits are directly contributing to your company’s bottom line, backed by data from industry research.
(Looking for more industry research on employee perks and benefits? Look no further.)
Employee benefit satisfaction correlates with employee satisfaction.
96% of employees who are satisfied with their benefits are satisfied with their jobs (Aflac)
Simply stated, satisfied employees take care of customers, who in turn become satisfied.
On a deeper level, employee benefits and perks show a certain degree of stability behind a company. Struggling companies cut benefits, after all, while high-growth, energetic companies invest as much in their employees as they do in new business.
- $11 billion is lost annually due to employee turnover (Bloomberg BNA)
(That number, whose source link is unfound, seems dramatically low.)
Employee perks add a boost to the happiness of your already-happy employees.
72% of small-business employees say an improvement in their benefits offerings would make them even happier (Aflac)
Employee satisfaction isn’t an eternal quality. It must be constantly earned and requires a lot of effort on the employer’s behalf. In many cases, your happiest employees can become your most disengaged if they feel let down or betrayed.
But you can’t just keep giving big raises to everyone, right?
Throwing in quality perks and benefits is a great way to show ongoing investment in your employees. Change them up and always keep them fresh, and employees are less likely to feel like their company is stagnating or degrading.
Employee benefits can make or break a decision to join your company.
78% said that the employee benefits package is very or extremely important in their decision to accept or reject a job (EBRI)
You already know that recruiting and hiring is become a growing issue. Job growth is outpacing talent and unemployment is low.
It’s a buyer’s market in hiring, and a salary bump alone may not be enough. People are looking for lifestyle enhancements - the type of bonuses only offered through perks and benefits.
Here’s an example:
- 63% of Millennials say they're more likely to join a company that offers the option to telecommute (along with 57% of GenX, 41% of Boomers) (CompTIA)
Employee benefits are directly connected to ongoing employee engagement.
54% of employees choose "benefits and paid time off" as what drives engagement most (Namely)
Speaking of time off, that’s one benefit that’s not only crucial to employee engagement, it’s important for their overall well-being also.
- 95% of senior business leaders recognize the importance of using time off (US Travel Association)
With employee engagement, there’s as much to be lost as there is to be gained:
- Disengaged employees cost organizations between $450 and $550 billion annually (The Engagement Institute)
Benefits are highly important to younger workers.
87% of employees from Generation X and Generation Y feel their current benefits package is not sufficiently flexible to meet their personal and financial needs (Barclays)
Need that stat phrased differently?
- 94% of Millennials, 92% of Gen X say nontraditional benefits make employers more attractive (ICIMS)
Or since we’re talking ROI, consider the cost:
- Millennial turnover costs the U.S. economy $30.5 billion annually (Gallup)
Employee benefits improve the health and wellbeing of employees.
66% of companies see an ROI on their health and performance initiatives; 35% report improved productivity and 34% cite improved morale (Hub International)
Healthy employees cost less, produce more, and are happier. But you can’t really make your employees get healthier, right?
Benefits, from health insurance to gym memberships to personal trainers to healthy snacks and beyond, are your best bet to directly influence the health and wellbeing of your workforce. The ROI on even the slightest improvement could result in thousands of dollars in gained productivity and lower costs.
It isn’t just about physical fitness either.
- Depression and anxiety lead to 15 billion lost days of work every year, at an estimated annual cost of US $1.15 trillion (World Health Organization)
Benefits give your employees a reason to recommend your business to their friends.
65% of employees are more likely to recommend their employer as a good place to work because of the benefits offered (Lodestar)
Most workplaces really aren’t all that different. Benefits and perks are clear differentiators, however. Want to get people bragging to their friends about what a cool job they have? Invest in employee perks.
Good benefits help retain employees.
Of the 79% of employees who have no intention to change jobs, 54% cite liking the people they work with, 50% cite good work/life balance, and 49% cite good benefits as reasons for staying (CareerBuilder)
This stat is a great microcosm of why people stay in a job. It isn’t salary.
They want good managers and coworkers, personal time, and benefits that help them live a good life.
As health benefits get more important (and more expensive), benefits are going to become a bigger factor in retention. People won’t want to jump away from a job with good health insurance, even for more salary.
Specific Benefits for Specific Purposes
These are big, high-level, overarching stats. If you want to really get in the weeds, drill down into how people feel about specific benefits and perks, like flexible working, paid time off, and educational reimbursement.
The point is benefits are designed to solve problems and make life easier for the people you want to hire, engage, and keep.
Benefits Have a Clear ROI
It’s clear there’s an obvious ROI on a well-designed benefits package. The problem is the return isn’t communicated clearly to executive decision makers. To many of them, everything beyond health insurance is extraneous.
Now, to be fair, some of it is. Not every benefit is going to have a return. Some aren’t worth investing in, with others are worth every penny.
The key for benefits pros is knowing what you need a benefit to accomplish and finding a way to measure it.
Be ready to go to bat for your benefits. They’re worth it because your employees are worth it.
Need help making the case for a new benefit with your executives? We’ve got your back.