Attracting and retaining employees is becoming a very common problem for many businesses. So much so, that about a month ago we wrote about hiring and retention trends in 2014. But why and how should you invest in employee retention? This article provides a closer look.
Why the Issue of Employee Retention is on the Rise
With the economy improving, financial pressures are easing for many, and job growth is beginning to rise. This means that more employers are getting back into a stable position to search for and hire qualified talent. Employers, large and small, are now beginning to find themselves in a position to fill the once vacant positions that the economy rendered obsolete, and in doing so, creating a much more competitive labor market.
What does this mean for small businesses? They need a strategy for retaining their talent.
According to a recent survey conducted by Monster, in the last six months 82% of workers claim to have updated their resumes. In addition, 56 - 60% of workers report they are actively in the market for a new job. These numbers can be scary depending on which side of the coin you are on, and according to Bloomberg, this phenomenon has no near ending in sight.
Larger Businesses Stand to Benefit from a Competitive Labor Market
For large businesses this is mostly great. They can afford to lose a few employees here and there. They are also the ones with the resources to lure the qualified and attractive talent towards their businesses, whether it be with compensation, benefits, or perks such as free lunch or dry cleaning. The bottom line is, if anyone is to benefit from a more competitive labor market, it is the larger companies.
Small businesses face more challenges. They cannot afford to lose a few employees, or in many cases, even one. In many cases, small businesses do not have the resources to lure in the types of talent they need. In the best scenarios, they may be able to offer a lucrative title, or small performance-based bonuses, but simply do not have the financial freedom to offer the compensation or benefits that the larger companies can.
Tying Health Benefits to the Retention of Employees
So where does health insurance tie in? Out of this large number of workers searching for new employment, and out of this large number of companies searching for new employees, health benefits play a foundational role.
According to a recent Wall Street Journal article, offering competitive benefits, such as some type of health insurance, is one of the best things a business can do to retain it’s employees, and attract them. But how can the average small business afford health insurance when the costs are quickly rising to historical rates?
Many businesses are asking themselves this same question. That’s why only one quarter of employers are positive that company-sponsored health plans will even exist 10 years from now. Much of this shift comes from the confidence that new health insurance options such as private exchanges and defined contribution can relieve businesses from their duties of managing and providing health insurance and simply offering assistance in choosing a health plan. Many companies are doing something similar to this now, such as Target for their part-time employees. Others are taking a “pure” defined contribution approach with a Healthcare Reimbursement Plan.
There are many considerations to make when planning an employee retention strategy and there isn’t any one correct way to go about doing this. But, incorporating a health benefits strategy that offers options to employees in regards to health insurance, is one of the most important considerations. Employees care about and value health benefits. And, if your employees can’t stay healthy, guarding your employee from other companies will be the least of your worries.
What other employee retention tips or facts do you have?