Employee retention is on the mind of many business owners, companies, and human resources departments.
Employee retention is a concern to human resources (HR) leaders. In fact, “87% of HR leaders consider improved retention a critical or high priority for the next five years.1
In 2019, what working people desired in the workplace began changing.2 In addition to traditional employee benefits, the onset of the pandemic accelerated these desires: remote working, a better work/lifestyle balance, and better pay.
As people become dissatisfied with their current jobs, the “great resignation” of 2021 was one of the highest points in history where people left jobs and moved on to new opportunities.3
In 2021, more than 47 million American workers resigned, according to data from the US Bureau of Labor Statistics. Today, the monthly average is 3.8 million people (July 2023 statistics).4
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It costs an employer up to 33% of an employee’s annual salary to replace them.
Job security is still one of the top reasons employees stay in a company.
Job security is still a major anchor for retention. People want a stable company with a history of few or no layoffs. Competitive pay though is important, and many employees would switch jobs for a mere 5% pay increase.5
Highly engaged employees are 40% less likely to be looking for a job compared to actively disengaged employees.6
The reasons people today will change jobs
Willis Towers Watson, a recognized company and leader in hiring trends and employers, investigated why people leave.7
The top three reasons:
- Poor onboarding experiences where employees are not given clear expectations and do not feel included
- Low recognition of valued employees
- Poor managers
It costs an employer up to 33% of an employee’s annual salary to replace them.8 This does not include the time lost training a new person to backfill the position. For some positions this could run an employer $60,000 to $200,000. The better trained the employee is, the harder it is to fill the position. Costs rise accordingly.
Where do benefits fit into employee retention?
Benefits are still important to employees. These include major health coverage, paid PTO and sick time, and retirement defined contribution plans such as a 401k.
Some employers provide supplemental insurance plans such as accident, cancer, critical illness, supplemental hospitalization insurances, and life insurance as added incentive/benefits.
Supplemental insurance, such as cancer or critical illness insurance, usually includes a lump sum payment for the diagnosis of the medical illness the policy covers. This money can be used for out-of-pocket medical bills and help with extra expenses incurred.
For a small investment, employers can leverage the importance of coverage protection in times of financial need.
Working with a reputable supplemental insurance company is an excellent way to educate people about protecting their families and themselves when the unexpected happens.
The wonderful benefit of providing employer-paid supplemental insurance, or employer-offered supplemental insurance for individuals under a group plan, is it costs little and gives a lot. Supplemental insurance is a benefit many organizations can use.
Current factors contributing to employee retention may change. Treating people right and helping to provide a form of financial protection during a medical difficulty or death is a form of action which may help stack those numbers favorably for a company and its employees.
Speak with a licensed agent or broker on ways you can help improve employee benefits for future recruits.
Sources:
- Engagement report, https://www.ukg.com/resources/analyst-report/future-employee-engagement-2022-23 , accessed 2023.
- Great Resignation, https://www.bls.gov/opub/mlr/2022/article/the-great-resignation-in-perspective.htm, accessed 2023.
- Paychex,https://www.paychex.com/articles/human-resources/employee-retention-what-makes-employees-stay-leave,accessed 2023.
- US Bureau of Statistics, https://www.bls.gov/news.release/jolts.t04.htm, accessed 2023.
- Blog, https://www.apollotechnical.com/employee-retention, September 2023.
- Bonusly, https://go.bonus.ly/2020-employee-engagement-and-modern-workplace-report, accessed 2023.
- Wayne Towers Watson,https://www.wtwco.com/en-us/insights/2023/07/5-trends-of-2023-how-are-they-tracking-since-early-this-year, accessed 2023.
- Bamboo HR, https://www.bamboohr.com/blog/cost-of-onboarding-calculator, accessed 2023.
Other Sources:
SHRM, https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/benefits-to-improve-employee-retention.aspx, accessed 2023
News ASE, https://www.aseonline.org/News/EverythingPeople-This-Week/hrs-role-is-reducing-employee-burnout-and-improving-retention, accessed 2023.
Author: By the Globe Life Staff
Globe Life articles are researched, written, and edited by multiple members of the Globe Life staff including, Marketing Specialists, Content Writers, Product Experts, as well as Legal & Compliance Professionals.