Why Employee Benefits is Key for Small Businesses
Small companies recognise the importance of employee benefits. Why? Employee benefits are crucial for attracting and retaining top quality talent. Besides that, employee benefits play an important function in boosting company morale, reducing turnover rates and ensuring the long-term success of the business. Here are four reasons why employee benefits is key for small businesses.
Attract and Retain Talent
Salary is no longer the only factor that employees look for when choosing their employer. Having conducted a survey among Small and Medium-sized Enterprises (SMEs) in Singapore, we understand the challenges of providing competitive employee health benefits - low economies of scale and high cost. An interesting finding in our survey was that even though larger companies generally do provide employee benefits while smaller companies do not, larger companies may not necessarily provide better benefits that employees want. As such, providing attractive employee benefits that employees want can help smaller companies differentiate themselves from the rest and level the playing field when matched against big companies.
Employee benefits also help to retain quality talent. Based on a well-being survey conducted by Cigna in 2017, 66% of those surveyed indicated that it is important or very important for their current employer to have a workplace wellness program in place and 59% said it would impact their decision on whether to leave the company. This shows a good wellness programme plays a large role when it comes to retaining employees. Of course, factoring in the demographics of the company: Millennials and Generation Ys value these programs more than Boomers.
Rising healthcare cost in excess of general inflation rates and low pay increases are increasingly taking a toll on employees. A 2017 survey by Willis Towers Watson found that financial worries constitute a significant source of stress for many employees. Feeling stressed out about their medical bills, employees may underperform even when they return to work. This could potentially lead to recurrent episodes of absenteeism due to sickness, affecting employee morale. Given the nature of small businesses to have smaller and leaner teams, an affected employee is likely to affect the overall company’s morale and in turn the overall business.
Impact on Employee Turnover Rates
Providing employee health benefits is an indication of your organisation’s commitment to your employees in the long haul. World Health Organisation has detailed how showing your care for your employee’s physical well-being and dedication to provide in this aspect can potentially contribute to reduced employee turnover rates. Employees will see that maximising profit is not the only priority of the organisation, but that they matter too. Furthermore, by retaining existing talents, companies also reduce the cost and time needed to train new employees.
Long-term Performance and Organisational Success
Employees are their most important resource for any company. Safeguarding the health of your employees will lead to a happier and more productive workforce. By offering employee health benefits, there is a greater likelihood that employees will go for regular health screenings and take preventive care measures which would reduce the number of sick day leaves and improve productivity. Although providing employee benefits may incur a higher cost initially, the long-term benefits can greatly outweigh the costs and contribute significantly to your company’s overall success.
Now that you have understood the importance of employee health benefits, you may be asking "So, exactly how do I do it?". Fret not - all the answers to your questions are here.