Any Human Resources manager could give you their own horror story from The Great Resignation. Even writing those words makes me shudder. More and more employees are leaving their jobs in droves. Job loyalty is slowly becoming a thing of the past. It makes you stop and think: why is all of this happening?
It’s a great question, and it’s one that Payday HCM has been asked by multiple companies. While there will always be a number of factors for employees seeking new opportunities, one thing stands out: benefits. Oftentimes, we find that companies coming to us with this question seeking our services usually share a common solution. And that solution is benefits.
In this article, we’ll look at the top five benefits that employees look for. These benefits include:
- Employer-sponsored health insurance
- Life Insurance
- Paid time-off
- Mental health services
- Flexible work environment
We’ll go in-depth with these benefits and determine where your benefits package might be lacking. By the end of this article, you’ll have potential candidates throwing themselves at you.
#1: Employer-Sponsored Health Insurance
With around 86% of private sector employees working for companies that offer health insurance, according to the United States Census Bureau, it’s clear that this benefit is the most important and most sought after. It’s crucial to ensure you know what makes a good employer-sponsored health insurance plan from a bad one.
What is Employer-Sponsored Health Insurance?
Employer-sponsored health insurance, or group health insurance, can take two forms: an insured or a self-funded plan. An insured plan involves an employer purchasing a health insurance policy from a licensed health insurer. A self-funded plan means an employer would cover the costs of an employee’s healthcare with the company’s assets.
From here, you can start examining the differences between open or closed provider networks as well as small and large group markets. With provider networks, it’s important to consider your company's specific needs to decide whether you choose something like a health maintenance organization (HMO) or a preferred provider organization (PPO).
Am I Required to Offer Health Insurance?
The answer to whether your business is required to offer health insurance largely depends on the size of your business. According to the Internal Revenue Service, the Affordable Care Act requires all applicable large employers (ALEs) to offer minimal essential coverage that is both “affordable” and provides “minimum value” to its employees.
An ALE is defined as any business with 50 full-time employees. “Affordable” means an employee’s required contribution is no more than 9.5% of their income, while “minimum value” means a plan must cover 60% of the total allowed cost that might be incurred under the plan.
Employers must also provide employees with a form explaining what their health benefits plan covers and how much it costs.
For smaller businesses, the ACA doesn’t list any requirements for offering health insurance. The ACA does provide small businesses with the Small Business Health Options Program (SHOP) for those looking to add health insurance to their benefits plan.
#2: Life Insurance as an Employee Benefit
Life insurance is another common but important benefit to offer. Offering life insurance to your employees is a great way to let them know you care about them and those close to them.
Types of Life Insurance Policies
Life insurance offered by an employer, referred to as group life insurance, can come in many different forms. These include:
- Fixed multiple-of-earnings
- Variable multiple-of-earnings
- Flat-dollar-amount
- Variable-dollar-amount
A fixed multiple-of-earnings plan links your amount of protection to a multiple of your annual salary. A variable multiple-of-earnings plan is similar, but the multiple is dependent on certain thresholds of income.
A flat-dollar-amount plan involves, well, a flat-dollar-amount that is the same for all employees. A variable-dollar-amount plan is similar to a flat-dollar-amount plan, but the amount can vary between employees depending on earnings and time spent with the company.
How Much Does Group Life Insurance Cost?
One of the big advantages in offering group life insurance is its relatively low cost, both for you and your employees. According to New York Life Insurance, coverage for about 20 employees with an age range from 25-45 would cost an employer about $160 a month.
The cost is even lower for the employees. According to Forbes Advisor, the amount an employee pays for life insurance at companies like Walmart or Amazon ranges anywhere from $2.95 bi-weekly (Walmart) to $5.90 monthly (Amazon).
This incredibly low cost of entry means that life insurance is an excellent benefit to offer. It will increase your viability to potential employees while barely impacting your bottom line.
#3: Paid Time-Off (PTO)
Paid time-off is another benefit that employees look for most when thinking about applying for a job or accepting a job offer. A solid PTO policy can help you stand out in a crowded field.
What is PTO?
Luckily, the name paid time-off is relatively explanatory: it’s paid time-off. Employees can accrue a certain amount of PTO per pay period and redeem it in exchange for time off while receiving their regular pay.
PTO can include several different things, like paid sick leave, paid bereavement leave, or paid holidays. While typical practice used to involve specifying types of leave when employees request time off, most modern PTO policies operate simply as just PTO with no further specification. Essentially, if an employee is being paid while taking time off, it’s PTO.
How Do I Structure a PTO Policy?
Perhaps more important than simply offering PTO is structuring a PTO policy that benefits current and potential employees. The United States Chamber of Commerce highlights several methods for offering PTO, with the three most common being banked, earned, and unlimited.
With a banked PTO policy, employees are allocated a set number of paid days off that they can take at their leisure. The “bank” is depleted as more time off is used and refreshes with the start of the year.
As the name implies, an earned PTO policy allows employees to earn a certain number of paid time off hours per pay period. This type of policy still functions on a set number of hours however: 64 hours of PTO paid out over the course of a year, for example.
An unlimited PTO policy is still a relatively new concept, but it is certainly one that’s highly sought after. An unlimited PTO policy allows employees to take as much time off as they like. Typically, the only requirements are adequate advance notice of any absences and manager approval. If you really want to stay ahead of the competition, unlimited PTO is certainly the way to go.
#4: Mental Health Services
Mental health in the workplace has been one of the most important topics within HR departments for years now. Letting current and potential employees know that your company values their mental health is vital to securing and retaining top talent.
Types of Mental Health Services
There are a few different methods for offering mental health support within your company’s benefits package. Some of these methods include:
- Insurance coverage for mental health services
- Employee assistance programs
- Employee wellness programs
While offering one of these benefits is a good start, incorporating all three is an even better way of demonstrating to prospective employees that you care.
How Do I Include Mental Health Services in My Benefits Package?
Offering mental health services in your benefits package can take many forms. For counseling and psychiatric services coverage, you can look at whether the offered group health insurance plan includes this kind of coverage or offer it as a separate benefit through a third party.
An employee assistance program can also take several different forms, including in-house, outsourced, blended, or peer-based. To maximize that potential, it’s important to ask which of these would be the best fit for your organization.
#5: Flexible Work Environment
I’m sorry, but hybrid and work-from-home options aren’t going anywhere. The COVID-19 pandemic has changed the way not only employers think about work, but also prospective employees. It’s important your benefits package reflects this new way of thinking.
Offering Hybrid and Remote Work
A survey performed by USA Today found that not only do 58% of white-collar workers prefer to work remotely three days a week but that 42% of office workers would be willing to take a 10% pay cut just to have the option. Clearly, this is something that people are looking for.
Luckily, many of the kinks that initially made remote work somewhat frustrating have been worked out. An endless number of platforms—from Zoom to Teams to Slack—have streamlined the process of working remotely. Now, it’s really in the employers' hands to give their employees the option.
Does Remote Work Harm Productivity?
This is still the most significant question regarding remote work. Now, we have the data to truly set it to rest. The short answer is no: remote work does not harm productivity. In fact, in most cases, it helps it.
According to a study conducted by Owl Labs, 83% of workers who work remotely say they have the same or higher level of productivity. Another study done by Upwork found a 70% reduction in nonessential meetings with remote work. Clearly, productivity is not suffering in remote environments, and your employees will appreciate the freedom to work how they want to.
Better Benefits for Better Hiring
A comprehensive benefits package is essential for companies looking to attract and retain top talent. The Great Resignation has emphasized the need for employers to re-evaluate their benefits offerings, as employees increasingly prioritize things like mental health, well-being, and work-life balance.
The benefits outlined in this article can be a strong foundation for companies to build upon, ensuring their employees feel valued and supported. It all starts with taking that first step, though. Learn more about how Payday HCM can help you create a competitive and attractive benefits package.
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