Getting a clear sense of exactly which employees are key to the success of a business and what motivates those employees is crucial to designing the right benefits to attract and retain such people.
Keeping key employees loyal is essential to a successful business, and business owners know it. But they don’t always know the benefits that can help ensure that loyalty.
Those are takeaways from the 2018 Small Business Owners Perspective study by MassMutual. According to the study, 79 percent of business owners think frequently about retaining key employees. However, one in three do not provide their key employees any additional benefits above and beyond what they already offer all employees. There are tangible steps owners can take to make sure those employees generating the most revenue, driving change, or providing institutional memory remain loyal.
“Employee benefits are much more than just providing group medical insurance,” says Mark Kennedy, CEO of Benefit Concepts Inc., which has offices in Houston and San Antonio, Texas. Kennedy says benefits employers can offer include:
- flexible work schedule
- letting key employees earn the right to work from home
- earning additional compensation based on rewards
- additional days off
- deferred compensation
- additional key person insurance
- provide various disability coverages
Such benefits, Kennedy says, can have a big impact on how employees feel about their jobs.
“At minimum, I think a benefits package is worth at least $10,000 a year to an employee,” he says. “It’s called the hidden paycheck.”
Teresa Hassara, head of workplace solutions at MassMutual, says benefits such as disability and accident or critical illness insurance can help retain key employees. “Those are the types of solutions that help those individuals protect their family in the case of a significant negative event in their life. And voluntary benefits allow a business owner to offer a flexible benefits package with little or no cost.”
But, she adds, getting a clear sense of exactly which employees are key to the success of a business and what motivates those employees is crucial to designing the right benefits to attract and retain such people. Business owners should ask themselves this question: If you were to leave your current business to start a new business, who would you take with you? Those are your key employees and should be taken care of.
“Understanding who those people are, what motivates and excites them about their role, why they’re with your company, what their value set is, what their challenges are, I think is particularly important,” Hassara says. “Do you know what they really care about and what motivates them?”
She says solid survey data about those questions, along with how they feel about such issues as compensation and the firm overall, is a good place to start to design the right package to retain key employees. In the absence of that data, Hassara suggests gathering it through focus groups.
In addition to getting to know one’s own employees, business owners should know what competitors are offering.
“Organizations typically have a handful of companies that they lose talent to,” Hassara says. “How does your array of benefits stack up to the folks you lose your talent to?”
Without the right information, she adds, a business owner can offer all sorts of benefits that don’t make a difference. “You can spend a lot of money on things that aren’t valuable,” she says.
One major concern cuts across companies and addressing it could put a business on firm footing for attracting and retaining key employees. There is a near-universal concern among American workers about their finances. That concern goes beyond the size of their paycheck and can cut into productivity.
“A lot of American workers spend time at work worrying about their financial well-being,” Hassara says. “To the degree you can help those employees develop a roadmap to secure their financial well-being and it’s robust and to some degree unique … that can be a powerful retention strategy.”
Such a roadmap goes beyond offering a 401(k) that includes an employer match of contributions. It would include education-and-advice programs available to help employees build financial literacy.
“Most people come out of high school and college with relatively little understanding of how to create a retirement plan, how to manage or think about the different benefit structures and how to make the tradeoff between one type of benefit vs. the other,” says Hassara.
According to MassMutual’s 2017 Small Business Employee Financial Wellness study, 40% of employers state they do not offer their employees a financial education program because they’ve never asked for it. But actions speak louder than words. The same study reports that one in three business owners have taken loans against their retirement plans and one in four have stopped making contributions.
“It’s building confidence and capability at the same time,” says Hassara. “It really helps create that roadmap. Most people think about it like, ‘What did I do last year and what can I afford this year? And what changes happened in my plan?’ But they’re not thinking longer term.”
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This article was published on Bizjournals.com/.
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By Kent Bernhard · September 11, 2018