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Help employers save money by retaining employees

By: Mike Dahlinger, Regional Sales Director, Michigan

Employee turnover is a serious issue for many companies. The costs for replacing an employee can be shockingly high; for highly-specialized employees, some estimates place the cost as high as 400% of the employee’s annual salary.1 That figure may come down for less specialized and lower-level positions, but the costs remain significant; on average, it’s estimated that companies spend over $4,000 to replace an employee.2 

In addition to the costs of replacing an employee, a surprising number of employees are either changing jobs or looking to change jobs. A new study found that 27% of employees change jobs each year. On top of that, 17 percent are actively job hunting and 46 percent are passively looking.3 Offering voluntary benefits can help in a number of ways to boost employee retention and reduce the corresponding cost of employee turnover.

Employees want voluntary protection

The direct effect of offering voluntary is the improvement to protection for employees. The ability for employees to protect themselves from the out-of-pocket costs that come with their medical plan is, more and more, an essential part of a benefits package. Trustmark’s research has found that 60 percent of employees would be less likely to stay with their employer if they stopped offering voluntary.4 Benefits are a crucial part of an employee’s compensation package and a well-rounded offering that includes voluntary will help to retain employees.

Communication reinforces loyalty

A company may offer a wide variety of benefits and perks to employees, but if they’re not fully educated on those benefits, employers aren’t maximizing their value. Enrollment in voluntary benefits opens the door to added-value communication to educate employees on their benefits as well as other important perks such as retirement planning, wellness programs or total compensation statements. Engaging with employees to make sure they understand and appreciate what they’re offered helps keep them onboard at the company. Employees who are very satisfied with their benefits are three times as likely to be very loyal to their employer.5

Attracting young talent

Voluntary can also be used as a tool to attract and retain talent, especially younger demographics who have a long career ahead of them; 62% of employees under age 50 would not take a job if voluntary benefits were not offered.4 On top of that, 35 percent of millennials turned down job offers due to inadequate benefits, so a well-rounded benefits package that includes voluntary will be a key part of attracting and retaining this demographic.6

Costs are high for replacing employees, but brokers can help cut into these costs by encouraging employers to offer voluntary benefits. It’s a win for the employees who will enjoy the customization and added protection of voluntary and a win for the employer who will be able to retain employees and save on the costs of turnover.

1 “The Real Cost of Employee Turnover”. Standard For Success. 2014.
2 Human Capital Benchmarking Report. SHRM. 2016.
3 “27% of workers change jobs each year with a me-focused mindset”. 2017.
4 Trustmark Independent Employer Survey Conducted by The Connell Group. April, 2015.
5 2014 Employee Benefit Trends Study. MetLife. 2014.
6 “Anthem: 35% of millennials turned down job offers due to inadequate benefits”. 2017.

Posted on June 16, 2017