No doubt most companies are still trying to feel their way through the new health insurance requirements mandated by the Affordable Care Act. Not only must companies make sure their policies meet the new requirements, they must also balance the increased cost of healthcare with the cost of providing other benefits. And, according to a new survey by the Society for Human Resource Management, it is those other benefits that are getting cut. While this may not bode well for employees, employers who continue to offer benefits may, well, benefit in recruiting and retaining talent.
Benefits can play a large role in retaining current employees and driving feelings of loyalty to the company. Surveys repeatedly say that over 50 percent of employees—even higher for young workers—place a high value on benefits.
This may not be news, either to us or to the company leaders having to crunch budget figures trying to make sure the numbers work, but the trouble is that leaders don’t seem to be able to make the numbers work without getting out the knife.
From the SHRM study, released in late June: “The need to maintain key benefits in areas where costs are rising rapidly may mean fewer resources are left available to invest in other kinds of benefits that are less in demand. This need to counterbalance may be the main reason the latest findings demonstrated an increase in the percentages of organizations offering several types of health care and wellness benefits, yet a decrease in many other categories of employee benefits.”
Cuts being made to secondary benefits
And what is it that is being cut? It seems, at least from the study, to be those bonus benefits that companies had been offering, the benefits outside of the traditional retirement services and healthcare plans.
Again, from the study: “Between 2010 and 2014, fewer organizations offered dependent care flexible spending accounts, undergraduate educational assistance, incentive bonus plans for executives, and 529 plans. Between 2013 and 2014, there was a decline in the percentage of organizations offering graduate education assistance.
“In fact, the only financial benefit that increased was the use of spot bonuses/awards. The decline in the percentage of organizations offering educational assistance benefits comes just when many organizations are reporting increased difficulty in finding jobseekers with the educational qualifications needed for many high-skilled jobs. The decline in educational benefits offerings could lead to future skills shortages.”
Could bringing back these benefits aid recruitment and increase retention?
If cutting benefits is the least common denominator for companies these days, then standing out requires an investment of a little something extra—in this case, an investment in benefit, in your people—whether that is through flexible spending accounts, educational assistance, or more.
Will there be an immediate return on investment in the form of new talent coming in or a long-term payout in the form of employee loyalty? That remains to be seen, but it certainly would not hurt a company’s chances at becoming and remaining an employer of choice.