From the employer’s perspective, most of the recent publicity relating to offering health care benefits has been focused on the added cost and burden of providing those benefits to a firm’s employees. However, many employers and especially small businesses seem to have failed to realize that offering health care benefits is one of the most powerful attraction and retention factors in our corporate world.
It is my considered opinion that, not offering health care may turn out to be a costly business decision; since it drives away top potential applicants and results in the loss of your top lower-paid employees to other businesses that have suddenly become more attractive by offering it. A recent survey conducted by Glassdoor and Randstad reveal that salary and health care benefits are the rank highest on employee priority list.
Employers therefore cannot ignore the importance of these benefits in recruiting and retention.
Why employers should offer health care benefits
Remember that cost is only one half of the return on investment formula, so don’t forget and calculate the benefits and positive impacts. Thus it is imperative for employers especially when making hiring decisions to consider the importance of the following factors that may impact the importance of offering these benefits:
Everyone is talking about health care benefits
Workers have historically been concerned about health care benefits. When it comes to hiring packages it is one of the “most talked-about” issue. With so many employees active on social media and the Internet, it would be a huge mistake to assume that your employees won’t quickly learn which firms do and do not offer health care benefits. This may spark retention challenges for your firm.
Healthy workers are more productive
Even if you don’t care whether workers desire health care are not, with the availability of preventive health care, your workers will be absent less because of their own or their family’s health issues. Obviously, healthy workers will be more productive while on the job. Wellness programs alone have shown up to a 3 to 1 return on investment.
Employee recruitment and retention will be more difficult
Firms that offer health care will make it a prominent selling point in their posted jobs and in their recruitment advertising, you will find that many “in-demand” workers will never even consider applying to your firm. You may still be able to fill your jobs, but the quality of your applicants will go down significantly. Corporate employee retention research suggest that employee retention rate positively correlated to packages like overtime allowance and health care benefits. Thus, failure to offer health care benefits will become a major retention issue among your lower-paid staff. Recruiting and retaining managers may also become more difficult because it will be more difficult for them to attract and retain top staff when other similar jobs at close by firms are offering health benefits to their employees.
Health care matters to employees with families
If your top workers have families, the importance of health care benefits may actually exceed the importance of whatever you pay. If you hire from certain diverse ethnic or religious groups, statistically there is a higher chance that your employees will have larger families, so the impact in these cases will be greater.
Final thoughts
Many of the arguments that I hear about employers having to offer health care benefits are short-sighted. Some of these negative positions are focused exclusively on the cost side of the equation. A smarter approach is to instead work with HR and the CFO to calculate the direct economic benefits that come from the resulting increase in productivity, lower absenteeism, and longer retention and dramatically improved recruiting. After making this calculation, you will invariably learn what every Fortune 500 firm has known for decades.
And that is the many benefits of health care and wellness offerings by far exceed any potential costs!
Check out “The employers duty of care“
