Beyond the Basics: Designing Employee Benefits Packages that Drive Engagement and Loyalty
Figuring out what benefits to offer your employees can sometimes feel like guesswork. Since benefits packages can be costly for employers and are usually — at a minimum — a full-year commitment, it's important that HR leaders carefully consider what benefits options might be right for their employees. Reviewing employee data and asking your employees what they want can help inform decisions about which packages to offer.
Meal delivery kits, house cleaning services, or stipends for a coworking space might be flashy and fun benefits, but how do you know if your employees truly value benefits like that? And if so, do they value those more than traditional benefits like medical coverage? The truth is there's no single answer. But the good news is that employees will likely tell you what benefits they value if you simply ask them. And that's exactly what ADP did in the 2023 Employee Benefits Survey.
We asked real employees what benefits are most important to them. The answers of over 53,000 participants from small and midsize businesses in the United States that are part of ADP's Professional Employer Organization (PEO), ADP TotalSource® provide insight into the evolving needs and desires of employees in today's workplace. The data from the survey has been broken down and summarized in a guidebook, Shifting priorities — Understanding and meeting the needs of the modern employee with the right benefits.
Why are employee benefits important?
Employee benefits are important because they can be linked to employee engagement, loyalty, productivity, and overall employee experience, all of which affect a company's bottom line. Another reason benefits are important is because they can help ensure your employees feel that their needs are being met and that they're cared for at work.
When employees' needs are understood and met it creates a win-win situation for the employees and employers. In fact, a study by MetLife showed that employees who feel cared for by their employer are 92 percent more likely to feel engaged at work, 65 percent more likely to be loyal and 56 percent more likely to be productive at work. With the positive impact as context, employers would do well not to underestimate the significance of offering benefits to their employees.
What benefits are the most important benefits to employees?
According to the ADP TotalSource employee benefits survey of over 53,000 employees, the most important benefits to employees include medical insurance, dental insurance, retirement plans and vision programs. In fact, for medical insurance alone, 78 percent of employees surveyed feel valued by their employer because they provide medical insurance. And while medical insurance is still the clear front runner, benefits that have historically not been as important are surging in popularity. For example, mental health coverage and Employee Assistance Programs (EAPs) jumped significantly in employee rankings.
What is a good benefits package?
A good benefits package is one that is customizable and allows employees to choose what's right for them. Out of the employees surveyed, over half prefer less money taken out of their paychecks for insurance costs even if it means paying more out of pocket at the time of care. One way to meet this need is by offering high deductible plans that pair well with flexible spending and health savings accounts and allowing employees to contribute money at their own pace so they can use it later to pay for out-of-pocket costs.
There is no one-size-fits-all for benefits, so providing your employees with a variety of choices is a great way to help ensure that each employee can choose what's right for them. It's also important to remember that simply guessing is not a good way to choose what to offer your employees. Real employee input is the best way to determine the right plans employers should offer.
Affordable and flexible benefits can be hard for employers to find, especially for small businesses that don't have access to large-group plan options. With the added complexity of compliance law surrounding benefits offering, outsourcing employee benefits might be the best way for your business to provide benefits that attract and retain talent while also controlling costs and streamlining administration.
The wrap-up
Even if your company recently went through its open-enrollment period, now is the best time to start thinking about the future and how you can make your benefit offerings more valuable to employees. Start by downloading the guidebook, Shifting priorities — Understanding and meeting the needs of the modern employee with the right benefits, to get more insights on the needs and preferences of today's employees.
