How Voluntary Benefits Lower Turnover Costs

How Voluntary Benefits Lower Turnover Costs

The big takeaway for employers that offer a package of voluntary benefits is employee satisfaction. Satisfied employees do not quit. Having a rich array of choices is one way to keep those valued employees from leaving for greener pastures.

The cost associated with voluntary benefits is the time an employer allows the employee to meet with a Benefits Consultant.  There are no fees or monetary costs to offer voluntary benefits.

Research by the Society for Human Resource Management suggests that the cost of replacing an employee can be as high as 60 percent of the employee’s salary. Total costs, including lost productivity and engagement among remaining staff, can send the cost of losing a good employee as high as 200 percent of salary.

These estimates do not include the intangible costs to a workplace when a good person leaves, such as the blow to morale among the remaining staff.  The long trajectory to get a new employee up to speed while co-workers pick up the slack and patiently train the new hire.

SHRM’s 2017 benefits survey found that one-third of employers had increased their menu of benefits over the past year, and the reason why was clear: “Recruiting difficulty has continued to increase over the last five years, and competition for talent is high. To attract and retain top talent, organizations must leverage the benefits package they offer to their employees.”

A 2017 study by the Kaiser Family Foundation found that among small firms offering health benefits:

  • 67 percent of firms offer dental insurance;
  • 47 percent offer vision care insurance;
  • 23 percent offer critical illness insurance;
  • 16 percent offer hospital indemnity insurance;
  • 16 percent offer long-term care insurance.

The data showed that small companies are actually more generous than all companies combined. Among all firms offering these supplemental benefits in the survey, small companies have the same rate of dental coverage (67 percent) and a higher rate for vision coverage (54 percent).