Your employee benefits could make or break your business in the coming years.
As the labor force increasingly shrinks due to shifting demographics, good talent is becoming harder to find. That means employers need to be both generous and highly strategic when it comes to assembling benefits packages that can attract and retain their target audiences.
“The post-and-pray method of identifying highly qualified candidates is not nearly as effective as it’s been in the past,” notes Steve Margalit on FPCNational.com. “Companies are only as good as the people they employ, the team they assemble, the creative thinkers and innovators they hire. Your ultimate goal is to retain your key team members, and make your company attractive to the best of the best in the industry.”
As such, failing to choose and provide a host of valuable employee benefits could not only keep you from hiring the best possible talent, but could produce a domino effect in terms of opportunity costs you may not have considered. Opportunity costs are defined as the loss of potential gain from other alternatives when one alternative is chosen.
Some possible business consequences of offering inadequate benefits:
- You may have to lower your hiring standards. That means working around the capabilities of the people you can find, or spending more time and money to train less-experienced, less-skilled and/or less-polished people. “The vast majority of younger workers expect their employers to train them and help them improve their skills on the job,” notes Jingcong Zhao on Payscale.com.
- Instead of working at full productivity and taking pride in their work, existing workers could become overworked and stressed. Ironically, that could end up boosting your healthcare insurance costs. “Unmanageable workloads can result in an increase in employee stress, blood pressure and cardiovascular disease, family instability and workplace accidents,” notes Doug White in Entrepreneur.com. “Studies seem to agree that overwork causes diminishing returns.”
- Your company reputation could suffer as turnover rises and dissatisfied employees share negative perceptions with employees, friends, family members and/or online review sites. You could also lose institutional knowledge with the departure of long-term employees.
- Your HR costs could rise as higher-level recruitment becomes necessary. Focusing on recruitment may keep HR personnel from spending time on other important HR functions, forcing you to expand that department.
- Onboarding of new and less-than-ideal employees may become complex and time-consuming. “Usually, someone starting a new position would be new to the company, but not the job,” notes Kimberly Adams on Marketplace.org. “Now, businesses might hire someone who’s worked with a related or corollary skill (but needs time to learn new ones).”
- Your overtime wages may become astronomical.
- Your insurance costs may rise. “With employers taking on more risk in the form of unskilled, untrained or improperly trained employees or operating with staffing shortages, the opportunities for more frequent claims multiply as well,” reports John Smith on Propertycasual360.com.
- Your business may not be able to expand and grow as planned. The Federal Reserve recently reported that labor shortages and higher labor costs associated with attracting workers are restraining growth in sectors such as manufacturing, construction and transportation.
Perhaps worst of all, a less-than-optimal workforce may cause you to lose the valuable clients you already have. The disorganization, poor service and/or chaos that can result when key roles remain unfilled can quickly lead quality clients to take their business elsewhere.
Rather than taking a wait-and-see approach when it comes to your company benefits, it’s wise to be proactive in ensuring your offerings remain competitive. Ochs can help you objectively determine whether your voluntary insurance options are up to speed in your given industry and marketplace. Contact us at 651-665-3789 to learn more.