In today’s tight labor market, it’s a battle to attract and hold on to top talent. If you’re worried about how to retain employees, improving your group health insurance plan could be the answer.
A 2016 survey by the Employee Benefit Research Institute (EBRI) survey found a strong correlation between quality workplace benefits and employee satisfaction and morale. In the survey, 59 percent of respondents who were extremely satisfied with their benefits were also extremely satisfied with their jobs. And when respondents said they were not satisfied with their benefits, only 8 percent said they were extremely satisfied with their jobs.
Out of all workplace benefits, employees picked health insurance as the most important when deciding whether to take a job or stay at an organization. But it’s not enough just to offer a health insurance plan, as 82 percent of respondents to the EBRI survey reported that their employer offers some type of health insurance. To retain the best employees, you need to offer a high-quality plan that meets your employees’ tastes and needs. The Society for Human Resource Management (SHRM) found that 56 percent of employees said that whether or not they like their health insurance plan is a key factor in whether they will stay at their job.
Here’s how to retain employees by taking another look at your health benefits plan.
Improving Your Health Insurance Offering
So what determines if employees like their health insurance? SHRM notes that when employees are happy with their insurance, the top reasons they give are because the plan offers comprehensive and affordable coverage, free preventive services and a choice of providers. On the other hand, when employees don’t like a health insurance plan, it’s because costs are too high, coverage is insufficient and the plan itself is too confusing or doesn’t offer enough flexibility.
One of the clearest ways to improve your health insurance plan is to cover more costs yourself, either by paying more of the premium or covering a greater share of out-of-pocket expenses for employees. You could also upgrade your plan so that it offers a larger provider network and includes more preventive services.
That said, there are other, lower-cost ways to improve your plan and increase employee retention. One problem might be that your employees simply don’t understand your existing plan’s full value. A 2017 Lincoln Financial Group study found that 44 percent of employees don’t feel confident about their benefits decisions. This is why it’s important to communicate strategically about how your plan works and how your employees benefit from it. Use examples of how much of the costs your insurance plan picks up. For example, show the sticker price of a broken leg vs. how much a covered employee would actually have to pay out of pocket.
Next, review your plan to see whether there are any extra features that your employees — or even you — may not be aware of, like a nurse hotline or gym-membership discounts. Look for additional features and affordable supplemental plans that could fill particular needs among your employees.
Finally, think about auxiliary changes you can make to improve your employees’ relationship with their plan without changing the plan itself. For example, give employees time off for preventive care, like routine checkups or vaccinations, so that they don’t have to use vacation or sick days. Your employees appreciate the extra time off and they’ll feel encouraged to take advantage of their benefits. When they see positive health results, they’ll understand the value of their plan.
ROI and the Cost of Losing Employees
With health care costs going up, it isn’t always possible to spend as much as you’d like on your benefits plan. But as you set your budget, be sure to weigh the costs of improving your plan against the costs of employee turnover. In other words, how much would it cost not to invest in better health insurance?
Losing an employee is expensive — but just how much it costs depends on who you ask. SHRM estimates that on average it costs $4,129 and takes 42 days to hire a new employee — almost a month and a half where your business won’t be operating at 100 percent. According to HR Dive, Employee Benefit News estimates the cost of losing an employee at 33 percent of their salary, while a Deloitte analyst puts the total cost at up to 1.5 to 2.0 times the employee’s salary.
In short, spending more on your health insurance today could pay for itself by reducing costly employee turnover later.
Don’t wait until it’s too late and then wonder why your employees aren’t sticking around. And if you improve your health plan without seeing turnover rates go down, don’t forget to look into other potential areas that might need rethinking.
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