What impact do benefit offerings have on marketplace competitiveness and the ability to attract and keep quality employees? Do you think pay is the primary motivating factor for most job applicants...
What impact do benefit offerings have on marketplace competitiveness and the ability to attract and keep quality employees? Do you think pay is the primary motivating factor for most job applicants and existing employees?
The costs of benefits in a large organization are substantial. The U.S. Department of Labor estimates the average worker costs an employer $33.94 per hour. Benefits averaged $10.70 of that total, representing almost one-third of the employee expense. These numbers suggest organizations make a large investment in employee benefits. Fortunately for the companies, this investment in people appears to pay off.
The leading benefit is health insurance. One survey reveals healthcare reigns supreme over other benefits such as vacation days, bonuses, and retirement plans. Another survey found nearly as many people ranked it as important as the actual salary. Finally, only 19 percent of employees would give up health benefits for wages, and many people in that 19 percent are likely supported on another healthcare plan, such as their spouse's.
The impact on business is simple. Failure to offer at the very minimum health benefits will drastically decrease a company's ability to remain competitive in the marketplace. The vast amount of information suggests the most qualified employees will seek employment with offered benefits. Although economic downturns might force employees to accept less-than-desirable positions, it can be assumed these employees will continue to seek better employment. It is estimated 73 percent of employees would or have actively sought other employment while employed.
Wages remain a highly regarded aspect of employment. Base pay is near the top of the list of what job seekers consider when evaluating a position. Other attractions include job security, vacation days, and the organization's reputation. Various studies show benefits rank about fourth in a list of other important factors. Whether pay remains the primary motivation is tied closely with the nation's economic security. Employees will devalue pay during economic upswings, but will prioritize it more during periods of recession.