Following eight years of job growth, the U.S. unemployment rate hit a nearly five-decade low in September, according to a recent U.S. Department of Labor jobs report. While this is good news for the U.S. economy, it suggests there is a smaller pool of active job-seekers and a high demand for workers.
As a result, companies are facing fierce competition when it comes to winning over new talent. While some companies are raising wages to woo job candidates, many companies cannot afford to do so. However, boosting benefits is another effective strategy for not only winning new talent, but keeping talent around. In fact, 55% of the 2,000 employees surveyed for the 2018 Aflac WorkForces Report said they would be at least somewhat likely to accept a job offer with slightly lower compensation but better benefits options. Additionally, more than one-third of employees said an improved benefits package would help keep them in their current job.
Of course, every employer situation is different. This article is for informational purposes only and is not intended as a solicitation.
You have to counsel each employer client separately, and encourage each to seek any relevant accounting and legal advice.
But, by some estimates, the financial impact of losing an employee can range from tens of thousands of dollars to twice the employee’s annual salary —and the impact is especially felt in a tight labor market where replacing talent often takes some time. These numbers may not be surprising considering the costs associated with hiring, onboarding, training, learning and development. Losing experienced workers only amplifies the financial drain.
As you counsel clients, discuss the role benefits play in attracting and retaining employees. Employers do not always consider how major medical benefits and voluntary insurance can factor in employee retention, thus saving money. Bringing this concept to the forefront will likely provide them with a new perspective on maintaining a well-run workforce and, in turn, a positive bottom line.
Voluntary Insurance and Cost Containment
Brokers and agents have an opportunity to remind decision-makers that one low-cost way to improve a benefits package and boost employee morale is by adding voluntary insurance options, such as vision and dental as well as accident, critical illness and hospital indemnity insurance.
Because voluntary benefits are paid directly to policyholders, unless otherwise assigned, they can be used to help pay housing costs, utility bills, car payments, deductibles, and co-payments in the event of illness or injury. This gives advisors room to explain that a robust health benefits package can act as a financial safety net for employees and help relieve some of their financial stress. With 45% of employees stating that they are more likely to buy insurance if it is recommended by a benefits professional, advisors can use this opportunity to their advantage, as well. And when employees feel prepared for the future, they can focus more on their day-to-day responsibilities.
Voluntary insurance goes a long way toward meeting employee needs and expectations, and often costs businesses little or nothing to add to their benefits package. Furthermore, by offering employees voluntary benefits options, clients can potentially contain or save costs through reduced turnover and happier employees. And when employees’ needs and expectations are met, they are more likely to be satisfied with their jobs, more engaged and more productive. But most importantly, they are less likely to look for a new job.
Andy Glaub, a 33-year veteran of Aflac, is the senior vice president, director of sales. He oversees the U.S. Sales team and is responsible for sales strategy, innovation and development in the worksite benefits market.