Improve Employee Retention by Reevaluating Benefits Packages

What benefits can employers offer to improve employee retention?​

In times of high employee turnover as workers resign in search of greener pastures, revisiting employee benefits offerings might help retain top talent. According to SHRM research from 2024, 68% of organizations that did not experience retention challenges in the past 12 months cited having a competitive benefits package as a key reason for their success

Before overhauling your employee benefits package, start by understanding why your employees are leaving. Conduct interviews with or survey employees who are leaving as well as those you still have the opportunity to retain. Collect information on what employees like about your company's benefits as well as what may be driving them out the door.

While the demographics of your workplace will have a significant impact on the benefits employees want, there are some common trends that are valuable to any large group of employees.

Benefits that Move the Retention Needle

Flexible work options. By far, flexible work options are the most sought-after work benefit today. Widespread research shows that employees want flexibility in where and when they work. Many employees are seeking fully remote positions that allow them to work from anywhere. In workplaces where fully remote options are not feasible, hybrid arrangements that allow employees a couple of days each week to work from home are popular. For jobs that can't be performed remotely at all, flexible work hours, such as allowing employees to work during non-traditional hours or compressed workweeks, is the next best thing. According to SHRM's 2024 Employee Benefits Survey, 70% of organizations said that flexible work benefits were either "extremely important" or "very important" to their workforces.

Toolkit: Managing Flexible Work Arrangements

Paid leave. Paid time off beyond traditional vacation and sick leave can help employees reduce stress and create better work/life integration. Paid family leave has increased significantly since 2019, according to SHRM research, and unlimited or open leave policies that allow employees to take time off as needed with no specific cap on the number of days are gaining in popularity. 

Financial wellness. More organizations are offering benefits like access to emergency funds and financial planning services. While this offering took a dip during the pandemic, it has been rebounding slowly, with 32% of organizations saying they offer some kind of nonretirement financial advice benefit, according to SHRM's 2024 Benefits Survey. Employers are also using increases to 401(k) employer contributions and matching to retain employees. 

Career development. Employees feel more engaged when they believe that their employer is invested in their growth and career development. Employers can highlight career path options within the organization, allowing employees to visualize what opportunities are available. Organizations can also offer development tools such as mentoring and coaching to assist employees in obtaining their goals. See Developing Employee Career Paths and Ladders.

Educational assistance. Investing in employee career growth through enhanced tuition assistance and training programs can pay off. Nationwide restaurant chain Chipotle Mexican Grill reported a retention rate that is three-and-a-half times higher for employees enrolled in the company's generous educational assistance program.

Toolkit: Designing and Managing Educational Assistance Programs.

Mental health and wellness. Workers are seeking employers who care about their employees' mental well-being and invest in training, education, benefits and programs that connect employees with treatment options and mental health care providers. In 2023, 43% of workers said they would likely leave their job for a new one offering better mental health benefits, emphasizing the growing importance of benefits in retention strategies, according to SHRM research presented at the EN Insights Forum. 

Toolkit: Creating a Mental Health-Friendly Workplace

Benefits to Consider

Great pay and health care benefits are fairly consistent drivers of retention. But in today's labor market, that might not be enough. Employers need to think outside the box. Start by investing in comprehensive surveys on employee benefits to identify what perks competitors are offering to lure employees. Or better yet, be a trailblazer and offer benefits that might not be mainstream to set your company apart from others. Some desirable perks and benefits that may entice employees to stay include:

Home Office Support

• Equipment allowances.
• Ergonomic evaluations and equipment.

Pet-Friendly Perks

• Pet insurance.
• Pet sick/bereavement leave.
• Pet-friendly workplaces.

Onsite Offerings

• Child care centers.
• Massages.
• Healthy food options.
• Services such as oil changes, car washing and dry cleaning pickup/drop-off.
• Quiet rooms for meditation or prayer.

Wellness Support

• Gym memberships.
• Sabbatical leave.
• Ergonomic workstations/standing desks.
• Health and wellness coaching.

Inclusive Workplaces

• Floating holidays.
• Employee resource groups.
• Transgender-inclusive health insurance coverage.
• Diverse health insurance provider networks.
• Employee skills training such as American Sign Language or foreign language instruction.

Other

• Employer-paid food delivery subscriptions.
• Transportation subsidies and/or ride-share coordination.
• Student loan repayment assistance.
• Employee discounts for company products or services.

Balancing Costs with ROI

You don't have to be a Fortune 500 company to implement many of these benefits; however, it may take some financial investment to remain competitive in a tight labor market. When there is absolutely no budget to enhance the employee benefits package, employers can find some offerings that are free, but it might take some legwork and creative thinking:

• Scour the Internet for free options such as TicketsatWork, which provides employees access to discounts on entertainment tickets and other services, or EdApp, a free online employee training platform.
• Conduct an audit of your health insurance plan for provider diversity and coverage inclusivity.
• Implement cost-free changes such as converting an unused space into a quiet room.

Ultimately, asking your employees what it is they want, rather than guessing or implementing something just because a competitor is doing it, will be most effective. But don't ask if you aren't ready and willing to implement the suggestions. If a pet-friendly workplace isn't feasible, don't include it as an option. Instead, list only the perks and benefits that could be adopted. Allowing employees to submit additional suggestions can be helpful, but you should include a caveat that not all suggestions will be implemented. Consider mentioning those benefits that might already be off the table.