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Time for Benefits? Cut Turnover Costs with the Right Package

Keep your team happy and minimize turnover costs by offering the right employee benefits.

Monday, March 24, 2014/Categories: hiring-and-human-resources

 

Owning a small tech business is a juggling act: you have to attract new clients to keep your revenue strong; ensure that your equipment is up-to-date and in good working order; and keep track of rent, utilities, salaries, insurance, and dozens of other costs. Oh, and then you have to actually serve your clients, too.

In addition to all these costs, you also have to maintain a workforce of motivated, skilled employees – without losing them to competitors who can offer bigger paychecks.

Hiring a New Employee Costs $3,500+

From creating a job posting to sifting through résumés to interviewing to hiring, bringing on a new staff member costs about $3,500 – and that’s if the person earns minimum wage. The costs increase as salary increases, in part because you have to funnel your energy toward finding a new worker rather than serving your clients.

The good news: research shows that you can avoid those costs and keep your employees in place by offering non-cash benefits if you can’t afford higher salaries.

So how do you know when it’s time to start offering benefits to keep your staff right where they are – and which benefits to offer? Industry analysts suggest the following.

  • Get serious about benefits when you have six to 10 employees. Small-business consultants recommend that business owners start developing a comprehensive benefits package when they have six to 10 employees they want to keep. Putting benefits in place will help you both retain the workers you have and attract new ones as you grow.
  • Offer health insurance. How important is health insurance to employees? A survey found that 90 percent value health insurance as the top benefit from employers. The good news for small-business owners is that the Affordable Care Act’s new provisions may make it easier for you to provide coverage for your staff.
  • Consider retirement options. After health care, retirement benefits are a nice way to communicate that you care about your employees’ long-term wellbeing. There are multiple retirement savings and investment options available, many catered specifically to the needs of small businesses.
  • Survey your employees to see what they want. Before implementing any benefits, you may want to see what most interests your staff. If everyone has health insurance through a spouse, for example, they  may be more interested in gym memberships, floating holidays, or other benefits.
  • Provide flexibility. The one trump card small businesses have over bigger companies is their ability to be flexible. Today, maintaining a work-life balance is more important than ever to employees: one study found that 87 percent of people consider flexibility “very” or “extremely” important in jobs.


Sources:

http://www.entrepreneur.com/article/223516

http://www.advisorone.com/2013/01/29/insurance-trounces-retirement-in-small-business-be

http://www.investopedia.com/financial-edge/0711/the-cost-of-hiring-a-new-employee.aspx#axzz2JwsN2IVk

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