New perks, new strategies, new working models -- employers are trying everything they can to keep their employees happy and motivated. But in many ways, it’s not really working. In March, employee engagement reached a high of 34.1 percent, only a slight increase, a Gallup report found, from an average of around 33 percent, dating all the way back to 2011.
Why aren’t engagement strategies hitting their mark? They ignore what employees really want. Employers are running around in circles trying to make employees happy, but the solution is simpler than they realize. The answer, according to new research, is mastering core HR functions before moving on to perks. Chief among them? Employee benefits.
Flashy new perks come and go, but new data reveals that employees really just want better benefits. Here’s a look at just how important core benefits are:
They engage employees.
"Engagement" is a heavy word that employers are always discussing and debating -- and for good reason. Engagement is a serious problem in the workplace. But fixing engagement isn’t about company culture fixes or offering free snacks. It’s really about core employee benefits.
In fact, 54.3 percent of employees and HR professionals working for companies with fewer than 5,000 employees chose core benefits like health insurance as the perk or benefit that contributes most to their feelings of engagement, according to a survey from #HRWins and my company, Namely.
Employers agree. Among mid-sized employers surveyed, 60 percent said that benefits and paid time off have the highest ROI of all perks -- more so than reward programs, team outings, office environment, snacks and recognition.
The takeaway here is: Stop focusing on ping-pong tables and margarita Fridays, and start investing in what really matters to employees. Look at adding health savings accounts, voluntary benefits like vision and dental and other true benefits, rather than arcade games and new couches. While perks can improve employee morale and engagement, employee benefits make the largest impact and need to come first.
They drive the most satisfaction with rewards.
When a company uses solid benefits to build a firm base for its total compensation strategy, employees become happier with benefits overall. Better traditional employee benefits are the best way to improve satisfaction with overall rewards, according to a study of more than 470,000 employee reviews conducted by Glassdoor Economic Research and published in June.
The report found that health insurance, 401(k) retirement plans and vacation and paid time off have the greatest effect on how employees rate their benefits. And, among these, health insurance was the largest driver of satisfaction with employee benefits.
Before employees can really enjoy new and exciting benefits and perks, they need strong traditional benefits -- which are the foundation of a satisfying compensation package. Employees won’t care that you have a wellness program if they still can’t afford to visit a general practitioner. And they won’t be as excited about their bonus without a retirement or savings plan.
Before looking to new perks or bonuses to keep employees satisfied, reevaluate benefits. How could they be improved? Which plans best fit the needs of employees? Talk to employees to see which core benefits they’re lagging, and what can be done to make them better.
They improve company performance.
With improved satisfaction and increased engagement, it’s no surprise that better employee benefits can lead to better company performance.
Steve Easterbrook, CEO of McDonald’s, noticed this trend firsthand. When the company's sales increased for the third straight quarter back in April, he attributed that success to better employee benefits.
“The improvements we made to our compensation and benefits package to employees in U.S.-company operated restaurants, along with expanding Archways to Opportunity . . . have resulted in lower crew turnover and higher customers satisfaction scores,” Easterbrook said in a call to Wall Street analysts, Yahoo Finance reported.
Happier employees not only mean improved productivity, it also means better interactions with customers. After all, customer satisfaction scores for McDonald’s went up six points. When employees are happy with their benefits, they’re more likely to be engaged, satisfied with their work and loyal to their employers.