What's the secret to good worker attendance, retention, productivity, and the ability to attract top-notch recruits? Employee benefits.
Which companies thrive and grow their businesses faster than their peers? Same answer: Those that offer better benefits to their workers.
That's the takeaway from a survey of businesses last year, conducted by insurance specialist AFLAC (AFL). It found that companies reporting rising sales are more likely to offer a host of employee benefits, such as major medical coverage (85%, vs. only 74% of companies with shrinking sales), life insurance (75% vs. 57%), 401(k) plans (81% vs. 62%), and flexible work options (36% vs. 28%). Some 66% of workers at the growing companies felt that their benefits package met employee needs well, vs. just 52% at companies with falling sales.
The Benefits of Benefits
Some executives may see benefits as purely a cost to their companies, but smart leaders realize that money spent on employee benefits can be well worth it. For example:
- Good health care coverage can keep workers in better shape, and thus able to spend more time on their work.
- Strong overall benefits packages have been linked to increased employee loyalty and retention.
- Great benefits attract more prospective employees, giving the company a richer pool of talent to draw from.
- The AFLAC survey also found that employees are more likely to refer friends to the company when benefits are strong.
Would You Trade Your Benefits for 20 Grand?
When offered $20,000 instead, 48% still wanted their benefits. Nearly half of the respondents noted that they take at least one medication regularly (such as for high blood pressure or diabetes), leading them to value their coverage highly.
Of course, not all employees have a choice about benefits, especially when many firms have been shrinking their offerings lately, including asking employees to pay more of their health-insurance premiums to offset long-skyrocketing costs.
Companies That Offer Botox, Tanning Beds and Auto Tune-Ups at Work
Unusual employee perks garner lots of press. According to CNN Money, online shoe giant Zappos.com, now part of Amazon.com (AMZN), offers a free life coach. Cisco Systems (CSCO) provides automotive tune-ups. Chesapeake Energy (CHK) employees enjoy on-site Botox injections and tanning beds, while Morningstar (MORN) employees are eligible for generous sabbaticals.
QCOM), Microsoft (MSFT), and Whole Foods Market (WFM). Among CNN Money's top 100 companies to work for, they're three of only 14 that pay 100% of their employees' health insurance premiums.
For the scoop on retirement benefits, BrightScope.com lets you look up most major companies' retirement plans, and see how they compare to their peers. Xerox (XRX), for example, sports an overall rating of 73, vs. 85 for Cisco and 87 for IBM (IBM). Xerox's Achilles' heel is its below-average score in company generosity, but it gets top marks for plan costs and account balances. IBM matches 100% of employee contributions to 401(k) plans, up to 5% of salary, and adds an extra 1%.
If these surveys are any indication, CEOs who want to boost their bottom lines should make beefing up benefits their first priority.
Longtime Motley Fool contributor Selena Maranjian owns shares of QUALCOMM, Chesapeake Energy, and Microsoft, but she holds no other position in any company mentioned. The Motley Fool owns shares of IBM, Morningstar, Whole Foods Market, Microsoft, Cisco, and QUALCOMM, as well as having created a bull call spread position on Cisco. Motley Fool newsletter services have recommended buying shares of Cisco, Amazon.com, Microsoft, Chesapeake Energy, Morningstar, and Whole Foods, as well as creating a bull call spread position in Microsoft.