7 Essential Employee Retention Benefits and 7 Reasons to Invest in Them

People leaders often spin multiple plates trying to enhance the employee experience and drive the organization forward. Although there’s always another initiative to consider, employee retention is worth your time and effort if you want to drive productivity, enhance customer loyalty, and save money. 

This guide takes a look at the current state of employee retention, the seven advantages of retaining employees, and the top seven benefits that will ensure your workers are happy to remain with you for the foreseeable future. 

Employee retention in 2024

Even with economic uncertainties and layoffs sweeping across multiple industries, most employees aren’t willing to remain in a role that doesn’t fulfill their needs. 

The Achievers Engagement and Retention Study highlights that 41% of employees are actively considering leaving their jobs in 2024, while 24% are unsure whether they will leave or not. Only 35% of workers are confident they’ll stay with the same company this year. 

With the odds stacked against employers, organizations must work harder to improve their employee retention rate and to attract and retain their talent.

7 advantages of investing in employee retention benefits

When companies keep their workers happy, they can achieve the following benefits of employee retention, which we’ll explore in-depth below: 

• Better productivity 
• Higher morale 
• Richer company culture 
• Reduced staffing costs 
• Enhanced knowledge continuity 
• Improved brand reputation 
• Greater competitive advantage 
• Positive customer experience 

Better productivity

High employee turnover is disruptive. Departing employees leave a hole in the team and the overall organization, which can mean a nose-dive for productivity. Investing in employee retention benefits means you’re more likely to keep your top performers, ensuring the team’s output remains high. Additionally, employees who feel valued and have their needs met are more motivated to succeed.

Higher morale

A line of employees heading for the exit will sour your remaining employees’ morale. They wonder what went wrong and who’s to blame and then start to reconsider their future at the company. On the flip side, employers who create a positive work environment ensure greater employee satisfaction and fewer empty seats. People want to be there. 

Richer company culture

A robust company culture is a magnet for attracting talent to an environment where employees produce their best work. Employees feel connected and engaged when a company communicates its values and integrates them into every aspect of its operations. This engagement translates into lower turnover and a stronger, more cohesive workforce to drive the business forward.

Reduced staffing costs

The costs associated with hiring new employees can be substantial. According to SHRM, the average cost per hire is approximately $4,700, encompassing recruiting, interviewing, and onboarding expenses. But these costs evaporate if your people remain in their roles. You’ll have more money to invest in allocating resources efficiently and focusing on strategic initiatives instead of constant recruitment. 

Enhanced knowledge continuity

Every organization has employees who are the rocks of the organization and who everyone turns to with their questions. These are the team members who’ve been there since the dawn of time or the product specialists who know the ins and outs of your entire product line. If any key personnel depart your organization, they take their institutional knowledge with them. But find a way to keep them happy and all their skills and critical intel remain in your organization. With deeper knowledge of products, services, and customer requirements, their experience produces better customer outcomes, leading to higher satisfaction rates and stronger brand loyalty.

Improved brand reputation

Let’s face it—when employees are loyal to an employer, it looks good. A company known for excellent employee treatment gains a positive reputation, not only with potential candidates but also with potential customers. Manage to achieve this, and you can expect favorable business partnerships and long-term organizational success. 

Greater competitive advantage

The productivity boost associated with retaining employees can push the company ahead of rivals who struggle with turnover disruption. Once that snowball starts gaining momentum, your high-retention organization will be even better positioned to attract top talent, further enhancing your competitiveness. 

7 benefits to improve employee retention

While compensation is important in retaining workers, only one company can pay the most. If that’s not you, focus on investing in the following employee benefits to support your workers personally and professionally. 

Health benefits

Health benefits are an expected staple of any comprehensive benefits strategy. But they need to meet the demands faced by modern-day workers. For example:

• Mental health issues are increasing in the U.S., with 23% of adults experiencing a mental illness in 2021, compared to 17.7% in 2008. 
• Employee burnout affects 77% of the workforce. 
• Infertility rates are also rising, with 1 in 6 couples impacted worldwide. 

To tackle these current health concerns and countless others, design a benefits package that enables employees to select medical care meaningful to their current life situation. For example, some of your workers may need access to mental health support, fertility benefits, gender confirmation surgery, and so on. Flexibility is key here, which can be achieved by offering: 

• Health savings accounts: HSAs allow employees to set aside pre-tax dollars to spend on healthcare. 
• Health reimbursement arrangements: HRAs enable employees to be reimbursed for eligible health expenses.  
• Flexible spending accounts: FSAs are another type of pre-tax account you may use for certain types of healthcare expenses. 

Rewards and recognition

Appreciating your employees for their contributions to your company can be as straightforward as remembering to say “thank you” after a difficult shift or could involve using a formal employee rewards and recognition program. 

Example: Benepass Rewards and Recognition offers an easy way for employers to reward their workers for a job well done. Employers provide the monetary reward, and employees decide how to spend it. Mary, age 27, from Tallahassee, receives a yearly birthday gift to support her wellness. She uses the funds to pay for a massage from her favorite massage therapist. 

Whether you opt for a structured rewards program like ours or something more informal like a Kudos Wall, employee appreciation can be impactful for your retention strategy. OC Tanner’s Global Culture report reveals that when employees receive frequent recognition, they’re 149% likelier to want to stay with the organization for more than one year. 

Employee development

The need to upskill and remain relevant in the face of AI disruption is on your employees’ minds in 2024. Workers don’t just want to do their jobs; they want to keep acquiring new skills, work alongside seasoned professionals, and take new certifications to continuously progress their careers. If they cannot grow within your organization, they’ll head to a competitor willing to invest in their employee development. 

This is backed by Achievers research, which reported that 24% of employees cite “career progression” as a reason to leave the company. Mitigate against this risk by offering flexible professional development benefits which act as an upfront stipend for your employees to spend on: 

• Conferences and seminars 
• Professional training courses 
• Coaching 
• Mentoring 
• Online learning platforms 

Paid time off 

Although critics believe that unlimited PTO can prevent employees from taking enough vacation time due to its lack of structure, one in four employers has introduced unlimited vacations in a bid to retain their best employees, according to Achievers. 

Why? Employees and job candidates increasingly emphasize work-life balance when choosing a new workplace. Employers who clearly value their employees’ wellbeing by providing ample restorative time are attractive to top talent.  

When employees feel refreshed and appreciated, they’re more likely to perform better at work, take fewer sick days, and have higher morale and job satisfaction. 

Perks

There are limitless employee perks you could offer to support workers in their personal and professional lives. For example, you might incorporate some of the following to retain your talent: 

• Childcare benefits 
• Paid parental leave 
• Remote work options
• Gym memberships 
• Pet insurance and “pawternity” leave 
• Financial wellness programs
• Retirement benefits 
• Commuter benefits 
• Meal and nutrition benefits
• Partner discounts 

The list can be as long and creative as you wish. As with any successful employee retention strategy, personalization is key. Remote employees won’t need commuter benefits, and workers without families or pets won’t take advantage of childcare or pet benefits. 

Avoid subscribing to a one-size-fits-all policy by using a lifestyle spending account as a flexible way to administer your benefits. You’ll fund the account, and your employees will spend it on the benefits that best suit their needs. 

We put together a guide to employee stipends to provide an overview of this popular employee benefit and offer inspiration as you design your stipend program. Download the guide to learn about the types of stipends available and how to design a successful program.

Flexibility

Flexible work arrangements are a low-cost benefit that could result in higher employee morale and be a key pillar in an effective employee retention strategy. There are various ways to offer flexibility to your employees, including: 

• Schedule flexibility: Allowing employees to work hours that suit their life situation is important to 88% of workers. 
• Workweek flexibility: Employers like Buffer and Talent Bee work a four-day workweek. Other compressed workweeks include the 9/80 model, where employees work 80 hours over nine days and have every other Friday off. 
• Location flexibility: Atlassian’s Global Head of Team Anywhere, Annie Dean, asserts why the “place” of work is meaningless compared to the content of what workers produce: 

“Bosses who force workers back are going to have to admit that return to office mandates have not impacted productivity outcomes. The leaders who are making these decisions have had personal experience of building companies that are based in an office and we don’t yet have fully ripened digital norms that make it exceedingly obvious that “place” is not important to get work done. But that will become very obvious over the next two to three years.” 

Stipends and reimbursements

Stipends are a one-off or recurring payment that employees receive (for example, monthly or annually) while reimbursements require an employee to pay for a service before getting reimbursed. In either case, they might cover: 

• Wellness: Employees could use these funds for activities promoting their health, such as gym memberships, yoga classes, or sports equipment.  
• Technology: Employees invest in the equipment they need to create a productive home office and devices such as cell phones, desktops, and laptops that support them in their daily work. 
• Professional development: Employees choose relevant courses, coaching, or development opportunities. 

So, which is better—stipends or reimbursements? With 65% of Americans currently living paycheck to paycheck, many employees wouldn’t be able to afford the upfront cost of investing in a gym membership or training course, and then waiting for the reimbursement. From the employer side, reimbursements are also admin-intensive, requiring an expense approval process. For this reason, we recommend using intuitive employee retention software to provide stipends.

Retain your best employees with Benepass

There’s no secret sauce for holding onto your best workers. But providing a generous mix of employee benefits alongside a healthy salary will put you on the right track. 

Benepass is a versatile, people-first benefits administration platform that allows you to customize your benefits package based on your employees’ needs. By doing so, your workers will want to remain with your organization for many years. 

Take a free Benepass demo today to see our platform in action, or contact sales@getbenepass.com to connect with a benefits specialist and retain employees for the long haul.