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A version of this article originally appeared on principal.com.
A robust benefits package is no longer optional for businesses hoping to retain valued employees. But employee benefits costs? They're a concern for your bottom line. Luckily, companies are leaning into balancing what their people want and what their budgets can afford. The payoff isn't just retention but making their team feel heard and valued. "It's really thinking of benefits differently," said Nate Schelhaas, senior vice president and head of life protection for Principal®. The path to success? Listen, set a budget, and flex your mindset. These four tips can help.
1. Ask employees what they're missing
You may think your employees are satisfied with the benefits you offer, but it's worth investigating if that's still true. While 46% of employers are interested in at least one additional benefit within the next year, 72% of employees are supportive.1
The best way to figure it out: Just ask. For example, your employees may view their wages or salaries as competitive but find themselves attracted to interesting benefits at another job.
"Employees may want to keep working for you, especially those with tenure," Schelhaas said. "Ask them what they like about work, and demonstrate you care about what they need by asking which benefits they value."
2. Know how benefits motivate your employees
Additional benefits don't have to be expensive to be meaningful. An employee, for example, could receive a flexible-schedule benefit from her employer that adds up to the cost of one month of childcare. "Something like that means a lot yet doesn't cost the organization much," Schelhaas said. "It's a tangible way to demonstrate that you're empathizing with your employees."
This thinking is contrary to the past approach of one-size-fits-all employee benefits. "The question in this very competitive retention landscape is, 'What are you doing to make a difference?'" Schelhaas said. "Find the benefit that's most valued and go from there."
3. Don't overestimate the cost of benefits
Schelhaas has found that many employee benefit costs are less expensive than decision-makers realize. "Because they use health insurance as a point of reference, they assume everything else is expensive, too, and assume they can't do anything," he said.
A dramatic example: More than half of Americans overestimate the cost of life insurance — assuming it's three times as expensive as its actual price.2 Don't let perceived cost become a barrier to an overall healthier and more secure workplace.
And the benefits you offer needn't be static; they may change based on evolving employee values or your bottom line. "You're helping employees understand that you're contributing based on their needs, and that means a lot," Schelhaas said.
4. Add access as an employee benefit
Let's say there's a potential benefit your employees want, but it's outside your employee benefits budget. Maybe what your employees really need is convenient access to that benefit. Your organization may have a range of options to pay for it — either the full cost, a portion of the cost, or no additional cost.
"For example, maybe they just want to buy extra life insurance," Schelhaas said. "It doesn't have to be all or nothing — either you offer the benefit and pay the entire cost, or you don't offer it. It could be as simple as making the benefit more accessible and affordable at work for employees who share in the cost."
Overall, Schelhaas said, just "think about how to personalize added benefits and meet employees where they are."
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1 Principal survey of 127 employers and 127 employees (not necessarily the same companies), November 2022.
2 Life Insurance Marketing and Research Association and Life Happens online survey of more than 8,000 adult
consumers, January 2022
This communication is intended to be educational in nature and is not intended to be taken as a recommendation. Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company®. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392. ©2023 Principal Financial Services, Inc.