One of the most underestimated costs to a business is losing employees, especially key employees critical to the success of your business. According to a study done by Society for Human Resource Management “employers will need to spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement. That means an employee salaried at $60,000 will cost the company anywhere from $30,000 to $45,000 to hire and train a replacement.” That cost is even higher when it comes to a highly trained key employee. Another research study by the Center for America Progress states the cost of losing a highly trained position could be upwards of 213%!
What is a business owner to do? Building out a benefits package to retain not just non-highly compensated employees, but key employees critical to the success of your company, can have a long-standing impact on the financial wellness of your company, and in the lives of your employees. Here are some key benefits to consider:
- Offer group health benefits to include mental health care – more and more people are looking for benefits to include coverage for mental health care and coverage for adult disabled dependents.
- Include a Financial Wellness Program as a value add – when your employees are educated on financial literacy, they are more likely to have a financial plan, avoid making wasteful financial mistakes, and have overall less stress, leading to positive behavior and workplace engagement.
- Consider offering an employee retirement package – depending on the size of your company a retirement package such as a 401k plan, SIMPLE or SEP-IRA may benefit your company and attract employees. (If you are a solopreneur, you may consider a Solo 401k plan.)
- Consider executive benefits for key employees that are critical to your business – the cost to replace these individuals is high, so retaining them is key! There are ways to add benefits for your highly skilled, most valuable executives, without having to benefit all employees (unlike health plans and 401ks plans which have discrimination rules). Some of these benefits include Executive Bonus, Deferred Compensation, SERP (Supplemental Employee Retirement Plan) and Split Dollar plans. You may even consider a key person life insurance and disability plan to cover the risk of losing this person to a premature death or long-term disability.
- Offer other fringe benefits such as: PTO/vacation, work hour flexibility, work from home, child care benefits, group life and disability insurance, and tuition reimbursement.
- Don’t underestimate the power of your employee’s voice – when employees feel heard and valued, they are happy and tend to stick around. Build out a system to find out what is important to them, what they value, and leave space for them to offer suggestions on ways the company can continue to grow in an impactful and meaningful way.
When it comes to designing a meaningful benefits package to offer your employees, and specifically your key employees, it’s important to decide what will have the most impact in their lives and on the long-term goals of your business. Working with an experienced financial advisor who can help you design a package that will help your bottom-line and assist in retaining your key employees can help save you time, energy and dollars.
 Essential Elements of Employee Retention: https://lrshrm.shrm.org/blog/2017/10/essential-elements-employee-retention