As it turns out, offering perks can be just as good for the employer as the employee. That's according to the Principal Financial Group and the Harvard Business Review Analytic Services. A study of 58 of The Principal's 10 Best Companies for Employee Financial Security from the last decade found that companies that supported their employees with sustained, various benefits saw substantial positive effects on the companies' growth and dividends.
According to the report, all of the companies maintained or increased their benefits packages, and while some shifted health insurance costs to employees, most of the companies absorbed the higher costs themselves.
While many of the companies strongly considered cutting benefits in order to curb costs, only one of the 20 companies that were verbally interviewed for the poll by Harvard Business Review actually followed through. "We took a very strong look at cutting benefits, but we decided there would be a backlash down the road," said Jim Albertson, human resources manager at CIPCO during his interview. "We didn’t want to sacrifice long-term positive effects for short-term cost savings."
Rightfully so, three-quarters of those surveyed said that benefits contributed to employee retention and 72 percent reported that they affected employee loyalty.
Across the board, the most visible motivation for retaining such high benefits standards was the protection of the financial well-being of employees. Of all the benefits offered, nine out of 10 employers said the most significant benefit is retirement programs and generous employer contributions.
The poll showed that 75 percent of employers felt that their benefits package had a significant impact on employee retention, with 58 percent stating that it had a significant impact on the company's ability to maintain a competitive advantage. "At the most basic level, high retention translates into low turnover costs, and the 10 Best winners have, on average, voluntary turnover rates that are less than half industry averages," the report states.
In the last decade, 74 percent of the companies polled added a wellness program, 46 percent added group insurance benefits and 35 percent increased the company's contribution to 401(k).