How Financial Wellness Can Aid Employee Retention
COVID has changed the way we work overnight. While the job market is tough and unemployment is high, some employees are still leaving the safety of their current jobs to look for others.
Watching a top-performing employee leave is not only disruptive to your business, it’s also expensive and fraught with other potential challenges.
Let’s take a closer look at some of these challenges related to employee turnover and what a solution might look like.
The Cost of Hiring A New Employee
The cost of hiring a new employee runs deeper than just their salary. There’s the cost associated with the initial recruiting, training and benefits. There is also the lost productivity cost of the vacant role and potential negative impact on team morale. Here are the common costs associated with hiring a new employee:
A recent survey by the Society of Human Resource Management (SHRM) found that the average cost per hire is over $4,000.
According to Training Magazine, companies spent an average of $1,286 per employee a year on training in 2019.
The Boston Business Journal states that a new hire’s salary plus benefits typically adds up to 1.25 to 1.4 times their base salary. For example, the salary plus benefits for an employee who earns $90,000 a year equals to around $112,500 to $126,000.
While these hard costs vary by industry, hiring a new employee involves additional short-term and long-term effects on your organization. Most companies and teams will experience a loss of productivity while waiting for new hires to join. Understaffing can put an additional load on the existing team and take a toll on team morale.
Losing top talent is expensive. So how can employers keep their people happy and engaged?
Retention can start with small things like giving your employees a full pantry or allowing them to bring their pets into the office. Extending further from there, you can support your employees with their career and self-development. There are a lot of things you can consider when it comes to keeping your employees engaged and happy.
Here’s what we know employees want:
Employees are looking for growth in their role and in their careers. According to the CNBC/SurveyMonkey Workplace Happiness Survey, nearly a quarter (24%) of Gen Z and Millennial workers say that “having opportunities to advance” is the most important factor in their overall happiness at work.
Training and development
Through mentoring, seminars and classes, and educational materials such as books, video series, and audiobooks, skill enhancement programs might give your employees the boost they need.
In pre-COVID days, free lunches and snacks were all the rage. As we embrace a new way of working, small food perks for example can go a long way. Free lunches and snacks have been known to keep employees motivated. While currently you may not be hiring chefs in-house to feed your growing team, Doordash and Postmates credit can be a win for your employees. Other small perks can include things like frequent visitor awards at local coffee shops and discounts with health clubs.
Wellness offerings that keep employees mentally, physically, and financially healthy can also help with engagement. Physical and mental wellness programs have been around for a while, but financial wellness benefits are having a big impact in the workplace today.
A 2019 survey by Employee Benefit Research showed the top reasons why employers choose to offer financial wellness benefits. Here’s what they found:
- 42% said it was to reduce financial stress and
- 35% said that having a financial wellness solution can improve employee retention
Some employees even say they would consider leaving for an employer focused on financial wellness. By offering financial wellness benefits companies can help their employees achieve their short-term and long-term financial goals, while increasing employee engagement and retention.