For employees, benefits can be a valuable part of compensation and a way to protect their health and well-being. But what does the employer gain out of it?
"Companies are setting themselves up to get many benefits back," says Melodie Holmes, Director, Client Experience Communications, Group Benefits, Manulife Financial in Waterloo, Ontario.
Smaller businesses in particular might not have the human resources personnel to fully assess the return on investment of benefits. Even larger companies can struggle to gauge that. Just one-third of employers measure the outcomes of wellness programs, according to the Conference Board of Canada's 2012 report, Making the Business Case for Investments in Workplace Health and Wellness.
Yet as Ms. Holmes notes, what's good for the employee may also be good for the employer. Consider five ways that offering benefits can be an advantage for the company, too:
1. Attract and retain the best people. When employees are weighing job offers, the availability of perks such as medical, dental, life, disability and critical illness insurance comes into play. In a Manulife Financial survey of Canadian small business owners and managers last year, more than half (55 per cent) said that offering competitive health benefits is a crucial element in hiring and keeping top talent.
2. Increase efficiency. Establishing wellness programs can lead to reduced absenteeism and reduced "presenteeism" (coming to work despite having an illness that justifies an absence), says the Conference Board of Canada study on the business case for wellness programs. Wellness programs cut absentee levels by 1.5 days per employee on average, according to recent research by the Richard Ivey School of Business at Western University in London, Ont. For a firm with 20 employees, that's the equivalent of six work weeks a year.
3. Save money. The International Foundation of Employee Benefit Plans says employers that have analyzed the financial impacts of their wellness programs report a reduction in their overall health care costs by up to three dollars for every dollar spent. Access to medical and dental coverage, health promotion messages, health screenings and health risk assessments all create healthier employees.
4. Boost morale. Making benefits available – and ensuring that employees know exactly what their benefit plans entail – can help to create happier employees. A survey by Harris Interactive found that 82 per cent of employees who rated their benefits education highly also rated the employer as an excellent or very good place to work.
5. Foster an even more effective workforce. It's only natural, Ms. Holmes says, that people who feel that their employer has their best interests at heart will be more dedicated. The Manulife survey of small businesses found that 76 per cent of respondents believe that taking care of employees makes them work harder for the company.
For business owners, some of these results are more easily quantifiable than others, Ms. Holmes says. Some returns are more subjective – such as a feeling that employees are more satisfied with their job – and can be tied to more than just the presence of a benefits program. But the evidence of the payback of benefits is clear, she says.
"You're likely to see a more positive and productive work atmosphere," Ms. Holmes says. "Companies are the ones receiving the benefits in the end. Providing benefits is just good strategy - an investment in the growth and longevity of your business."