6 employee benefits with exceptionally high return on investment
Here are some benefits companies can offer that will help improve employees’ lives while also attracting and retaining employees and providing ROI.
Benefits can make a big difference in a company’s ability to attract and keep employees. Of course, employers are more apt to offer above-average benefits packages when they see a financial ROI.
Nearly 70 percent of employees feel more loyal to companies with good benefits, according to a MetLife survey, while 41 percent would look for a new job to get better benefits, an Unum survey found. Three out of five job seekers consider the benefits package before deciding on a job offer, according to GlassDoor.
Some benefits are mandated by law, such as overtime pay, and others have become standard or even expected, including paid vacation, paid sick days and healthcare.
Voluntary benefits can include non-traditional offerings like pet insurance, student loan repayment programs, paid time off for volunteer work and elder care. These types of benefits are growing, which can make it challenging to develop a comprehensive and attractive benefits package that appeals to the majority of employees.
A GlassDoor survey found that 94 percent of employees want benefits that meaningfully impact quality of life.
But employers need to offer benefits that will help improve employees’ lives while also attracting/retaining employees and providing ROI. Below are the types of benefits with the highest ROI for employers:
1. Health care ROI: 200 to 300 percent
Although not mandated, offering group health insurance is a benefit most employees expect. Determining an exact average ROI is difficult and depends on a company’s size and employee participation, how much premium is paid by the company versus the employee, and policy details such as coverage and deductibles.
A U.S. Chamber of Commerce report shows an ROI between $2 and $3 when companies offer medical insurance between two and nine years.
2. Health wellness programs ROI: 600 percent
A recent Harvard study suggests that the ROI of such programs is $6. That’s why nearly 70 percent of employers with more than 50 employees offered some kind of health wellness program, according to the Society of Human Resource Management.
Nearly 85 percent of large companies offer health wellness benefits, the Kaiser Family Foundation 2019 Employer Health Benefits Survey found.
3. Mental health benefits ROI: 162 to 218 percent
In 2019, almost nine out of 10 employers (87 percent) offered some kind of mental health benefit, according to a Workplace Wellness Trends report. The most popular mental health benefits include EAPs, mental-health medical coverage, substance abuse treatment, mental-health risk assessments, informational sessions, and stress management programs, states a 2019 report by the International Foundation of Employee Benefit Plans.
Deloitte Canada found that offering such programs grows more beneficial over time, with an ROI of $1.62 after one year and $2.18 after three or more years.
4. Tuition reimbursement ROI: 129 percent
Employers found that by encouraging continued education, they can bring added value to their business and retain valuable employees. Cigna, working with the Lumina Foundation and Accenture, evaluated its tuition reimbursement plan and found that for every dollar spent on employees’ college tuition, the company recouped that dollar and saved $1.29 more in “talent management costs,” an ROI of 129 percent.
5. Flextime and telecommuting ROI: 170 to 445 percent
Even before COVID-19, employees sought opportunities for flextime and remote work arrangements. Global Workplace Analytics found that remote work has grown 140 percent in the last 15 years—10 times faster than the workforce in general. Gallup found that a third of employees would switch jobs to get the opportunity to work remotely.
A Stanford study revealed that remote workers are 13 percent more productive than employees working from the office. The same Global Workplace Analytics study reported that employers can save $11,000 per year for each remote employee. Based on these savings, AARP calculates flextime ROI between $1.70 and $4.34 and remote-work ROI between $2.46 and $4.45.
6. Financial wellness benefits ROI: 300 to 1500 percent
Before the pandemic, holistic financial wellness programs helped employees understand financial topics and issues to work towards financial wellness. The latest PWC Employee Financial Wellness Survey revealed that the pandemic has created an environment where employees need to learn more about how to recover financially and protect themselves in the future. This can include the following:
- Increasing retirement savings to get back on track.
- Creating a plan to contribute funds before the CARES Act expires.
- Building an emergency savings fund.
- Investing appropriately for the time horizon and risk tolerance.
Enrich user data from 2019 shows that employees who used their employer’s financial wellness benefit increased both short-term and emergency savings, were more diligent at paying off credit cards and contributed more money to their retirement plan.
Research indicates that traditional financial wellness plans have an ROI of $3. Enrich found that digital financial wellness solutions have an ROI of $15 or more, attributed to increases in productivity, 401(k) participation and on-time retirement and decreases in absenteeism, HR administrative costs, payroll taxes, healthcare premiums, on-the-job accidents and employee turnover.
