more employers are considering offering enhanced benefits to top talent, particularly at larger firms where turnover has been higher. (Photo: Shutterstock)
Businesses are struggling with employee turnover, as 97% of companies that experienced an increase in turnover over the past 12 months said the pandemic had at least some effect on those losses, according to a report by Principal. Almost half of respondents said the pandemic had a major impact on their turnover, with larger companies — those that employ 50 or more people — reporting the biggest losses.
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Principal polled over 1,000 business owners in January as part of a biennial survey that examines business owners' benefits strategies
Turnover is at its highest level since 2015, when just 11% of owners said they had an increase in job changes within their company, the report found. In 2017 and 2019, turnover increases were steady at 15%.
Benefits are an important part of owners' retention strategy, the report found. Almost two-thirds of respondents said benefits help improve retention, up from 58% in 2017 and 61% in 2019. When asked about their goals for their benefits packages, owners cited a number of goals that speak to their workforce needs, including the ability to attract and retain workers (42%), remaining competitive (27%), and offering an incentive to top talent (21%).
Related: Struggling to retain top employees? A benefits refresh that includes financial wellness could be key
In fact, more employers are considering offering enhanced benefits to top talent, particularly at larger firms where turnover has been higher. The report found 55% of owners in 2021 would like to offer more benefits to key employees than they currently do, up from 52% in 2019. Three-quarters of businesses with at least 50 employees are considering such a move, compared to 55% of those with between 10 and 49 workers, and 44% of small businesses.
The loss of key employees could have a significant impact on businesses, as they represent a larger share of their workforce. Thirty-five percent of businesses said they have at least four key employees in 2021, up from 23% in 2010 and 29% in 2012.
Other findings from the report show business owners are taking a proactive approach in 2021:
- Despite the uncertainty of 2020, owners are confident about their ability to achieve business goals. Eighty-seven percent say they will achieve business stability — a notable, but understandable, decline from 92% in 2019.
- More businesses are offering survivor income (74%), nonmedical/voluntary (74%), and health and wellness (67%) benefits than in 2019.
- Business owners are more likely to work with a financial professional to meet their goals, but they're growing increasingly more cost-conscious. Meanwhile, budget availability has the biggest influence on owners' benefit decisions.
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