What is the number one challenge facing business owners today? Ask and many will tell you that it is finding and retaining top talent. Compensation can go a long way, but employees are growing more interested in purpose and a culture of conscious capitalism when choosing their employer.
When it comes to offering employee benefits, don’t stop at just “competitive.” Unique and meaningful benefits – ones that are valued by employees – can show the kind of culture your company is offering. Here are three of the most common mistakes that employers make when engaging with their employees and potential hires on the topic of benefits:
Assuming That Your Employees Want The Benefits Offered
According to a study quoted in The Harvard Business Review, it was found that, “after health insurance, employees place the highest value on benefits that are relatively low-cost to employers, such as flexible hours, more paid vacation time, and work-from-home options.” 1 The article continues to discuss other trends that job seekers are looking for when it comes to employer benefits and company culture.
Never assume that your employees or prospective talent will actually want or desire the benefits package that you are offering to them. Every company culture is going to be different, so our recommendation is that you try surveying your current staff on the benefits that you’re providing to them. By doing this, you will get a sense of which benefits your current team likes, dislikes, or is even aware of what it is being offered. You may be surprised at what you find!
Thinking That Your Employees Understand Their Benefits
The simple fact is that the financial health of your employees is not an HR issue, it is a business issue. 37% of employees feel their personal finances are distracting at work. About half of those employees say they are spending up to 3 hours per week dealing with these personal issues.2
When your employees do not fully understand their benefit options or the implications of their choices on their financial goals and future, they will most likely start to consider their work benefits as not being as valuable. Or worse, they may disengage and not take advantage of benefits that can have a real impact on their lives, such as a 401(k) or a company-provided match.
While it is important to have a great benefits package to attract top talent, it is far more valuable if your team actually understands their options. You want to help them come to trust their plan and align their career decisions with their goals.
Even with a robust HR team, personal conversations about money and financial goals are not likely to be common. This can be a challenge, especially when you want to see your employees truly benefit from what you have to offer. Whether we are talking about choosing a traditional IRA vs. Roth, or strategizing stock option plans, these decisions could be made in an unbiased and informed manner if a financial planner were available to give advice to employees.
2 PWC Employee Financial Wellness Survey, 2016.
Expecting That Your Employees Have The Same Motivations As Owners
Incentives are everything! Compensation structure is a major tool to better incentivize employees to help the company succeed. Company ownership via stock options can change the dynamic of a firm’s culture from a team of staff “thinking like an employee,” to “thinking like an owner.”
For example, if you have an employee that is getting paid a fixed salary with no employee stock options, he/she has no incentive to go the extra mile for the company. However, if you give that same person some compensation tied to firm revenue growth (or any metric that fits your company’s goals), that employee is very likely to make a more motivated effort.
With respect to this topic, it is important to remember that your benefits offering does not only include health insurance, retirement plans, and casual benefits like bring your dog to work day. It also includes the employee’s compensation structure and company ownership opportunities. These are great benefits to examine as an employer because they can both (1) attract motivated employees and (2) help grow your business by aligning incentives between employee and employer. Again, it remains crucial that your employees actually understand the implications of any stock ownership, or else they won’t grasp the full value of this generous benefit.
Sean Condon is a wealth advisor with more than a decade of industry experience. He specializes in helping entrepreneurs build a culture of financial confidence by offering their employees unprecedented access to a CERTIFIED FINANCIAL PLANNER™ professional. Taking an owner’s approach, Sean does his best to understand the many elements of clients’ entrepreneurial journeys. He works in a technically competent and caring manner to reduce clients’ anxiety about money issues and serves as a fiduciary by always putting his clients’ best interests first. Learn more about Sean by connecting with him on LinkedIn. You can reach us by calling (844) 377-4963 or emailing Fifirstname.lastname@example.org. You can also book an appointment online here.