Organizational Wellness

Strategic Benefits Strategy for Employee Retention and Engagement Long-Term

Last Updated Sep 19, 2024

In a job market hotter than a freshly microwaved burrito, it’s no surprise that companies are struggling to attract and retain employees.

One of the biggest offenders that’s making potential and current employees seek greener pastures is one-size-fits-all compensation packages. Today’s workforce is looking for more than just a paycheck — they want a workplace that cares about their whole self, from health to wealth to work-life wellness.

This is where a custom benefits package really shines. By mixing traditional perks, modern offerings, and customized goodies, companies can offer benefits for employee retention that keep employees around for years to come.

The Power of Benefits: Beyond Compensation

As much as a high salary is a welcome part of any job’s compensation package, it’s not the only thing employees are after. A fat check might turn heads, but it’s the benefits package that often seals the deal and keeps employees around for years to come. As revealed in Wellhub's State of Work-Life Wellness 2024 report, 93% of workers consider their wellbeing at work to be equally important to their salary, highlighting that total compensation isn’t just about the money.

From traditional perks like health insurance and retirement plans to modern offerings like wellness programs and flexible work arrangements, benefits speak volumes about a company’s values and commitment to its workforce. Throw in some customized perks tailored to your employee’s unique needs, and you’ve got a job offer that's hard to turn down.

Key Benefits to Fuel Retention and Engagement

There are tons of benefits out there, and it can be difficult to even keep up with the newest trends. However, you don’t have to offer every single benefit. A solid benefits package will be tailored to your employees’ needs, likely mixing traditional, modern, customized, and intangible benefits.

4 Types of Critical Employee Benefits: Traditional, Modern, Customized, and Intangible

Traditional Benefits

Of course, traditional benefits are a great place to start. Although they’re not the only kind of benefits available today, they’re still the backbone of any company’s benefits package. This includes healthcare, retirement plans, and other essential parts of a benefits package. Let’s take a look.

Healthcare

Let’s start with the heavyweight champion of benefits: healthcare. And that’s no exaggeration — health insurance is the benefit employees want the most, according to a 2022 SHRM survey. That means investing in your team's fantastic health insurance plan is sure to be appreciated. Some plans to consider are:

Medical: Because nobody wants to choose between routine surgery and rent. Comprehensive medical coverage typically covers hospital visits, prescriptions, and preventive care. It shows you care about their wellbeing and not just their work performance.
Dental: Keeping those pearly whites shining brighter than your company’s future. It provides coverage for routine check-ups, cleanings, and procedures like fillings or crowns.
Vision: Helping employees see the beautiful opportunities your company offers. Literally. Clear vision means they won’t miss a single detail of that awesome benefits package you’re providing.

Retirement plans

Because you want your employees to dream about their retirement years, a solid retirement plan is a must. In fact, retirement plan benefits are the most sought-after benefits after health insurance, according to a Human Interest survey. Some of the most common forms of retirement planning benefits are:

401(k): This is a tax-advantaged savings plan where employees can contribute a portion of their salary, often with employer matching. 401(k)s are the most popular retirement account among workers, according to the U.S. Census Bureau, so you can’t miss them at your company.
Pension: The OG of retirement plans, still kicking in some industries. It’s a traditional retirement plan where the employer promises a fixed monthly retirement amount.

Paid time off

A generous paid time off (PTO) policy is a cornerstone of any enticing benefits package. There are no federal requirements for PTO, according to the U.S. Department of Labor, but many companies offer it because of how powerful it is. To remain competitive, consider offering:

Vacation: Paid days off for employees to use as they choose, whether for travel, personal relaxation, or personal projects.
Sick leave: This is PTO but specifically for health-related reasons, allowing your employees to recover without losing income (and without spreading it to the rest of the office!).
Holidays: Paid time off for nationally recognized holidays gives employees time to celebrate without checking emails.

Insurance

Lastly, insurance is the safety net that shows your employees that their long-term wellbeing is important to you. Because life can be unpredictable, but benefits don’t have to be. Two you may want to include in your benefits package include:

Life insurance: Provides a financial award, usually a lump sum or recurring monthly payments, to an employee’s designated beneficiaries in the event of the employee’s death. It shows that you care about their loved ones, too.
Disability insurance: Offers income protection if an employee becomes unable to work due to illness or injury.

Modern Benefits

Okay, time to move over, traditional perks! Offering modern benefits is important to keep up with the times, especially if you want to attract and retain Millennial and Gen Z talent. Here’s what you need to know about the benefits that are hot right right now.

Flexible work arrangements

The holy grail of modern benefits: flexible work arrangements. According to Wellhub's State of Work-Life Wellness 2024 report, employees whose current work environment matches their preferred setup are more likely to report that they're thriving. Plus, nine in 10 workers enjoy flexible work arrangements, according to a Deloitte survey. This is almost like the ice cream cone of benefits — everyone loves it!

Remote work: Allows employees to work from anywhere with an internet connection, including at home, from a beautiful seaside resort or their grandma’s house.
Flextime: Gives employees the benefit of setting their own work hours within certain parameters. Perfect for night owls and early birds alike.
Compressed workweeks: Condenses the standard 40-hour workweek into fewer days, often four 10-hour days instead of five 8-hour days.

Wellness programs

Let’s talk about keeping your employees in tip-top shape, because a healthy employee is a productive employee. The relationship between employee wellness is significant and well-documented, according to a study published in the Frontiers of Public Health journal.

Gym memberships: Offering free or discounted gym memberships is a great way to motivate employees to get active, helping them to break a sweat without breaking the bank.
Mental health support: Provides access to mental health services, meditation apps, or stress management workshops.
Healthy snacks: Consider stocking the office with healthy food and ditching the chips in the vending machine. Keeps hangry employees at bay and energy levels high.

Professional development opportunities

Now, for career climbers and knowledge seekers, it’s a good idea to consider professional development benefits. Employees are more engaged and productive when employers support their personal and professional development, according to a Harvard Business Review study. Here’s how:

Training programs: Consider offering in-house or external courses to improve job-related skills. It keeps your team sharp and up-to-date.
Conferences: Sending employees to conferences and industry events can be great for networking and learning. It’s the grown-up version of field trips.
Tuition reimbursement: Your company can help cover the cost of higher education related to an employee’s job, turning your workforce into a brain force.

Employee recognition and rewards programs

Lastly, let’s not forget to give credit where credit’s due. Employee recognition and rewards programs are big parts of keeping employees happy. Because who doesn’t love a pat on the back? Here are some ideas:

Bonuses for exceptional work
Peer-to-peer recognition platforms
Awards ceremonies or regular shout-outs (did someone say “Dundies”?)
Points system redeemable for perks or prizes

Get More Out of this Employee Benefits Series:

What Benefits Do Employees Value Most?

Employee Benefits Guide for HR Leaders

Top 6 Employee Benefits Trends for 2024

HR Guide to Benefits Strategies That Attract & Retain Top Talent

How to Build an Inclusive Benefits Plan That Supports Every Employee

How to Optimize Your Employee Benefits Strategy

How to Build a Competitive Benefits Package that Wins You Top Talent

Why Are Benefits Strategically Important to Employers Today?

Maximize Benefits ROI: Data-Driven Strategies for HR Leaders

Customized Benefits

Let’s face it, one-size-fits-all benefits are so last season. Today’s workforce craves perks that speak to their unique need and lifestyles. Here’s what customized benefits can look like:

Pet insurance: Fluffy’s pet bills shouldn’t eat into your employee’s savings. Offering pet insurance is just like health insurance but for the four-legged family members.
Student loan assistance: Help your employees crush that college debt faster than they can say “forbearance.” Offering this benefit can really make you stand out, as only about 5% of workers had access to student loan repayment benefits in 2023, according to the U.S. Bureau of Labor Statistics.
Parental leave: Paid time off for new parents to bond with their newborn children. It’s like giving parents a golden ticket to focus on what really matters without worrying about missing paychecks.
Onsite childcare: Employer-provided childcare facilities at or near the workplace can really make a difference. Parents can focus on work while knowing that their children are well taken care of, without spending college tuition prices on daycare.

Intangible Benefits

While tangible perks are great, it’s often the intangible benefits that truly make a workplace shine. These are the elements that transform a job into a career and a workplace into a second home. Here are some of the benefits with the biggest impact:

Positive company cultureand values: A set of shared beliefs, attitudes, and practices that define the organization’s performance. A positive culture shapes the organization’s personality and plays a big role in whether an employee stays or leaves.
Opportunities for growth and advancement: Clear career pathways and promotion opportunities within an organization can help motivate employees to stay at a company and improve performance. When your people can see that their future is bright, they’ll put their best foot forward.
Strong leadership and management support: Having a hotline for the decision makers, minus the hold music, can be transformative. When leaders are accessible and supportive, employees feel like their needs and opinions matter.

Crafting a Winning Long-Term Benefits Strategy

Turning your benefits package from a bland soup into a five-star meal isn’t as hard as it may sound. It’s time to put on your chef’s hat and whip up a benefits strategy for engagement that’ll have your employees savoring every bite. Here’s how:

Align Benefits With Company Culture and Values

Think of your company culture as the secret sauce that makes your organization unique. When benefits align with this sauce, magic happens. For example, it would make sense for a tech startup that values innovation to offer cutting-edge health and tech benefits, while a green company could offer eco-friendly commuter perks.

Understand Your Workforce

Each company’s workforce is different, and each benefits package should serve its user base. When employees see their values reflected in their benefits, they’ll be able to take advantage of what matters to them most. But you don’t have to guess what your employees are into. Employee surveys are great for figuring out what your team actually needs. Pair that with some HR analytics, and you’ll be able to hit a home run with your benefits offerings.

Communicate Clearly and Transparently

Having a stellar benefits package and not communicating it well is like having a secret dessert menu and not telling anyone about it. It’s time to shout those benefits from the rooftops — or maybe just the company intranet. Regular benefits seminars, easy-to-read guides, and maybe even a dedicated benefits hotline can turn office jargon into easily digestible snacks.

Regularly Review and Adapt

The only constant in life is change, and benefits should be no exception. Treating your benefits strategy like a living, breathing entity that needs regular check-ups and oil changes. Regular feedback sessions, annual reviews, and staying on top of industry trends can help keep the benefits package fresh and attractive to your employees.

Measuring Success and Making Data-Driven Decisions

Even if you design a benefits package with the best intentions, you won’t know how your team receives it unless you measure the right key performance indicators (KPIs). But with literally hundreds of potential KPIs out there, how do you know where to begin? Here’s how to measure success and make decisions that’ll have employees cheering and CFOs nodding in approval.

Track Key Metrics

There are a handful of KPIs that all HR professionals could benefit from tracking, no matter their goal. These can help you gauge just how happy and engaged your employees are, which is often a reflection of a company’s culture and benefits. Tracking these long-term will help you spot trends and see how your benefits are doing. Notice an improvement after introducing a new flexible work arrangement? That means your efforts are paying off.

Employee Engagement KPIs

Employee Net Promoter Score(eNPS): This is your workplace’s Rotten Tomatoes score. Your eNPS measures how likely employees are to recommend their workplace to others. High scores mean employees are spreading the word faster than office gossip. Low scores mean it’s time to get to the bottom of what’s going on.
Employee satisfaction surveys: These surveys collect feedback on all aspects of the work environment, culture, leadership, and development opportunities. They offer an opportunity to dig deep into what’s going on inside your employees’ minds.
Pulse surveys: Short, frequent surveys to gauge real-time sentiment on specific topics or initiatives. They’re great for measuring how your employees feel about a specific benefit.
Absenteeism rate: This is the corporate equivalent of taking attendance in school. It tracks the frequency of unplanned absences for any reason. High rates might mean it’s time to make work more appealing to keep your team engaged.
Productivity metrics: These asses output, efficiency, and goal attainment, which can be linked to motivation and engagement levels. They show whether employees are working smarter, harder, or just looking busy while planning their next vacation.
Participation in voluntary activities: See who’s showing up to the party (aka company events) even when it’s not mandatory. High participation rates might mean food is a hit, or maybe employees actually enjoy each other’s company.
Internal promotion rate: Track who’s climbing the corporate ladder faster than a squirrel up a tree. High internal promotion rates mean opportunities are blooming like flowers in spring.
Employee recognition programs: Having initiatives that acknowledge and reward employee achievements helps people see that their actions have consequences — like a bonus or an office perk.

Turnover KPIs

Measuring turnover KPIs can help you understand how attractive your company is and how much employees enjoy working there. This will tell you how popular you are in the job market and, once employees have chosen to work with you, how long they’re happy to stick around. Here are some ideas of turnover KPIs to track:

Turnover rate: This is the grand total of employee exits calculated as a percentage of the total workforce over a specific period of time. For example, a yearly turnover rate of 2% means that you lose two out of 100 employees per year, on average.
Voluntary turnover rate: This metric specifically tracks employees who choose to swim to other seas. High rates might mean that employees are finding better opportunities elsewhere.
Involuntary turnover rate: Tracks terminations or layoffs. A few bad apples here and there are normal. But a high involuntary turnover rate might mean that the company policies, processes, or training aren’t effective at promoting productive employees.
Retention rate: The flip side of turnover, showing how many employees choose to stick around. High retention rates mean your workplace is a great place to work.
Time to fill vacancies: Tracks how long it takes to replace a departing employee. Long periods might mean your talent pool is more of a puddle. Or your total compensation package is in dire need of an upgrade.
Regrettable turnover rate: This one tracks the loss of your workplace MVPs. Losing one or two superstars stings like a bee. But consistently losing your top performers can be lethal for any organization.
Exit interviews: These feedback sessions are gold mines for understanding why employees are saying “thank you, next” to your company. They can help you understand whether your competitors are offering higher salaries, better benefits, or both.
New hire turnover: Tracks how many newbies bail before they’ve even figured out how to use the office coffee machine. High rates could mean your job ads aren’t very representative of the actual job or that your onboarding process needs some serious rethinking.

Using data to inform decisions

Now, it’s time to turn those metrics into magic. Tracking metrics is one thing. But any experienced HR professional knows that it’s what you do with them that matters. Even if you’ve never done any HR analytics before, getting some actionable insights from raw data is easier than you might think. Here’s what you can do:

Analyze trends and identify areas for improvement

Think of data trends as breadcrumbs leading to HR solutions. Is that spike in voluntary turnover trying to tell you something? Maybe it’s a sign that your competitors are offering remote work options. Or perhaps that dip in eNPS scores is telling you that the new management style is stressing your employees out.

Connecting the dots between metrics and changes in company operations and benefits offerings can help you paint a crystal-clear picture of what’s happening.

Make adjustments to the benefits program as needed

Once you’re armed with turnover insights, it’s time to fine-tune your benefits program. Is the gym membership perk collecting more dust than a treadmill after the New Year’s resolutions rush? Maybe it’s time to swap it for a mental health app subscription that employees will actually use.

Or if exit interviews are consistently mentioning lack of growth opportunities, it might be time to beef up those professional development budgets. Remember that a benefits program should be as flexible as a yoga instructor — ready to bend and stretch to meet changing needs.

Elevate Employee Retention Through Strategic Benefits Design

Designing a winning benefits strategy is more than just throwing everything at the wall and seeing what sticks. It’s about crafting a tailored approach that resonates with your employees, aligns with your company values, and drives organizational success. From traditional benefits to customized perks and intangible rewards, a well-rounded benefits package can be your secret weapon in attracting, retaining, and engaging top talent.

A comprehensive employee benefits program can amplify the impact of your benefits strategy. By integrating holistic wellness initiatives into your wellness package, you can create a supportive environment that resonates with your employee's deepest needs. This approach can help employees feel valued, reduce turnover rates, and increase employee engagement, all with a positive ROI. As revealed in Wellhub's Return on Wellbeing 2024 report, 95% of companies tracking ROI see positive returns on their wellbeing programs and more than half of them see a return over 100% on their wellbeing investments.

Not sure how to transform your benefits strategy for increased employee retention? Wellhub is here to help. Our Wellbeing Specialists can work with you to deliver a powerful wellness program that will make leaving your workplace harder than quitting sugar!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!