Employees want better benefits, study shows they're willing to leave current job for better retirement options
One of the top reasons small business employees leave jobs is to get access to better benefits and retirement options, according to a new study by Zenefits.
Since they began studying the topic in the 1900s, analysts have identified countless reasons for employee turnover. But, how do businesses stay on top of which levers to pull, perks to offer, and policies to implement to stay relevant for an evolving workforce and multi-generational staff?
A July 2019 Zenefits poll of more than 600 businesses re-assessed employee turnover patterns, giving business leaders a modern lens of workforce needs, specifically within the small and midsize business communities.
According to data from Zenefits, the top five reasons employees quit their jobs are:
- Higher potential earnings
- Poor interpersonal relationships
- Personal life changes
- Better benefits packages (health, dental, insurance, and retirement)
- Promotion or increased job responsibilities elsewhere
67.8 percent of businesses admit they notice when an employee is about to quit, observing decreases in productivity (60.5%), sudden strange office behavior like gossiping (47.6%), and increased absence (50.6%) before an employee jumps ship.
But how do they prevent it from occurring?
Ultimately, whether a person quits or not is a personal decision. Things like failed “interpersonal relationships” and “life changes” are outside of the control of an employer. But, things like fair pay, better benefits options, and job responsibilities are well within a business’s control.
So what should businesses do?
Studying the “why employees are leaving” list could offer insights for ways to keep your business both competitive in recruitment and poised for long-term staffing success.
For the sake of this article, we’ve narrowed the focus to areas where employers have real authority for change, and then offered a few practical steps to get started. In essence, these are the three most effective areas employers can refine to better retain top talent.
1. Offer fair, competitive pay
Competitive pay is a relative term dependent on the market. Things like geography, seniority of role, similar companies in the area, and cost of living are all important factors in being competitive. To be assured you’re offering the right rates for your area and job opportunities, try using compensation software or tools that give insights to reasonable pay ranges for your positions.
Arming yourself with knowledge about what’s realistic allows you to approach interview negotiations from an informed and confident place. It can also help keep your balance sheets in check.
Here are a few companies that help with compensation management:
2. Provide comprehensive benefits, including a workplace-sponsored 401(k)
As Steve Parrish, co-director of the Retirement Income Center at The American College of Financial Services, puts it, “whereas in the past families had a sizeable part of their wealth in home equity and bank savings accounts, these days they are dependent on their 401(k)s and other company retirement plans.”
Employees want to be well compensated, but they also want the security of insurance, healthcare, and the ability to stash money away during their careers. Because of the traditional cost structure, small businesses are typically at a disadvantage when it comes to offering 401(k) plans—according to Guideline, just ten percent of them do. But, there are ways small and midsize businesses can still offer the plans their employees want.
Check out retirement plans that specifically cater to smaller firms. Guideline, for instance, provides more than 7,500 companies with 401(k) plans, 99 percent of which are small businesses.
3. Provide career growth options and expanded responsibilities
While small businesses don’t have tons of rungs in their corporate ladders, they do tend to hold a more strategic advantage of flexibility compared to bigger firms. For example, small business workers often get to try on many different kinds of hats during their tenure.
How can you use this to improve your retention?
Discover your employees’ career goals by asking them what they are. Conduct employee surveys, or simply talk to staff during 1:1 meetings or performance reviews to unearth individual career aspirations. Then, use those insights to build career paths that reward your staff with professional development unavailable elsewhere.
By allowing your workers to help shape their own professional journeys, you may dramatically improve your retention rates.
Boost your retention rates
There’s nothing like staffing issues to keep you from growing your business. Good hiring is extremely important, but keeping those talented employees matters equally as much.
For more tips and strategies to boost retention and curb quits, consult Zenefit’s Turnover Prevention Checklist, with 15 real-life retention tactics and “how-tos.”
Jean Spencer is the Managing Editor at Zenefits, a full service HR and payroll company for small and mid-size businesses. Her research and writing has appeared in Entrepreneur, Inc. Magazine, The Wall Street Journal, and Social Media Today.
Disclosure: The views and opinions expressed in this interview do not necessarily represent the policies and positions of Guideline. The content of this interview is for informational purposes only, and should not be interpreted as tax, investment, financial, or other advice on behalf of Guideline.