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 1. Your business matters
 2. Trends and Insights
 3. How to create employee benefit packages that help you recruit and retain

3 min read

3 minute read
May 05, 2022


HOW TO CREATE EMPLOYEE BENEFIT PACKAGES THAT HELP YOU RECRUIT AND RETAIN

Your business depends on assembling the benefits that current and potential
employees want and need.



How much would it cost you to replace a super-skilled, super-valuable employee?

Experts say the tally is about one-third an annual salary—if not more for
experienced or highly specialized workers.

Those costs—and keeping the employees you have and attracting new workers—is
very much on the mind of small and midsize businesses. According to recent
research by Principal®, retention and recruitment remain two key employer
concerns.

Competitive pay always serves as a draw. But keeping pace with larger employers’
salary and wage options may not be doable. Luckily there’s another lever you can
pull to help you gain an edge: employee benefit packages that are in tune with
what the market demands and people want. That same Principal research found that
employees say feeling valued and receiving improved benefits are among the best
ways to retain or recruit them, right behind increased/competitive salaries.

“When you’re trying to attract and retain employees, the more you show you care
and that you’re in it with them, the more it can inspire a happier, healthier,
and more productive workplace,” says Mark West, national vice president of
business solutions for Principal.

How do you create employee benefit packages to match your business, your budget,
and your employees? We have ideas.


1. TALK TO COLLEAGUES AND MENTORS ABOUT BENEFIT PACKAGES IN THEIR WORKPLACE.

Network ties—including organizations you belong to, groups you volunteer with,
and associations you’re a member of—can help you learn what’s working for other
small and midsize businesses.

“You’re really competing with everyone in the current environment. The more you
understand what other business owners are offering out there, the better
positioned you’ll be to hire and keep top talent,” West says.

Colleagues’ insights can help with brainstorming outside traditional benefits
(think employer-sponsored retirement accounts and health insurance). For
example, the Principal Financial Well-Being IndexSM found 33% of employers plan
to increase mental health benefits. “Initiate some conversations to find out
what others are offering, or what they didn’t offer before that they feel like
they need to offer now,” West says.


2. ASK JOB CANDIDATES OR FORMER EMPLOYEES ABOUT THE BENEFITS THAT MATTER.

If you’ve made an offer that’s been turned down, or find yourself with a valued
employee who’s decided to leave, the next question to ask them is, why?

“One of the things you might find out is that they were offered benefits that
you might not have even considered,” West says. “Those questions help you
understand what it takes to make someone feel valued enough to stay or to join
your company.”

Get five ideas for attracting and retaining top talent.


3. ENGAGE EMPLOYEES IN THE BENEFITS CONVERSATION.

Customizing benefits for your workforce requires knowledge about who your
employees are and what they value. “A 25-year-old may have student loans, while
a 55-year-old may be saving into their own individual retirement account to
catch up on savings,” West says. “Understanding what your employees want is
critical to your success.”

Dig deep into these insights. It turns out that many employers have a perception
gap between how they think employees feel about benefits and how those same
workers perceive benefits. For example, 72% of employees want at least one
additional benefit, but only 47% of Principal small and midsize business clients
offering benefits are interested in adding them in the next 12 months.

A few ideas to initiate conversation:

 * Survey questions that allow employees to rank both existing benefits and
   potential new benefits
 * Discussions with a representative group of employees about benefits
 * Longer one-on-one interviews with department representatives


4. ADAPT, THEN ADAPT AGAIN.

Benefits, says West, are a continuous conversation. They may change as your
business changes, particularly as you grow and add employees. Benefits may also
evolve as your employees gain tenure with your company; what was important to
them five years ago may not matter today. “You can set and communicate some
customized benefit goals, too,” West says. “Establish benefits you want to add
this year that your employees want, and benefit goals you have in one year, five
years, and so on.”


WHAT’S NEXT?

 * How does your benefits package stack up against the competition? Use the
   Principal® Benefit Design Tool to find out.

Attracting & retaining my workforce


About the Principal Financial Well-Being IndexSM

The Principal Financial Well-Being IndexSM surveys business owners, decision
makers and business leaders aged 21 and over who work at companies with 2 –
10,000 employees. The nation-wide survey, commissioned since 2012, examines the
financial well-being of American workers and business employers. In response to
COVID-19, the Well-Being Index was transformed from an annual survey to a
quarterly pulse, offering three waves, revisiting questions and measuring
sentiment regarding timely issues in the small and midsized business
marketplace. In the first pulse of the Well-Being Index in 2022, the employee
audience was added to the survey to compare and contrast key ideas and sentiment
from employers. The survey was commissioned by Principal and conducted online by
Dynata from March 11-23, 2022, with a total of 500 business owners, and decision
maker participants and a total of 250 employee participants. The research report
focuses on providing a holistic perspective on key trends and timely issues in
the small and medium business market.

Principal developed a dedicated portal for employers designed to help business
handle the effects of COVID-19 and a challenging economy in the months ahead. To
learn more visit Navigating Business Now.

This document is intended to be educational in nature and is not intended to be
taken as a recommendation.

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