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During the lean periods when finances are stretched too tight, and you need a quick solution, employee benefits are often first on the chopping block. While this might seem like a necessary course of action, it can be a detrimental shot to the team morale.
Evaluate your employee benefits
Reducing or eliminating employee benefits can affect motivation and amplify “retaliatory behavior,” says Sigal Barsade, professor of business management at the University of Pennsylvania. He continues, “This retaliation can take on a psychological form, such as less commitment to the job, or a behavioral form, such as working less hard.” As a result, the amount of productivity and efficiency in the workforce slows.
If you have no choice but to reassess employee benefits to address cash flow issues, be judicious and strategic about what you cut and what you keep. For example, consider a new Bring Your Own Device (BYOD) program and get rid of company cell phones. In this case, your employees may be disappointed, but chances are, this won’t be a huge hit for morale or company culture.
The areas below, however, are employee benefits you should never remove from the budget if you want to maintain employee dedication and satisfaction in the midst of financial constraints.
Don’t cut back on employee recognition
Did you know that 23 percent of employees call their manager/company “horrible” at recognizing them? Employees desire more recognition for their hard work. It costs no extra money to commend a team member’s performance in front of their peers at the weekly meeting. What’s more, that simple but meaningful action can inspire that employee, and the others who hear it, to keep up the great work. When the entire staff knows they’re valued, appreciated and recognized, their commitment to your business is solidified—no additional expense required.
To amplify this perk, in lieu of losing others, initiate an employee recognition program. Check out the three principles of a great appreciation program as you get started.
Don’t cut back on employee flexibility
One affordable perk that will resonate with your employees is flexible work time. With the option to work remotely or structure office hours around family obligations, employees may be more productive and feel more motivated. In fact, American Express staff who telecommute are 43 percent more productive than their onsite colleagues, reports Global Workplace Analytics, and IBM has lowered office real estate costs by an notable sum of $50 million.
If working remote isn’t an option for your company, consider offering flex hours. In this case, all employees need to be in the office for a certain period of time every day, say 10am-12pm, but otherwise, they can come in early and leave early, or vice versa, as long as they put in a full day.
Don’t cut back on employee healthcare
While paring down employee health insurance benefits can seem like an immediate money-saver, this is actually one of the quickest ways to lose your team’s dedication. In the United States alone, 56 percent of professionals say that medical coverage is a main factor in whether they remain at their current job or seek a position elsewhere, according to the Society for Human Resource Management (SHRM). As you consider how you can cut back while still offering health insurance, consider working with an agent. The cost for you versus the employee premium varies state by state and plan to plan, making it hard to find the best balance between cost and benefit.
According to group health insurance experts, HealthMarkets, an agent will provide advice on which options are best for you and your employees, along with knowledge of the industry and immediate answers—instead of being on the phone for hours, an agent can do that for you. All while cutting down health insurance costs for the business.
Don’t cut back on employee rewards
Tangible rewards can make employee recognition even more impactful—and those rewards don’t need to be expensive to be effective. Some creative and unique extrinsic rewards include a catered lunch, gift cards, free massage, or admission at a local workshop, concert, or athletic event.
If you’re not sure which rewards your employees want, start by polling them. Offer a variety of options and then choose the top three as rewards for regular recognition. You can also get some ideas from the blog post, What Rewards Do Employees Really Want
Don’t cut back on employee paid time off
This might surprise you, but an estimated 37 percent of the American workforce is more inclined to prioritize vacation time over a raise salary, based on a Glassdoor survey. In fact, 58 percent of workers would agree to a salary reduction if it meant extra vacation time, reports USA Today. Time off is not only wanted by your team, but gives them the time they need to relax and return to work refreshed and ready to keep up the great work, making it a crucial employee benefit to hold onto.
Cutting employee benefits? Be careful
Many businesses undergo seasons of financial setback, but to retain employees and keep them satisfied, it’s critical that you maintain the employee benefits that your staff members value the most. While it can be tempting to eliminate some of these in the interest of saving money, the future ROI will be at the cost of lost employees, followed by the expensive undertaking of hiring new ones. Keep the most important employee benefits first and foremost, then cut back where you can.
To learn more about how to offer the right perks, check out Achievers’ e-book, “How to Incentivize the Modern Workforce.”
