What would you think if you looked at your paycheck this week to find that your employer had paid you in Kazakhstani tenges instead of U.S. dollars?
Even though tenges are a legitimate currency on the world market and easily converted to U.S. dollars, most of us would probably have the feeling we were holding something worthless.
It’s kind of like that when it comes to employee benefits. For years employers have struggled to find ways to get their workers to appreciate employee benefits.
That’s because the healthcare subsidies, vacation pay, sick time, and other benefits add up quickly and can often account for 50 percent or more of an individual’s paycheck.
But who values them like that?
Some do, but others don’t. Even in companies with lavish benefit packages designed to make their employees happy, there is grumbling that benefits are underappreciated.
Part of that is because companies simply haven’t done a good job of explaining benefits – or their value – to employees.
When a company explains to an employee that it spends equivalent to 15 percent of the employee’s paycheck just to pay for healthcare for a family of four, the message starts to sink in.
Yet, too many companies offer benefits such a tuition or retirement investment plans that are very important to the people who use them but not the general workforce that isn’t going to school or planning for retirement.
In human resources, they are very aware of the maxim that no matter how much an employee benefit can help an individual, it’s no good if it goes unused.
The Principal Financial Group has been trying to get companies to recognize that employee benefit packages are important. They’ve drawn on the experiences of the 100 companies who have won Principal’s “best practices” awards over the past decade.
And, it found overwhelming evidence that benefits are worth the investment by the company. Three-quarters of the 100 companies it studied report that benefits programs had a significant impact on retention and recruitment, two of the most costly obligations of employers. The surveyed companies said they averaged less than half the turnover of others in their industry.
They also revealed that exemplary benefit programs lead to stronger employee morale, greater competitive advantage, and better safety records.
“As one HR director puts it, you can’t have customer satisfaction without employee satisfaction,” says Angelia Herrin, special projects editor for the Harvard Business Review. “A good benefits program’s connection to employee security, motivation, and performance couldn’t be more clear.”
Just ask the employees. They feel benefits make a difference.
But economic times have ushered in some dramatic cost-cutting during the past three or four years. As healthcare costs rise, more employers are scaling back their coverage to hold costs in line.
Principal Financial offers a contrarian view. It says that employers who invest more in employee wellness programs today will be doing themselves and their employees a long-term favor by increasing wellness and controlling healthcare costs.
It’s as if the tenges on your paycheck just turned into dollars.