In today’s competitive job market, attracting and retaining top talent is more challenging than ever. You’ve already invested heavily in recruiting, training, and developing your employees—so it makes sense that you wouldn’t want to see them walk out the door. One of the most effective ways to retain your best staff and attract new talent is by offering a comprehensive and competitive benefits package. These benefits provide employees with valuable financial security and foster engagement, satisfaction, and loyalty.

Here’s why companies offering healthcare, relevant life insurance, and flexible perks enjoy lower employee attrition rates, and how these benefits can positively impact your business.

Why Employee Benefits Matter

Companies that provide a robust benefits package, including healthcare and life insurance, see significantly increased retention rates. But beyond this, employee benefits can also:

1. Enhance Morale and Engagement: Offering life insurance, healthcare, and other benefits can improve employee morale and engagement. Employees who feel secure, both in their health and their financial future, are more likely to remain committed to your company.
2. Provide Financial Support in Times of Need: Life Insurance provides financial security for employees and their families in the event of death or illness. This support can reduce stress and help employees feel more at ease in their roles.
3. Streamline Benefits Administration: Employee benefits platforms can centralise all perks and benefits, reducing administrative burden and making it easier for HR to manage everything in one place.
4. Contribute to Job Satisfaction: Offering health insurance, paid time off (PTO), retirement plans, and tuition reimbursement sends a clear message to employees: You value their well-being, personal development, and work-life balance.

The True Cost of Employee Turnover

Studies from UK Money indicate that the average employee turnover rate is 16.8% annually, one of the highest in Europe. This high turnover rate has significant financial consequences. The cost to replace an employee earning £25,000 a year can reach over £30,600, factoring in recruitment, training, and lost productivity (Oxford Economics).

Additionally, research by the Department for Education UK reveals that businesses in the UK invest £42 billion annually in employee training—an average of £1,530 per employee. Repeated turnover means businesses are continually spending money to rehire and retrain, ultimately affecting their bottom line.

Offering a competitive benefits package is an investment that pays off in the long run by reducing turnover, improving job satisfaction, and increasing employee engagement. When employees are happy with their benefits, they’re more likely to stay and contribute to the success of the business.

Key Factors Affecting Employee Attrition

Several factors contribute to why employees leave their jobs. Some key insights from the Randstad Q4 Workmonitor Pulse survey of 7,000 workers in the US, UK, Australia, Germany and the Netherlands include:

• Onboarding: 79% of employees report that onboarding programs help them understand company culture. A great onboarding experience makes employees 69% more likely to stay.
• Compensation: 65% of employees believe they can find better compensation elsewhere, making competitive pay and benefits crucial to retention.
• Travel Distance: Employees who travel more than 20 km to work have a turnover rate 7.3% higher than those who commute less than 1 km.
• Role-Specific Turnover: Turnover rates can vary significantly by role. For example, care workers experience a 36.1% turnover rate, while registered nurses have a turnover rate of 44.1%.

Why a Competitive Benefits Package Is Essential

1. Health Insurance: A Key to Retention and Satisfaction

Health insurance is one of the most valuable benefits you can offer employees. It not only supports your employees’ well-being but also demonstrates that you care about their health and future. Providing healthcare in ensures employees can access quality care when they need it, reducing stress and improving overall satisfaction with their job.

By offering healthcare, you can also attract top talent who might otherwise seek employers with better healthcare benefits. In competitive industries, this can be the differentiator that makes your company stand out from others offering similar compensation but without the health benefits.

2. Key Person Insurance: Protecting Your Business and Employees

What happens if a key employee—someone critical to your business’s success—suddenly leaves or passes away? Key Person insurance provides financial protection for your business in such circumstances, ensuring that you can cover the costs of replacing this vital person and keeping your operations running smoothly.

This insurance can be used for:

• Covering wages during the transition period until a replacement is found.
• Paying off outstanding debts, such as business loans, to prevent financial strain.
• Recruitment costs for finding a new employee and covering associated hiring expenses.
• Support the Key Persons family at a difficult time.

Key Person insurance helps protect the business from the financial disruption that can occur following the loss of a crucial team member, giving your company peace of mind during difficult times.

3. Relevant Life Insurance: A Unique Benefit for Employees

Relevant Life Insurance is a form of life insurance that allows employers to provide a tax-efficient death-in-service benefit to employees. This benefit is paid for by the employer but offers employees peace of mind knowing that their family is financially protected in the event of their death. Relevant Life Insurance is a great way to show your employees that you care about their well-being both in and out of the office.

Unlike personal life insurance, Relevant Life Insurance is typically tax-deductible for the business, which means that it’s an affordable way to offer your employees financial security without significantly impacting your bottom line. It’s a win-win for both employers and employees.

The Impact of Competitive Compensation and Benefits

While competitive salaries remain a key factor in employee retention, offering meaningful benefits is just as important. According to research, more than 50% of workers expect employers to provide salary increases outside of the normal pay review cycle to help cope with the rising cost of living. This highlights the growing importance of benefits in attracting and retaining talent.

Furthermore, research from Randstad reveals that employees today value more than just salary—they want benefits that contribute to their work-life balance, career growth, and personal well-being. Employers that fail to meet these expectations risk losing their best employees to competitors offering more attractive packages.

Benefits That Save Money and Boost Productivity

A strong benefits package doesn’t just improve employee satisfaction—it can save your business money. Companies that invest in employee retention save significantly on recruiting, training, and onboarding costs. By retaining experienced employees, your company enjoys higher productivity and greater cohesion within teams, leading to better results overall.

Improving Your Employee Compensation and Benefits Strategy

To create a competitive employee benefits package, you need a well-thought-out strategy. Here are some tips for improving your compensation package:

• Stay Competitive: Research market standards for salaries and benefits to ensure your compensation is in line with industry expectations.
• Understand Your Competitors: Know what benefits and salaries other companies in your industry are offering, particularly in your region. This will help you tailor your package to be more attractive to top talent.
• Include Meaningful Benefits: In addition to competitive salaries, include benefits like health insurance, flexible working arrangements, and career development opportunities. Today’s employees expect more than just a pay cheque—they want a benefits package that supports their work-life balance and career growth.

The Bottom Line: Speak to a Broadbench Adviser

In a world where employee expectations are shifting, offering a robust benefits package has become essential for attracting and retaining talent. Whether you are considering Business Healthcare, Key Person Insurance, Relevant Life Insurance, or other benefits, a comprehensive benefits strategy can improve employee satisfaction, reduce turnover, and ultimately save your business money.

Speak to a Broadbench adviser today to find the best coverage for your business. They can help you design a tailored benefits package that aligns with your company’s goals and supports your employees’ well-being, all while ensuring you get the best value for your investment.

By prioritising employee benefits, you not only protect your business and your team—you build a foundation for long-term success.

Speak to an expert