CPA_Practice_Advisor_April_2020 - 32

A YEAR IN THE LIFE: PAYROLL

ACCOUNTANT

Which Health and Employee Benefits
Attract Employees?
By Chris D'Ambrosio

IN A COMPETITIVE job market with up to five generations in the
workforce, companies of all sizes must be able to attract and keep
great people. That's where benefits come in. Is your benefits strategy
relevant across multiple generations?
Employees looking for a new job, or
considering whether to stay with their
current employer, indicate that employee
benefits offerings are very important in
their decision. To learn more on this
topic, ADP, in partnership with SourceMedia Research/Employee Benefit News,
surveyed more than 5,000 employees of
small businesses as well as employees
open to new employment in businesses
of any size. The research findings offer
insights into which benefits have the
most impact on employee attraction and
retention and which benefits employees
are most likely to use.
With the high cost of healthcare, it
isn't surprising that 60% of employees
named healthcare as the most important
benefit they considered when deciding to
accept their current job, far outpacing paid
holidays (42%), paid vacation (42%), paid
sick days (41%) and access to a retirement
savings plan (39%).

COMPANY SIZE CAN PLAY A
ROLE IN BENEFITS ACCEPTANCE
Employees of companies with fewer
than 10 employees indicate that health
insurance (64%), paid vacation/personal
days (63%) and paid holidays (55%) would
influence them to accept a role at a new
company. Among employees of companies with 20 to 49 employees, 74% indicate
that health insurance would influence
them to accept a role at a new company,
followed by paid vacation/personal days
(66%) and sick days (62%). So, if you are a
company with fewer than 40 employees
and make the decision to offer health

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APRIL 2020 ■

benefits, you will be meeting a need that
is currently unmet for a large number of
job seekers, helping you boost your ability
to attract and retain top talent.
There are generational differences in
what employees want in a benefits package. For instance, only 57% of younger
employees-with presumably fewer
health issues-rank health insurance as a
wanted benefit versus 67% of Generation
X and Boomers.
Employees were also asked what benefits they want but don't have. Consider
that almost two-thirds (65%) of employees want bonuses, but only 33% currently
receive them. Generational data shows
the scope of the issue with spot bonuses:
■ Generation Z, 19% have, 42% want
■ Millennials, 13% have, 51% want
■ Generation X, 9% have, 54% want
■ Baby Boomers, 7% have, 54% want
And survey respondents offered
insight on the benefits they have versus
the benefits they actually use. The top
underutilized benefits are life insurance,
vision, paid bereavement, disability and
paid maternity leave.
This raises an important question.
Employers should look to see what benefits are offered and what their utilization
rates are, and ask themselves whether
it's worth the cost to continue offering
certain benefits if they're not being taken
advantage of.
Or they should ask themselves if they
need to start efforts to increase awareness about the benefits offered, with the
aim of ultimately increasing employee
utilization to get the desired retention

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impact from offering them.
When it comes to company size, it's
not surprising there are differences in the
benefits offered to employees. In general,
the larger the company the more likely it
is to offer health insurance (PPO, HMO,
etc.). Consider the following breakouts of
company sizes offering health insurance:
Larger companies are also more likely
to offer incentive bonuses:
■ 12% of companies with 1 to 9 employees
offer an incentive bonus
■ 15% of companies with 10 to 19 employees
offer an incentive bonus
■ 20% of companies w it h 250 to 499
employees offer an incentive bonus
■ 23% of companies with 500+ employees
an incentive bonus
So, what does this mean for employee
benefits professionals? Healthcare
remains a highly coveted benefit by most
employees and job seekers. But there are
also other less-traditional benefits that
are worth exploring to attract and retain
employees. For example, 25% of Generation Z employees say that student loan
repayment assistance would influence
their decision to accept a position at a
new company
And money talks-bonuses are
important to employees so employers
may want to consider adding sign-on
and spot bonuses to their benefits mix. ■
Chris D'Ambrosio is Senior Vice President and
General Manager for ADP Insurance Services.
This article first appeared on the ADP Spark blog
https://www.adp.com/spark.

This article first appeared on the ADP Spark
blog: https://www.adp.com/spark/
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