Health Insurance barely edged out retirement plans as the top employee benefits an employer can offer to keep employees long-term, according to a new study released today from Paychex, Inc.
Health insurance was the top answer, cited by 64% of survey respondents, while retirement plans finished a close second at 62%.
Financial wellness benefits (41%), such as tuition reimbursement, professional development stipends, student loan repayment, and child-care support, ranked third among benefits most important for employee retention.
Interestingly, the research shows that the importance of mental health benefits is on the rise among younger generations. Gen Z (23%) is significantly more likely to say that mental health benefits would make them more likely to stay at their organization long-term than Millennials (14%), Gen X (5%), or Baby Boomers (3%).
The study explores the challenge of employee retention and the key drivers motivating employees when making choices about their career paths. With 4.3 million people quitting their jobs as recently as May 2022, the survey of more than 600 U.S. workers provides insight employers can use when developing strategies for increasing retention.
“… the only way to really know what will keep them in their position for the long haul is to ask. Even so, employers rarely do it.”
Jeanne Meister, Future Workplace
“Research shows that almost half of employees say they do not want to change companies within the next 12 months, but that is never a guarantee that those employees will stick around long-term,” said Alison Stevens, director of HR Services at Paychex. “The Great Resignation may be slowing, but that doesn’t mean companies can take a passive approach. Rather, they should use this opportunity to offer programs, perks, and benefits that meet employees’ diverse needs.”
The study—which was conducted in partnership with Future Workplace, an Executive Networks member company—revealed a gap between the employer perceptions and employee sentiments related to retention. When asked about factors (other than compensation and benefits) that contribute to their decisions to stay in with their company, 30% of respondents indicated that perceived job stability is their most important motivator and 60% ranked it in their top three. Feeling that the work was meaningful (45%) and having a passion for their field (33%) were the second- and third-most-popular answers, respectively. Reasons related to employers’ brands (19%), corporate culture (19%), and products (13%) are the least important to employees, despite many companies’ focus on these elements in their recruiting and retention efforts.
“Perhaps the most compelling takeaway from this study is the confluence of factors that affect employees’ decisions to say with a company,” said Jeanne Meister, the founder of Future Workplace and executive vice president at Executive Networks. “Each employee presents a different intersection of the demographics outlined in the study, and the only way to really know what will keep them in their position for the long haul is to ask. Even so, employers rarely do it. We found that only 29% of employees have had what we call a ‘stay interview.’ These open conversations with employees can give HR staff insights into the unique values of their employee populations to increase retention, even in a difficult labor market.”
For more insights from the survey, view the full research report.
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