Are benefits the key to happy employees?

August 9, 2011
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Employers large and small know turnover can be costly. But keeping workers and keeping them happy aren’t necessarily the same thing.

A recent study from insurer MetLife found that just 44 percent of employees at firms with fewer than 500 workers reported having a strong sense of loyalty to the company, down from 62 percent two years ago. Larger companies had a 50-percent loyalty rate.

Quibble with MetLife’s definition of a small business if you must, but one conclusion rings true nevertheless: Employee retention will be a challenge as the economy recovers—and that could hit smaller firms especially hard.

“One person leaving a small company could have a significant impact, versus 100 leaving a huge company,” said Chris Woolard, a senior consultant at Indianapolis-based business consulting firm Walker Information. “And the most likely [workers] to leave are the top talent.”

In the short term, disgruntled staffers are less likely to take on more responsibilities for the common good, he said. “They’re already stretched so thin, they’re just trying to get by,” said Woolard, who studies employee loyalty.

Eventually, they’ll leave, he said—or cause enough morale issues that managers will show them the door.

But Woolard didn’t agree with MetLife’s suggestion that employers beef up their benefits to satisfy workers. “Sometimes, that could be what’s trapping employees” in jobs they no longer enjoy, he said.

What do you think? Are pay and benefits the key to keeping employees happy, or do workers care more about quality-of-life issues like a manageable workload?

  • Yes, and . . .
    Good benefits, good pay and things that aid quality of life are all important and what employees want can change as they enter different life stages, so an employer must give consideration to all the above. Ask employees what they want. The good thing about quality-of-life benefits is that they often cost little or nothing, so small employers can really compete in this area. Sharing company information (on values, mission, financials, etc.) so all employees are "in on things" and know what the expectations are, offering flexible work schedules, allowing employees autonomy, having employees supervised by enlightened supervisors/managers who've abandoned the old command-and-control style, opportunities for professional development, recognition, being treated with respect, and allowing employees to work on creative projects of their own choosing for a designated period of time each month, cost very little but pay big dividends in regard to preventing turnover and, in the case of allowing time for creative projects, can actually be a boon to the bottom line, as evidenced by the success Google has had with its 20% time program. It's all about, how much do I as an employer really care.

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