Winning the War on Talent Through Better Benefits

November 2024

Even as voluntary labor force turnover subsides from the heights seen during the “Great Resignation,” employee retention remains a high priority for employers. The Work Institute estimates that voluntary turnover cost U.S. companies almost $900 billion in 2023. According to a recent survey by Guild, 81 percent of business leaders are concerned about losing high performers.

Their concerns may be justified. Recent LIMRA research finds that only half of employees are happy with their jobs in 2024 — down 6 percentage points from two years ago. Other attitudes related to job satisfaction have declined by similar margins, including willingness to recommend one’s employer to others, perceptions of fair pay, feelings of connection to coworkers, trust in management and perceived opportunities for career advancement.

In addition, only 47 percent of workers feel committed to staying with their current employers, either for the short-term or long-term, while 22 percent are actively looking for new positions. The rest hover somewhere in between, open to new opportunities but not actively looking. Younger workers, including Millennials and Generation Z, are substantially more inclined to consider leaving their employers.

Strategies for Boosting Loyalty

Regardless of age, however, there are steps employers can take to promote employee loyalty. A variety of positive employment attitudes are associated with greater commitment to staying, and employers can encourage many of these through their actions.

For example, workers who feel their employers value their contributions are 7.7 times more likely to plan to stay with their company for a long time, compared with workers who do not feel their contributions are valued. This implies that recognition programs can be an effective tool for increasing retention. Similarly, employees who believe their employer cares about them are 5.8 times more likely to want to stay, making this the second most predictive factor.

However, most employers have a long way to go in demonstrating to workers that they care. Only 38 percent of employees believe their company is invested in their mental or physical well-being (Figure 1). Even fewer (30 percent) say their company is invested in their financial well-being. The LIMRA-EY Wheel of Wellness finds that financial wellness is a high priority for employees — second only to physical wellness — so it is concerning that workers are least likely to feel their companies are invested in this domain.

The Role of Benefits

Workplace benefits can serve as a vital tool for employers looking to address these shortcomings. Offering a comprehensive and affordable benefits package that meets a variety of employee needs is an unequivocal way for employers to demonstrate they care about their workers across the various dimensions of wellness.

Many benefits offerings are available to support financial well-being in particular, including life insurance, disability insurance, supplemental health benefits, retirement plans and formal financial wellness programs. Employers might consider offering more of these benefits, enhancing the ones they already have and communicating about these benefits in a way that clearly highlights the connection between these coverages and employees’ financial security. By shoring up these offerings, employers can help workers feel more cared for and supported, which is likely to increase their desire to stay.

In fact, many employees directly acknowledge the connection between benefits and their loyalty to their companies. Forty-one percent of workers say their benefits packages make them much more inclined to stay with their current employers, while another 21 percent are somewhat more inclined to stay because of their benefits. As expected, workers who are highly satisfied with their benefits are more likely to endorse this as a reason for staying.

Employees who are satisfied with their benefits also tend to be happier with their jobs overall. However, only 43 percent of workers say they are very satisfied with their benefits at present, leaving substantial room for improvement. Satisfaction increases when employees have a wide variety of benefits available, and their employers communicate information about those benefits well.

A Competitive Advantage

Companies striving to reduce turnover and increase employee loyalty must take action to encourage workers to stay. Workplace benefits can serve as a key component of this strategy by demonstrating to employees that their employer cares. Comprehensive and affordable benefit offerings also support workers’ holistic well-being, freeing them up to perform at their best. With most employees less than fully satisfied with their current benefits offerings, companies that excel in this area will be well-positioned to succeed in the war for talent.

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