These days, while benefit packages are important for all employers, they are particularly important for your smaller clients, for a number of reasons.
One relates to intellectual capital, which continues to increase in importance for employers. In fact, the value of intellectual capital is often considered second only to cash flow. However, the loss and potential loss of intellectual capital is often underestimated by employers, who fail to realize that it is not only lost as a result of employees' leaving their jobs, but also as a result of employee on-the-job disengagement, lagging productivity, plummeting morale, and absenteeism.
When a large employer loses a valuable employee, the impact is probably felt to one degree or another. However, when a small employer loses a valuable employee, the results can be devastating. According to the 2011 Aflac WorkForces Report, conducted in partnership with Harris Interactive, while medium and large companies identified "increasing employee productivity" as their third most important HR issue, small companies identified it as their most important HR issue.
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That is, the success of small business is directly related to employees' ability to be productive, present and focused. One thing that can have a detrimental impact on employee productivity, and therefore on business operations, relates to personal and financial concerns that employees have, which often occupy their time during work (and also after work, often leaving them exhausted and distracted the next day at work).
The Aflac report found that thirty-eight percent of employees responding to the survey reported having health issues that affect their ability to get their work done. On average, these employees admitted that 16 percent of their work productivity is lost due to concerns about personal and financial issues.
What are some of the specific concerns that employees have these days that distract them from their jobs, or worse, encourage them to seek employment elsewhere, where benefits packages are more available? According to the Aflac report, 52 percent of employees report being "not very" or "not at all" prepared to pay for out-of-pocket expenses that are not covered by their current insurance, 42 percent are coping with a financial crisis, 33 percent have less than $500 to pay for out-of-pocket expenses associated with a health issue, and a mere 22 percent feel well-prepared for retirement.
One potential solution? Make a wider variety of benefits packages available to employees. In fact, the Aflac report found that many small companies are unknowingly intensifying the problem of the loss of valuable employees (either through actually leaving their jobs, or not being completely "present" and focused when they are working) by failing to offer a wide variety of benefit plans to their workforces.
The Aflac report notes that small business owners generally have the best of intentions when it comes to their employers, often viewing them as members of their "extended family." In fact, among companies of all sizes, only small businesses named "taking care of employees" and "doing the right thing" as the top two objectives for their benefits programs.
However, unfortunately, the survey also found that small businesses operate under at least two false assumptions, which get in the way of their achieving their goals for benefits packages:
- The survey found that small businesses are more likely than medium and large businesses to say that they would NOT consider adding new voluntary insurance plans. Their assumption: Employees have no interest in applying for voluntary coverage.
- Many small business owners are simply unaware of the personal and financial problems that their employees are experiencing and how additional benefits offerings could help alleviate these concerns. The Aflac survey found that 51 percent of small business leaders believed that their existing benefits programs meet their employees' needs either extremely well or very well.
However, employees participating in the Aflac survey think otherwise. More than half of them (57 percent) said they would be likely to apply for voluntary insurance plans if offered by their employers. Their top three reasons included: the opportunity to choose from more coverage options, the chance to apply for coverage that meets their needs, and the option to own more comprehensive coverage.
To help employees protect their finances and their futures, help your small-business clients must better align their intentions with employee needs by delivering more effective and comprehensive benefits packages. By doing so, they will protect their companies against declining productivity, and, at the same time, improve their chances of retaining their all-important intellectual capital.
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