This story is brought to you by Gary Taffet via the USA Herald Platform
When whittling down the budget, it can be easy for companies to target benefit programs right off the bat. After all, according to the U.S. Department of Health and Human Services, the average employee health care premium comes in at a whopping $5,300-plus – and that doesn’t even factor in what they pay in deductibles and coinsurance over the year.
Insurance is expensive. It’s just a fact of life – or our economy, at least. And as such, many employers consider it negotiable or even expendable when times get tough.
It’s easy to see why, too. For a big firm, cutting benefit costs by just a few percentage points could save thousands upon thousands of dollars a year, and that’s money that can be put toward sales efforts, marketing, product development and more seemingly important tasks at hand.
But with something like benefits in mind – not to mention the overall health of your employees – it’s important to think not just of the up-front (or even annual) cost savings. In reality, paring down insurance coverage has many more long-term effects than that, and they’re infinitely more valuable than a few thousand dollars in the bank.
The Problem with Paring Down
Whether you’re looking at pulling back on your coverage or getting rid of benefit programs altogether, it’s really important to look at the bigger picture. Sure, switching to a less-than-stellar policy can save some money in the short-term, but what is the impact on your organization in the longer run?
The truth is changing up your employees’ benefit packages doesn’t just impact your bottom line. It ripples through your entire company, affecting the culture, the quality of your staff, your productivity and efficiency, and dozens of other factors that dictate your overall health and wealth.
Here are a few things to consider:
- Recruitment – From a recruitment standpoint, a good benefits package is one of the best ways to entice a quality candidate. If they’re deciding whether to work for you or a competitor, you can bet they’ll choose the one that pays best and safeguards their family the most comprehensively. While losing out on one or two candidates might not seem like that big a deal, it can have a big impact when you consider what happens after those candidates turn you down: They go straight into your competitors’ arms, giving them a leg up on you and your target audience.
- Turnover – Employees stay at their jobs because they’re satisfied, they feel valued, and they feel cared for. And offering your staff members quality benefits coverage? That’s the best way to improve all those sentiments. It shows that you not only appreciate your employees but that you want to invest in them – and that means a lot to most workers. In the end, this means you retain your best talent (and for the long term), and it cuts down on your hiring and recruitment costs which, for a big firm, can often be sky-high when turnover is fast.
- Performance – Who do you think is better primed to be a good employee? A sick, cold-ridden worker who’s putting off going to the dentist or one who has access to the preventative care and medical guidance they need to be healthy? You can rest assured the better-insured worker is going to be most productive, most effective and the most physical present in the office. Often, the costs-savings on sick days (specifically, the sick days that healthy people DON’T take) are enough to justify the cost of a good plan on their own.
There’s more to consider than just the bottom line when it comes to paring down or eliminating insurance coverage. Sure, there is an initial cost-savings on the premium, but in the long-term, the expenses of forgoing quality coverage tend to outweigh those savings many times over. It’s how organizations lose skilled workers, fall behind their competitors and see an unhealthy, unproductive workforce that holds them back.
Gary Taffet is the founder & co-owner of Reliance Insurance Group, LLC. He is an expert in disability, property and group insurance and previously served as the Chief of Staff to Gov. James E. McGreevey of New Jersey.