Solving the HR Conundrum: Strong Labor Market – High Turnover
So you’ve found yourself stuck in that same dreaded loop many businesses are in today: The HR Conundrum! (dramatic music plays) Like many, you’ve probably figured out that finding a solution to such a problem isn’t so easy as realizing it exists.
After all, the national unemployment rate fell to 3.7 percent, its lowest level since 1969, and remained unchanged the following month, according to the U.S. Labor Department. In addition, The Bureau of Labor Statistics recently reported that roughly 250,000 jobs were created in October. Among them were 36,000 jobs in healthcare; 30,000 in construction; 25,000 in transportation and warehousing and 42,000 in leisure and hospitality.1
Unfortunately, all-time low is coupled with its archenemy, you guessed it, all-time high. Particularly, the country’s rate of total workplace turnover. A harrowing 19.3 percent of employees left their jobs in 2018—rising nearly a full percentage point from 2017 and more than 3.5 percentage points since 2014, based on a recent survey report.2
Chances are you won’t be able to avoid this turnover conundrum all together. But, if you have a plan in place, you can be better prepared to keep those key employees.
Cost
Calculating the cost of losing an employee includes more than just the cost of recruiting a replacement. There are a lot of different factors that may not immediately come to mind, such as:
- Lost productivity and knowledge from the resigned employee.
- Lowered morale from team members affected by the loss.
- Any service or product errors/detriment resulting from the resigned employee’s absence.
- The cost of onboarding and training a replacement.
It makes sense that the turnover cost calculations can be so high. Depending on the level of the employee, turnover can cost the company anywhere from 30% to 50% of the employee’s salary for an entry level position and 200% to 400% of salary for employees who are higher level or have a specialized, hard-to-find skillset.3
Satisfaction
It’s no secret that employees with high benefits satisfaction report high job satisfaction. Consider also that the #1 benefit according to employees is health insurance.4 One can get a pretty clear idea of where they should be headed. Let’s delve even deeper.
- Over 40% of workers said their company loyalty would increase if their benefit options were customized to meet their individual need.
- 56% of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job.
- Over half of U.S. employees have left their jobs after finding better benefits elsewhere.5
The Solution
Now that we’ve made our way through the tunnel that is the HR Conundrum, we can get to the matter at hand: the solution! With current primary health insurance prices so high, putting more money toward health benefits can be difficult to wrap your head around. However, there’s a type of supplemental health insurance, called expense reimbursed insurance, that can serve as a powerful turnover solution.
Let’s investigate, shall we?
- This type of coverage can be carved out by class, so it can be offered to just those employee groups at-risk of leaving.
- There are different levels of coverage that you can choose from to best work with your needs and budget.
- It’s more cost-effective than a similar bonus because it allows for premiums to be tax deductible for the company and benefits non-taxable for employees.*
Rather than scrambling behind the HR Conundrum to fill lost employee positions, proactively invest in your current employees’ happiness and satisfaction with supplemental expense reimbursed insurance.
Don’t wait to utilize such a powerful tool. Find out what all the buzz is about now.
Sources:
*This is not local, state or federal tax advice as each person and company is unique. It is recommended that you seek the independent counsel of a professional tax adviser.