ROI on Employee Benefits
Benefits such as 401K matching, low health insurance premiums, paid time off— all of these cost you money, money that you most likely want back in some way. Measuring ROI can be difficult, so we advise you to set milestones or checkpoints for yourself to see how the benefits have affected your company over a given period. For example, set a time frame of one year and set regular intervals throughout the year to measure employee retention, absenteeism, employee performance, quality of new hires, company morale, profit growth, and any metric that is quantifiable.
In order to properly evaluate these checkpoints, you need to work hard to keep track of changes and collect as much data as possible.
Once you know what to look for from your benefits overall, you need to look into which benefits have the best overall benefit for your company. It is common to invest in something that seems good at first, but ends up as a money-guzzler in the long run. It is not always easy to quantify individual benefits, but if you keep track of your investment correctly, you can. When you first decide to offer benefits, you need to approach it like any new company initiative and evaluate how to best spend your company’s time and money. How will this affect company wages? How much company time will be spent putting these benefits in place? Offering employees a 401K option just for the sake of having a 401K option is ill-advised. Instead, you need to look into your company’s individual needs and find a benefits package that fits your employee’s needs and your budget.
Time To Evaluate
After you have fully incorporated your employee benefits package and had time to measure results, then you can properly evaluate your ROI. If you want an accurate reading of your ROI, you need to track metrics over time; what they cost, how they are used, how do they benefit your company or your employees. This can be done a number of ways. Offer an employee satisfaction survey to get feedback that will help you gauge the way each employee is interpreting their benefits. As you reach different checkpoints following the implementation of your benefits plan, you can look at how they have affected things at your office. Look into whether or not employees are missing more or less work, if they are happier with their work, and if they are more willing to give to your company. When employees leave, hold an exit interview to see their reasoning for going and whether or not there is an issue you can address based on their input.
Look at what benefits matter most to each. See if the addition of certain benefits correlates with more initiative from your employees. For example, if you see employees begin to work harder, you know they are happy at their jobs. After that, it is important to look into costs. If there is a specific benefit or benefit package that costs your company a lot, see if it has value to your company. If it is just draining money, get rid of it. Some benefits packages, such as dental on top of medical, can be pricey for you and employees. However, if your employees are more satisfied with dental as an option, you know it is worth the expense to keep them happy and productive.
All employers want to see tangible results from their employee benefits. If you are able to see a tangible reward from any benefits, then you will know they are good for your company. If you see an improvement in company culture that correlates to any specific benefit, that is something you want to keep. IF you understand your company and know your end goal, evaluating ROI on employee benefits is easier than you think. Overall, if you keep track of costs, uses, tangible results and more, it is easy to measure ROI for each benefit you offer your employees.