Appeal to your Millennial employees by allowing them to customize their benefits packages.
Struggling with turnover among your younger employees? Consider revamping your benefits offerings, suggests Heather Romano, Managing Director of HR and Training for iVET360, a veterinary business consulting firm.
“When benefits are improved, turnover dramatically falls,” says Romano. “And only 30% of Millennials want benefits the way that they’re currently structured. Most of them would actually prefer a menu system.”
Browsing for benefits
In a menu system, employees receive certain base benefits and then customize their benefits packages by choosing from a menu of additional offerings.
To set this up, first choose three main benefits that every employee will receive a base amount of (typically health care insurance, 401K and PTO). Then create a “menu” of options that you think would appeal to your employees, such as additional PTO days (employers can cap these, Romano notes), tuition reimbursement or a gym membership, if available in your area.
“This way each individual employee can choose the things that matter most to them,” says Romano. For instance, those with pets could select an additional pet-care discount, while those with children might prefer childcare benefits or paid parental leave.
For an individual example of how this would work, see the box below. The technician in the sample scenario would have about $518/month to choose additional benefits from the sample menu. She might pick two additional days of PTO and a pet-care discount. Or, she could select a child-care subsidy, life insurance, a paid volunteer day and a gym membership. “A lot of hospitals think this sounds crazy when I first introduce this to them,” says Romano. “But over 50% of Millennials prefer this system.”
Restructuring your benefits offerings in this manner can offer direct rewards in the form of lowering costly turnover and making you a more attractive employer in the face of corporate competition.
“We have not kept up with other industries in offering competitive benefits,” says Romano. “The result is a turnover rate in our [veterinary] industry of 50% to 70%, with average annual turnover expenses of $46,250.” And that’s just for advertising, interviewing and training costs, she adds. It doesn’t include potential lost clients or the business repercussions of longer wait times and new faces in the hospital.
Many corporations have already started to move toward offering benefits structured with a menu system, says Romano. “The independent veterinary field tends to lag behind corporations,” she says. “This is one way we can jump in and be in competition with the corporations that could otherwise be stealing our employees.”
Interestingly, benefits matter even more than raises to most veterinary employees, according to iVET360 research. “In fact, 80% of your team would probably prefer a new or additional benefit to a raise,” says Romano.
Adding benefits is a manageable way to reward your team members. “If you can’t afford to provide 10% pay raises to your team, you can still give them $150/month toward a new benefit, which would represent a 5% pay increase to a $16/hour employee,” explains Romano.
PTO is particularly valuable to employees. An iVET360 survey found that 37% of veterinary team members would rather have more PTO than a raise. “If you can’t afford to give a raise this year, think about giving everyone one or two more days of PTO,” suggests Romano. “It will cost you a fraction of what a raise would cost, and it will make your team so much happier.”
Let’s say you have a technician who makes $46,500 in total pay, broken down like this:
Position: Veterinary Technician Total Pay: $46,500
Amount left to shop from a menu of benefits: $6,220 ($518/month)
Sample Benefits Menu
- Pet care discount: $150/month
- Employer contribution to family health insurance: $500/month
- Additional PTO days: $150/day/month
- Tuition reimbursement: $100/month
- Gym membership: $50/month
- Paid volunteer days: $150/day/month
- Paid parental leave: $500/month
- Life or disability insurance: $100/month
- Child-care subsidy: $200/month