Employee benefits are a key element in human capital management, and their role in the recruitment and retention of employees is constantly growing. In recent years, there has been a trend towards individualisation of benefits offerings, allowing for better adaptation to the diverse needs and expectations of employees. One such solution is cafeteria-style systems, which allow employees to choose from a wide range of benefits. In this article, we will present an analysis of the impact of cafeteria systems on reducing employee turnover and specific benefits that can contribute to this process.
- Cafeteria-style systems and employee turnover
According to research[1] conducted by Willis Towers Watson, cafeteria-style systems are increasingly being used by employers to increase employee satisfaction and reduce turnover. Studies[2] show that companies using cafeteria-style systems observe a 23% decrease in employee turnover compared to firms that offer standard benefits packages.
- Key benefits influencing reduced turnover
Data analysis[3] points to several specific benefits that contribute to a decrease in employee turnover:
a) Flexible working hours – the ability to adjust working hours to an employee’s individual needs allows for a better balance between professional and private life, which affects satisfaction and loyalty to the company.
b) Remote working – remote workplaces and work flexibility are increasingly valued by employees, especially in the era of the COVID-19 pandemic. Employers who offer such solutions become more attractive in the eyes of potential and current employees.
c) Training and professional development – investing in the development of employee skills translates into increased engagement and loyalty to the company. Additionally, professional development affects the long-term success of the company by developing and improving employee competencies.
d) Health care programmes – offering employees health insurance and programmes promoting a healthy lifestyle is essential for their satisfaction and engagement. Employees who feel that their employer cares about their health are more likely to remain loyal to the company.
e) Pension schemes – attractive pension schemes affect the long-term satisfaction and loyalty of employees, especially for older generations who pay more attention to financial security in retirement.
- Practical tips for implementing cafeteria-style systems
Implementing a cafeteria-style system can be challenging for an organisation, but following these tips can help in the process:
a) Conduct an analysis of employee needs and expectations – understanding what your employees need and expect will allow you to tailor your benefits offering to their needs.
b) Develop clear criteria and rules for selecting benefits – employees should have clearly defined rules regarding benefits selection, so the process is transparent and fair.
c) Regularly update the benefits offering – employee needs and expectations change over time, so it’s important to regularly review and update the benefits offering to maintain its appeal.
d) Monitor the effects of the cafeteria system – track how employees use the cafeteria system, which benefits are most popular, and whether the system affects the reduction of employee turnover. Use data analysis to adjust the offering and benefits selection process to employee needs.
e) Communicate the value of benefits – employees need to be aware of the value offered by company benefits. Regularly communicating information about available benefits and their value to employees will help increase their engagement and loyalty to the organisation.
Conclusion:
Cafeteria-style benefits systems for employees are increasingly being used by companies as a way to increase satisfaction and loyalty, which translates into reduced turnover. Key benefits that influence decreased turnover include flexible working hours, remote working, training and professional development, health care programmes, and pension schemes.
To implement an effective cafeteria system, it is important to conduct an analysis of employee needs and expectations, develop clear rules for selecting benefits, regularly update the offering, monitor the system’s effects, and communicate the value of benefits to employees. Good practices in implementing cafeteria-style systems can contribute to increased satisfaction and loyalty of employees and reduced turnover, ultimately affecting the long-term success of the company.
Sources:
