How Do Employee Benefits Impact Employee Productivity?

Thursday, March 28, 2024 18:32 Posted by Admin

The need to increase productivity is on the minds of many business owners looking to maximize revenue and grow their brands.

There is an entire industry that offers advice on how to increase employee productivity, and one of the most cited solutions to this issue is the benefits package. But how effective are employee benefits when it comes to increasing productivity? Does it actually work?

The answer is rather complex, but it’s worth taking a closer look at the subject to fully understand how your benefits package can influence employee productivity.

What Are Employee Benefits?

Employee benefits are all the additional perks a company is able to offer its employees apart from salary. Companies will create an employee benefits package as a way to motivate existing employees as well as attract newly qualified candidates.

The contents of the benefits package vary from business to business, but it can include:

• Group health insurance 
• Dental insurance
• Life insurance
• Leave options (sick leave, maternity/paternity leave, etc.)
• Paid time off
• Retirement benefits
• Wellness benefits, etc.

These types of benefits aim to help both the company and its employees.

People working for the company get to access an array of additional services aimed to support their wellbeing and health, while companies get to remain competitive in their field and continue to attract top talent. But is productivity improved through the package?

Research Has Often Shown That Productivity Is Not Influenced by Employee Benefits

Companies looking to improve productivity through benefits packages might not be very happy with the outcome. Studies have shown that in a lot of cases, a comprehensive employee benefits package has no impact on productivity.

What does improve, however, is employee motivation. Simply put, a good benefits package can serve as a strong incentive for employees, effectively improving employee retention rates and even the levels of satisfaction people have in their career or the company they work for.

While this may come as a surprise to many companies, productivity issues generally have nothing to do with the level of employee motivation and are most commonly caused by other issues in the company such as:

• The work environment
• Training opportunities
• Pay structure
• Diversity
• Ineffective internal protocol
• Use of outdated technology, etc.

Since the employee benefits package doesn’t address these factors, it’s not surprising that the packages will not make a major dent in the company’s productivity levels.

But a Good Package Can Yield a Lot of Benefits

While the benefits package might not influence productivity levels directly, increasing employee satisfaction with the company can certainly help create a more pleasant environment and allow companies to address low productivity more effectively.

A good package can help:

• Reduce employee stress regarding healthcare costs;
• Start creating a healthier company culture;
• Improve the relationship employees have with the company;
• Improve employee health and reduce the need for sick leave, especially thanks to preventative care services;
• Boost employee morale and happiness levels, etc.

This, of course, is on top of the benefits such packages can yield for a company, especially its abilities to attract top-tier talent and increase employee retention. Perhaps indirectly, but these benefits can also lead to an improvement of company productivity, especially in combination with stronger employee engagement efforts and workplace improvements.

Looking for Employee Benefits? Tailor Benefits Insurance Agency Is Happy to Help

Even if they are not directly linked, having a good group employee benefits package is one of the best ways to improve employee satisfaction and begin to increase productivity. If your company is looking to create a new package, the team at Taylor Benefits Insurance Agency is happy to assist.

As independent brokers, we routinely assist our clients in finding the type of benefits that best suit their individual needs. Our specialized support and knowledge of the business can be a veritable asset for you and your company, allowing you to quickly discover the very best solutions that the insurance market has to offer.

To get started, please call our team at 800-903-6066, or reach out online to get a free proposal for your benefits package.