A thoughtful approach to employee benefits can help employers protect their investment in people while creating a workplace where employees see a future.
By: Trip Wagner
Benefits Consultant
Spartan Wealth Management | Employee Benefits
Employee benefits and retention are closely connected considerations for business owners seeking to build a stable, engaged workforce. Although compensation remains and important factor in employment decisions, the quality of an organization’s benefits, its workplace culture, and the experience of working within the company can all influence whether employees envision a long-term future with their employer.
For business owners, the departure of a valued employee represents more than an open position. Institutional knowledge leaves with that individual, established relationships may be disrupted, and remaining team members are often asked to absorb additional responsibilities. Recruitment and onboarding require time and resources, while productivity may take months to recover.
These challenges invite a broader examination of how organizations invest in their people. A thoughtfully developed employee benefits strategy, supported by a healthy working environment, can contribute to employee satisfaction while reinforcing the organization’s broader workforce objectives.
The Business Case for Employee Retention
Employee turnover carries both measurable expenses and less visible organizational costs. Recruiting, interviewing, training, and onboarding replacement employees require direct financial investment. Meanwhile, the departure of experienced personnel may affect customer relationships, team productivity, and operational continuity.
The financial implications are particularly relevant for smaller and midsized businesses, where individual employees often hold substantial institutional knowledge or manage relationships that cannot be readily transferred.
Research from Zywave’s 2023 Attraction and Retention Employer Pulse Survey, published in its 2024 Employee Retention Preview, found that approximately 53% of surveyed employers reported at least some difficulty retaining existing employees. Among the retention strategies employers were exploring, 53% identified improving compensation, while 17% selected improving healthcare benefits and 15% identified new or expanded voluntary benefits.
Although these findings reflect employer priorities during the earlier survey period, they illustrate the interconnected nature of compensation, benefits, and workforce planning.
The potential cost of turnover also changes how employers might evaluate their benefits investments. A benefits decision that appears expensive when considered only within the annual renewal budget may warrant a different assessment when viewed alongside recruitment costs, lost productivity, and the importance of retaining experienced employees.
For leadership teams, understanding these relationships can provide a more complete picture of the organization’s investment in its workforce.
How Employee Benefits and Retention Are Connected
Employee benefits have evolved considerably beyond traditional medical coverage. Today’s workforce includes employees navigating different financial circumstances, family responsibilities, and stages of professional development. A benefits program that recognizes these differences may provide greater value than one developed primarily around historical offerings or industry conventions.
The Society for Human Resource Management’s 2025 Employee Benefits Survey found that 88% of surveyed employers considered health-related benefits very or extremely important. Retirement savings and planning benefits, along with leave benefits, received the same designation from 81% of respondents. Flexible working benefits were rated highly by 68%.
These figures reflect employer assessments of benefits priorities rather than a direct measurement of employee retention. Nevertheless, they demonstrate the importance organizations continue to place on comprehensive employee support.
Healthcare Affordability and Access
Medical coverage remains a foundational component of employee benefits, although the value of that coverage depends considerably on its affordability and accessibility.
Employees may evaluate a plan through the practical experience of using it, including deductibles, out-of-pocket expenses, prescription coverage, provider networks, and access to care for family members.
Mercer’s 2025 Health on Demand research, based on more than 2,000 U.S. employees, found that 41% of respondents valued coverage for mental healthcare. The findings reinforce the importance of considering employee well-being when evaluating the broader benefits offering.
Employers may wish to examine how their existing plans address preventive services, mental healthcare, and the financial burden associated with accessing treatment. Employee Assistance Programs and telehealth services can also be considered where appropriate.
Financial Security and Long-Term Planning
An employer’s contribution to an employee’s financial security can extend well beyond the paycheck.
Retirement plans, employer matching contributions, disability coverage, and eligible health savings arrangements can help employees prepare for circumstances that may otherwise create financial strain. Depending on the workforce, educational assistance and other voluntary benefits may also deserve consideration.
The relevance of these offerings can change as employees move through different stages of life. Understanding those changing needs allows employers to evaluate whether their benefits continue to provide meaningful support.
Flexibility and Family Responsibilities
For many employees, the ability to manage professional responsibilities alongside personal obligations contributes to the overall employment experience.
Paid leave, predictable scheduling, and flexible work arrangements may provide meaningful support for employees caring for children, aging parents, or family members experiencing illness.
The appropriate approach will differ by organization. Manufacturing operations, professional services firms, and customer-facing businesses have different scheduling requirements. Even where remote work is impractical, employers may find opportunities to improve scheduling predictability or provide greater flexibility within operational constraints.
Workplace Culture Gives Benefits Their Context
A competitive benefits program can contribute to employee satisfaction, but its value is experienced within the larger working environment.
Employees who feel respected, understand what is expected of them, and believe their contributions are recognized may have stronger reasons to remain with an organization. Conversely, persistent management problems, excessive workloads, or limited opportunities for advancement can undermine the appeal of otherwise attractive compensation and benefits.
Workplace culture is shaped through everyday experiences. How managers respond to challenges, whether employees have opportunities to develop professionally, and the degree to which leadership communicates openly all influence how individuals perceive their place within the organization.
For smaller businesses, these considerations may be especially significant. Close working relationships can create a strong sense of belonging, but leadership decisions and workplace pressures may also have an immediate effect across the organization.
A healthy workplace requires ongoing attention to management practices and the needs of employees. Benefits can reinforce that commitment when the policies and working environment reflect the same priorities.
Professional Development and the Opportunity to Grow
Employees considering their future with an organization may also be evaluating whether that organization offers room for advancement.
Professional development opportunities can include formal training, mentorship, additional responsibilities, and support for relevant credentials. Smaller organizations may have fewer traditional advancement positions, but meaningful professional growth can still be supported through broader responsibilities and opportunities to develop new capabilities.
For employers, investing in the development of existing employees may also help address skills gaps that would otherwise require external recruitment.
The Often-Overlooked Role of Benefits Communication
An organization may invest substantially in employee benefits without employees fully understanding the value of what is available to them.
Annual enrollment materials frequently emphasize plan selection and deadlines. Although these communications are necessary, they may leave limited opportunity to explain how benefits support employees throughout the year.
More consistent communication can help employees understand their coverage, locate available resources, and make informed decisions about their benefits.
Employers might consider providing periodic educational materials, clear explanations of voluntary benefits, and accessible information about their total compensation programs. Employees should also have opportunities to ask questions and receive appropriate guidance.
When benefits are clearly explained and readily accessible, employees are better positioned to recognize and use the resources their employer provides.
Measuring the Value of a Retention Strategy
Employee retention deserves the same thoughtful evaluation applied to other significant business investments.
A useful starting point is an examination of historical turnover, employee tenure, recruitment expenses, and feedback gathered through employee surveys or exit interviews. These measures may reveal patterns that are not apparent when benefits decisions are considered independently.
Employers can also review participation in existing benefits, compare plan offerings with relevant market benchmarks, and evaluate whether employees understand the resources available to them.
For organizations considering enhancements, the objective should be to identify areas where changes may create meaningful value within an appropriate financial framework.
An expanded benefits offering may be worthwhile for one workforce, while another organization may benefit more from improved communication, greater flexibility, or changes in management practices.
There is no universal formula for employee loyalty. Meaningful progress begins with understanding the workforce and making decisions that reflect both employee needs and organizational realities.
Building a Workplace Worth Staying For
An organization’s people represent an important investment in its long-term success. Their experience, relationships, and accumulated knowledge contribute to the continuity of the business, often in ways that are difficult to quantify.
Employee benefits can play an important role in protecting that investment, particularly when they are developed with a clear understanding of workforce priorities and supported by a healthy organizational culture.
For business owners, the opportunity is to examine how benefits spending, employee experience, and broader business objectives work together. That perspective can lead to more informed decisions about where resources may have the greatest value.
Spartan Wealth Management’s Employee Benefits Team works with employers to evaluate employee benefits programs in the context of their business objectives and workforce needs.
Our team can help organizations examine their current offerings, consider available alternatives, and develop a thoughtful approach to benefits planning. Click HERE to connect with the Spartan Wealth | Employee Benefits Team and schedule a complimentary benefits review and analysis.
Need more information? Download our complimentary guide “The Value of Staying: Employee Retention & Benefits Assessment”
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SOURCES:
Zywave, 2024 Employee Retention Preview, pub. 2024
SHRM, 2025 Employee Benefits Survey, pub. June 30, 2025
Mercer, 2025 Health on Demand U.S, Report, pub. May 14, 2025
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