February 19, 2020 | By Elia Hagen
Becoming an employer of choice means taking a hard look at what a company does for its people. Employers of choice have exceptional employer brands; the company has been recognized as having a fantastic working environment and is known by job seekers as a great place to work. A LinkedIn study found that a strong employer brand reduces turnover by 28% and cost per hire by 50%. The same study found that 72% of recruiting leaders worldwide considered the employer brand to have a significant impact on hiring.
While there are a few simple changes that will put a company on the road to becoming an employer of choice, the truth is that business owners need to be ready to commit to the resources required to attract and retain the right employees.
There is no precise path to becoming an employer of choice. There are, however, a few key characteristics shared by companies with this title:
Creating a strong, positive company culture is a start—but it's not enough.
Lots of companies have great cultures, but employers of choice stand out even more. The environment is important, but a great benefits package will tip the scales in your favor.
For 79 percent of candidates, the benefits package is a major consideration when it comes to whether they'll take a job. Great benefits show you're willing to invest in your employees, you care about them and their life outside of work, and you're making it as easy as possible for them to live a great life while working for your company.
Competitive benefits cost money. Whether the company provides paid vacation, a great health care plan, on-site child care, gym memberships, free meals, transportation allowances, and more, there has to be a budget for those benefits, which may cut into already-lean margins.
It's possible to get better benefits when you partner with a Professional Employer Organization (PEO). PEOs are considered the Employer of Record for payroll and tax purposes, which means you gain access to their healthcare and benefits plans which were negotiated on behalf of thousands of employees. When compared to a competing company of the same size, you're able to offer a less expensive or a more comprehensive benefits plan.
Further cost savings accumulate from PEO’s ability to consolidate the number of HR-related providers a company needs. One PEO relationship can replace your payroll service providers, benefits administration providers, HR advisors, 401k providers, as well as third party administrators for Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA).
In addition to providing an enviable benefits package, there are a few more low-cost ways to become an employer of choice:
Although such measures don't have to cost a lot, hiring the in-house HR staff required to implement changes is often too expensive for many small businesses. Even with these low-cost changes, you cannot become an employer of choice without a significant investment in employee benefits.
Because of the strong financial advantages, nearly every business has aspirations to become an employer of choice. To get to this special status, steps can be taken which are free or not very resource-intensive. However, this is often not enough to get the intended result. The truth is that employers of choice invest heavily in their employees when it comes to recognition, feedback, growth opportunities, and benefits. Given the limited resources smaller businesses often face, an easier, faster and more cost-effective path can involve partnership with an outsourced HR organization, such as a PEO.
Elia is a Human Resource Consultant with over 25 years of experience. She specializes in employee relations, training and development, legal compliance, and HR consultation.