What Employees Want: Benefits That Drive Retention

Not all benefits are created equal when it comes to retention. Some offerings employees appreciate; others actually influence their decision to stay. Understanding the difference is crucial for benefits strategy.

What the Research Shows

Employee surveys and exit interview data consistently highlight certain benefits as retention drivers:

Health insurance quality remains the top retention factor. Employees will stay in jobs they otherwise might leave because the health coverage is good. Conversely, poor health benefits push people to look elsewhere.

Mental health support has risen dramatically in importance. Employees increasingly view mental health benefits as a sign of whether employers care about their wellbeing.

Flexibility (remote work, flexible hours) ranks near the top for many employees, particularly younger workers and working parents.

Parental leave influences decisions about where to work and whether to stay, especially for employees in their family-forming years.

What Doesn't Move the Needle

Some benefits, while appreciated, don't strongly affect retention:

Gym memberships and wellness perks are nice-to-haves but rarely factor into stay-or-leave decisions.

Minor ancillary benefits (discount programs, free snacks) don't drive loyalty.

Complex voluntary benefits that employees don't understand or use don't generate retention value.

The Competitiveness Threshold

There's a threshold effect with retention. Benefits need to be competitive enough that they're not a reason to leave. Beyond that threshold, incremental improvements have diminishing returns.

The strategic question: Are your benefits good enough that they're not pushing people out the door?

Using Data for Retention Strategy

Benchmarking helps answer the threshold question:

1. Where do you stand on benefits that matter most to retention?
2. Are there categories where you're significantly below market?
3. What would it cost to close concerning gaps?

You don't need to be best-in-class everywhere. You need to avoid being a retention liability anywhere.

The Bottom Line

Retention is expensive. Replacing an employee costs 50-200% of their annual salary depending on the role. Benefits that reduce turnover pay for themselves.

Invest in the benefits that actually matter for keeping people. Use benchmarking to ensure you're competitive where it counts.