Why Not Give Employees a Benefits Package That Gives Them a Good Reason to Stay?

Employees leave their jobs for a variety of reasons, ranging from inadequate compensation to toxic work environments to limited chances for advancement to better opportunities elsewhere.

Replacing an employee can cost an average of nearly $4,700, according to the Society for Human Resource Management (SHRM). A Gallup report estimates that employee turnover costs U.S. companies a total of $1 trillion every year.

Any company that wants to be profitable and successful should consider turnover rates. Higher turnover may lead to decreased productivity, human capital, and bottom-line value.

Retaining employees is a complex, multilayered process that includes hiring the right people, paying them fairly, treating them with respect, providing training, creating a workplace culture that nurtures engagement, and more.

But retention also requires a benefits package that fits your employees’ needs and goes above and beyond the traditional basic program. To do that, you need the right strategy.

A strong benefits strategy starts with strong health and retirement plans

The two offerings most consistently listed as being most important to employees? According to ADP, that includes a strong, cost-effective health plan and a well-constructed, rewarding retirement plan.

ADP goes on to report that employees most often evaluate benefits as a complete package. Many businesses have addressed this issue by making retirement savings plans and health coverage as part of their core employee retention incentives.

Healthcare costs are expected to climb again in 2026

That’s according to the 2026 Employee Health & Benefits Trends report from Marsh McLennan Agency (MMA). This puts cost control and benefit value squarely at the center of your planning. Increasing costs reflect the growing pressure from medical inflation, specialty drug spending, and higher utilization as employees return to care they may have delayed in recent years. For small and midsize businesses, these trends can make it challenging to maintain competitive coverage without shifting more costs to employees.

The MMA report lists several factors that are contributing to the expected increase in healthcare costs for 2026:

• Catastrophic and deferred claims: High-cost claims and deferred care delayed because of the pandemic are pushing overall claims costs and frequency higher.
• Specialty drugs: The growing use of specialty medications — particularly GLP-1 drugs for diabetes and weight management — drives spending.
• Rising provider and service costs: Reimbursement rates have been going up to offset inflation, labor shortages, and higher operating expenses.
• Plan design and benefit structure pressures: Employers are reevaluating cost-sharing levels, network options, and provider contracts to control expenses while preserving value.

What do your employees want from their health benefits plan?

Ask them. A “health benefits plan” represents more than medical coverage. It incorporates disability coverage, paid medical and family leave, flexible spending accounts, mental health support, and more. Providing your employees with a comprehensive approach is an extremely important key to keeping them engaged.

Much like retirement plans, different parts of your workforce require or want different specifics. Creating an approach with the greatest flexibility to provide the support each generation may need is key. Here again, states are mandating paid leave programs. If you can create one that works for your organization, chances are it will be more effective.

Financial stress remains one of the biggest stressors on employees 

A study by Pew Research reports that inflation, market uncertainty, and rising household costs are putting huge strains on employees’ budgets. Only 20% of lower-income adults say they’re currently in excellent or good shape financially, compared with 47% of middle-income adults and 74% of upper-income adults. Employers that offer benefits addressing both immediate and long-term financial needs could help employees not only build stability but also create confidence.

What do your employees want from a retirement plan

Here again, give them a chance to weigh in on what they need. When employees see that you offer a serious retirement plan, they feel more engaged and are more apt to remain with the company. The Great Recession in 2008 caused many Boomers to lose savings and even jobs, so matching retirement programs are highly important to them. Gen Xers entered the workforce just as U.S. companies were making the transition from pensions to 401(k)s. Even younger employees such as Millennials and Gen Z are demonstrating interest in having retirement accounts with matching contributions from their employers reports a Schwab 401(k) study. You may also consider including financial coaching and counseling, Emergency Savings Accounts (ESAs) where employer-matched funds help create a safety net for unexpected expenses, and student loan repayment and tuition assistance.

Strengthen your strategy by offering more of what employees need

High-quality benefits not only communicate long-term commitment, but they also give you a competitive advantage.

For example, you can include benefits that help employees create better work/life balance, including flexible scheduling and remote or hybrid work; commuter passes, pet insurance, or on-site childcare options to help make home life easier; and enhanced standalone Employee Assistance Programs (EAPs) that offer free, confidential counseling, legal advice, and even short-term therapy.

In addition to these options, you can offer voluntary benefits such as vision insurance, dental coverage, chiropractic care, hospital indemnity insurance, and critical illness insurance.

And don’t forget about employee training. Offering ongoing professional development training gives employees a vision for a future with your company.

The result? A more competitive, well-rounded benefits package that helps improve employee satisfaction and, ultimately, retention.

How Marsh McLennan Agency can help

Our skilled plan advisors can help you with a variety of retirement plan advisory and financial well-being services. We also have specialists who are prepared to help you navigate the complex, ever-changing landscape of health benefits. Marsh McLennan Agency is here to act as a trusted advisor to help you transform and solidify a comprehensive benefits strategy.