The Cost-Cutting Power of Fringe Benefits

Employers often look at benefits as a cost—just one more thing cutting into the bottom line. But what if this paradigm could be shifted, and benefits could instead be viewed as a method for reducing costs and padding the bottom line? While it’s true that there is often (but not always*) a cost to offering increased benefits, the associated savings can result in overall lower expenditures for the company.

How Fringe Benefits Can Cut Costs

1. Reducing Employee Turnover

One of the most significant ways benefits can help cut costs is by decreasing employee turnover. When employees feel taken care of, they are more likely to stay in their roles. This saves the company from the various costs associated with refilling positions, which can add up—from recruitment to onboarding and training.

2. Boosting Employee Productivity

Benefits also cut costs by increasing employee productivity. Employees who feel valued by their company are more likely to perform at their best. By ensuring that employees are maximizing their potential, companies can either increase their capacity or meet their capacity with fewer employees, which either increases income or decreases expenses.

3. Specific Cost-Saving Example: Amaze Health

A more specific way that a fringe benefit can help cut costs is in the case of Amaze Health, which was discussed in a previous article. This benefit is particularly beneficial for companies that self-insure for healthcare benefits. Considering that around a quarter of emergency room visits could have been addressed at a lower-cost facility, such as urgent care, companies are spending more than necessary on healthcare costs due to employees making uninformed medical decisions. Amaze can help by connecting employees with providers who can advise on the best course of action based on the situation, thus limiting unnecessary costs.

Conclusion

By rethinking fringe benefits as a tool for cost reduction rather than just an expense, companies can achieve significant savings. Whether through reducing turnover, boosting productivity, or making informed healthcare decisions, the right benefits package can make a noticeable difference to a company’s bottom line.

*To learn more about offering additional fringe benefits at no additional cost, read our article “Employers are Leaving Money on the Table (for their Employees and Themselves)”.

Key Takeaways:

• Cost-Effective Strategy: Fringe benefits can reduce overall company expenditures by lowering turnover and boosting productivity.
• Healthcare Savings: Programs like Amaze Health can help companies that self-insure save on healthcare costs by guiding employees to more cost-effective care options.
• Increased Productivity: Valued employees tend to be more productive, leading to either increased capacity or reduced need for additional staff.
• Long-Term Savings: Investing in the right benefits now can lead to significant savings in the long term.

Tags: #FringeBenefits #CostReduction #EmployeeProductivity #EmployeeRetention #HealthcareSavings #BusinessStrategy #HRManagement #WorkplaceWellness

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