How can you reduce employee attrition? When a company has the best group health insurance plan that its competitors don’t have, it will be able to keep more of its employees.
In developed countries such as America, Canada, and Europe most employees check the health insurance coverage offered by the employer before deciding on joining the organization.
Employees in these countries are ready to sacrifice a part of their salary growth in return for the best health insurance coverage.
This is due to the high medical costs in developed countries where most people would not be able to afford private health insurance and would be largely dependent on the group health insurance offered by the employer.
In cases where the group health insurance is valued more than the other benefits, employees would prefer to stay with the company rather than change it, which helps reduce attrition in the organization.
In countries like India, healthcare costs are rising with medical inflation touching 8% which is the highest in the recent decade. Employees are now seriously considering group health insurance as a part of the employee benefits and paying attention to what is offered under the group health insurance policy.
Starbucks spends more money on group health insurance premiums than it does on sourcing coffee, which is their main product.
The budget for group health insurance has been made by most companies in recent years and is being followed which helps the organizations reduce employee turnover.
The attrition rate, also known as the “Churn rate” is the rate at which employees leave an organization. It is calculated as the ratio of the number of employees who left the company to the average number of employees over a period of time.
Any company would want to keep its attrition rate under control and limit it to a single digit as the cost of hiring a new employee is higher compared to the cost of retaining an old employee
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What Causes Employee Attrition?
Reducing the cost of employee benefits can affect group health insurance and may cause more people to leave their jobs.
With the great resignations taking place in recent times, it is of utmost importance to have a good group health insurance policy which can reduce the attrition rate as the employees should feel the value of the group health insurance policy that is being offered to them.
Group health insurance is a boon for small companies to retain the best talent as they would not be able to offer benefits in competition with the big companies.
Factors that help group health insurance to Reduce Employee Attrition:
Free Health benefits:
One factor which helps an organization reduce employee attrition rate is the free health benefits offered by the employer as a part of the employee benefits under the group health insurance plan. Employees would prefer to stay with a company that provides them with free health care and competitive pay.
For example, if an employee has included his parents in the group health insurance policy and they have a pre-existing disease such as a heart attack, the employee would not leave the organization because obtaining a health insurance policy for his parents with such pre-existing conditions would be difficult.
The employee would not leave the organization, as only a few organizations offer health insurance coverage to parents. Employees may not be able to afford the healthcare costs that would be incurred in the absence of a group health insurance policy.
Peace of mind:
The other factor that helps an organization reduce the attrition rate with the group health insurance policy is that employees get peace of mind with the group health insurance policy.
Group health insurance policies do not have a pre-existing waiting period, unlike retail health insurance, which gives more peace of mind to the customer.
The members of the group health insurance policy can avail of hospitalization benefits for all illnesses or diseases from day 1 as there is no waiting period which helps your organization to gain the trust of your employees and it reduces employee attrition.