Every employer knows it's a jungle out there - a hiring jungle that is.  Finding and retaining top-notch employees has become a major factor in keeping a company competitive.  But as many employers soon discover, in the employee retention war, salary is not the only factor.

David Sirota, co-author of "The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want," made the following comments during a May 2005 interview with Knowledge @ Wharton:

"We find there are three basic goals of people at work. First, to be treated fairly. We call that equity. Employees want to know they are getting fair pay, which is normally defined as competitive pay. They want benefits and job security. These days, employees especially need medical benefits, so those have become significant."

However, in spite of the fact that health benefits have become a top priority for employees, the number of small businesses offering employee health care plans has actually declined.  In a 2005 study conducted by the Henry J. Kaiser Family Foundation, a Menlo Park, California-based non-profit foundation that focuses on the major health care issues facing the nation, the rate of growth of health insurance premiums declined for the second straight year in a row.  In fact, premium growth slowed to a low of 9.2% in 2005.  Yet, the percentage of all firms offering health benefits to their employees has fallen significantly from 69% to 60% over the last 5 years.  If premiums are continuing to decline, what's stopping small business owners from offering their employees this benefit?

The answer to that question lies in how well a business owner understands cost versus value.  As the statistics quoted above indicate, offering an employee medical plan has become easier, however, some employers don't see the value in the product.  In many small companies, the owner or decision maker has a spouse with coverage and they don't see the need for an employee medical plan because it doesn't pertain to them.  These business owners are using tunnel vision to evaluate the need for a medical plan, instead of evaluating it from the end users' perspective.

Using the end users' perspective is important when evaluating a new product or service.  That's because you can only retain your customers if you give the people what they want.  If you cannot provide products or services that respond to their stated needs, they will simply find someone else who can.  The same is true for your employees.  With the spiraling cost of healthcare, employees need group coverage to ensure their family's health.  That is a stated need whether or not it is verbalized during an interview.  It makes good business sense to provide a solution to that need via the best medical plan you can offer.  If you don't, your employees, like your customers, will find someone else who can.

Even beyond answering employee need, there is another less obvious benefit to offering the best medical plan your firm can afford; it not only helps to retain key employees, it helps to maintain their loyalty.  From your employees' perspective, your willingness to help them take care of their families is a sign that they are worth more to you than just extensions of the bottom line.  And being valued on the job has been determined to be another important factor in retaining employees.  Talk to your insurance professional about designing a health care program that is not only cost effective, but meets the needs of your employee population.