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2 min read

The true worth of employee benefits

By NAIFA-Texas on 9/22/21 1:56 PM

Warsaw, Indiana, is affectionally known as the “Orthopedic Capital of the World.” Over a century ago, a young chemist started the world’s first orthopedics company in the small Midwestern town. Since then, the industry has ballooned. Today Warsaw, which has a population of just 15,000, hosts numerous companies that focus specifically on designing devices that manage musculoskeletal problems. For employers, this clustering offers the promise of a skilled workforce that understands the industry. Yet it also presents an acute challenge: heated competition for that very labor.

This was the problem one firm was facing when they began working with Principal® in 2017. At the time, “it was not uncommon for employees to leave without notice for a competitor,” says Kara Hoogensen, senior vice president of specialty benefits at Principal. This turnover wasn’t just an inconvenience for employers who needed to find replacements; it threatened to undermine morale, operational efficiency, and growth.

The key issue, Hoogensen says, was benefits. With so many companies competing for a limited labor pool, every aspect of employment mattered. For the workers of Warsaw, incentives like health coverage and retirement plans had become key differentiators in terms of making choices about where to take jobs. Realizing that salary considerations alone was no longer sufficient to compete, the company began working with Principal to build out its benefits offerings.

“The group was trying to find a way to retain and recruit quality employees,” Hoogensen says. “Over the last four years, they have steadily increased their offerings, moving from an initial offering of group life, short-term disability, and long-term disability, adding dental, vision, critical illness, and accident coverages.” In that time, the company has been able to expand the number of employees enrolled in benefits from around 110 to over 180.

This effort isn’t unique to one medical manufacturer in the Midwest. Across the country, companies, especially small and mid-sized businesses (SMBs), are realizing the value of investing in strong benefits offerings. These packages don’t just provide generous perks for employees; they can improve the company’s bottom line through effective recruitment, retention, wellness, and productivity.

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Published by NAIFA-Texas Gold Sponsor, Principal at https://www.principal.com/businesses/trends-insights