The Case for Offering Competitive Life and Disability Benefits

Company Overview

This prospect was a mid-sized beverage distributor, located in Charlotte, NC and employing 135 full-time employees.

Key Challenges

This company had experienced steady growth but had been struggling recently with employee retention, particularly among mid-level employees who expressed concerns about financial security in case of unexpected life events. They provided employees with a strong company paid health insurance option but no disability coverage and minimal life insurance coverage of only $25,000 per employee.

MBA Solution Presented

To improve retention and employee satisfaction, we suggested the company make the following changes to their benefit portfolio:

• Add Short-Term and Long-Term Disability (STD and LTD) Insurance. We advised they provide a program with employer paid STD covering 60% of salary for up to 12 weeks and a voluntary LTD plan covering 50% of salary up to retirement age.
• Increased Life Insurance. The basic life insurance policy was raised to one year’s salary for all workers, with optional additional coverage available at a low group rate.
• Educational Sessions on Benefit Utilization. Employees were educated on the value of these benefits, increasing awareness and engagement.

Measurable Results

After one year, the company saw measurable improvements. Employee retention improved by over 25%, recruitment efficiency increased, and a company-wide survey indicated that 82% of employees felt more secure with the new benefits, up from 47% the previous year.

The overall cost increase to the employer was only 2.1% of payroll, proving cost-effective in retaining skilled talent.