Healthcare is an issue for all small businesses, and hospitality is no exception. Unfortunately, too many hospitality owners see healthcare as an optional extra, especially if a majority of their staff are part-time.
Between this and rising costs, studies have found hospitality owners are less likely to pay for benefits than businesses of similar size in other industries. For example, in one study conducted by Restaurant Opportunities Centers United, 89% of hospitality workers reported they were not provided with health insurance. Another survey in 2019 by Toast said that only 31% offered medical insurance for employees.
At the same time, not offering healthcare is a disadvantage for a variety of reasons. One of the most significant reasons, it can make it difficult to attract staff and even more challenging to retain talented cooks, servers, and supervisors you need to run a quality hospitality business. Another noteworthy reason is not maintaining a healthy staff leads to a higher volume of call-outs, potentially limiting table turns and causing stress on other team members.
Why is Healthcare a Liability for Hospitality?
Most hospitality owners and operators see healthcare as a liability, which is a problem for their employees and their business. In addition, some industry-specific issues make it particularly difficult for hospitality to provide healthcare.
- High turnover. Many people wait tables or work as line cooks while looking for a full-time career, another job, or going to school. The staff tends to be more transient, moving around and changing jobs often.
- Large numbers of part-time employees. Many hospitality companies hire people only part-time. Some hospitality businesses may have limited-hours and may not be able to hire staff full time. Others may only hire part-time employees for a variety of purposes.
Many hospitality companies operate on narrow profit margins. For many hospitality, paying for employee benefits is simply something they try to avoid. If owners do offer it, a 90 day wait period is typical. So many employees will never qualify for coverage. Moreover, traditional premiums can vary based on age and gender. So predicting cost can be challenging. When margins are thin, this unpredictability can feel risky and leave the business owner feeling out of control.
Why Your Hospitality Company Should Provide Healthcare?
Restaurantprenuers who offer healthcare see higher retention rates with their employees, thus lowering turnover. High turnover is costly in both time and money. While the higher turnover rates make it challenging to provide healthcare, not providing healthcare only contributes to the problem. When hospitality owners offer healthcare to their employees, they can see positive returns on those investments through reduced costs associated with higher turnover. These benefits can include lower budgets for attracting new workers, less time spent on interviewing, administration and training, and higher customer satisfaction through tenured employees.
For young wait staff, healthcare might not seem to be an issue until something happens. But in order for employees to consider turning their job into a career, they need benefits for both themselves and their families. Unfortunately, this means the experienced staff who are prime for promotion to managerial positions are the very ones leaving because they don’t have benefits.
Spending on benefits can also help you stand out when competing for workers. Sometimes it can be less expensive than increasing wages, especially in a time of worker shortages and a “seller’s market” for labor. Yet, the value in the eye of an employee can be tremendous. Offering healthcare communicates to your workers that you care about them as a person and they are more than just labor. This type of culture earns loyalty from your employees.
Another good reason to provide healthcare is that when your employees have access to preventive care and take advantage of it, they are less likely to call in sick. For example, a 2018 study showed that the average annual total economic burden of influenza was $11.2 billion, including all of the days of productivity lost. Employees with insurance have access to medical advice, which can help keep your employees healthier.
Providing the best healthcare you can afford is good business. It can make the difference between keeping and losing a good employee, especially top talent. Additionally, it can also provide a positive return on your financial statements through higher productivity and lower cost. Lastly, it will separate you from your competitors through higher-quality customer service.
How Do You Turn Healthcare Into an Asset?
Despite all of these good reasons, the cost of healthcare remains prohibitive for many companies, especially smaller hospitality companies. Additionally, too many employers are wasting money on healthcare that their employees are not using.
Turning healthcare into an asset requires rethinking how it is provided. Game-changing healthcare should:
Align healthcare to employee incentives
This includes providing services that allow employees to be proactive about their health, including chiropractic treatments and mental health services. The hospitality industry is known for long hours on your feet and addictions. Offering healthcare to address these issues will impact your employees’ lives, your business, and the industry. You can use this to encourage your employees to get annual checkups, stay home when sick rather than pass it on to coworkers and customers, and think about their overall wellness.
Eliminate barriers for claims
Many healthcare plans have high copays and deductibles. These can be confusing for employees and discourage them from seeking medical help when they are sick. Good healthcare will eliminate these barriers for employees. For example, giving your employees the freedom to choose their preferred providers while taking steps to reduce employee out-of-pocket costs will encourage employees to use the benefits the employer offers. This might also include helping them find prescriptions at the lowest price. Focusing on the employee rather than only cost helps ensure that your employees actually use their benefits.
Reduce healthcare waste
Far too much of our healthcare costs go towards redundant or unnecessary claims. However, by encouraging doctor-to-doctor communication, the cost of care could drop substantially. In addition, modern healthcare technology helps ensure that providers have access to medical records they need. Overall, reducing waste saves costs without impacting care. In fact, done correctly, it optimizes care for each individual.
Providing Game-changing Healthcare is a win for the Hospitality industry
Hospitalitypernuers tend to think of health insurance as only a liability. This thinking leads to not providing insurance or providing only the legal minimum.
However, by focusing on providing genuine care for all levels of staff, hospitality owners can change the game. Employees win through better care and improved lives. Owners win through attracting top talent, higher retention rates, and more loyalty from employees.
RiseWell is here to help you provide big business benefits with small business affordability. Request more information today.