Keeping great employees is far more cost-effective than replacing them. Studies estimate that turnover can cost anywhere from 30% to 200% of an employee’s annual salary once you account for recruiting, training, loss of productivity, and the impact on workplace morale. In today’s competitive job market, smart employers understand that retaining top talent is not only a people strategy—it’s a financial one.
What many businesses don’t realize is that there are effective ways to improve retention without increasing overhead. One of the most powerful strategies involves using a compliant Section 125 pre-tax structure to reduce payroll tax liability. Through this method, companies typically save around $640 per employee per year, and instead of sending that money to the IRS, they can redirect it into meaningful employee wellness benefits.
Learn how to turn taxes into real employee benefits—without adding cost
This redirection does not alter current benefits but rather enhances them. Employees gain access to valuable services such as virtual primary care, 24/7 urgent care, mental health support, fitness and nutrition resources, and more than 1,000 no-cost prescription medications for themselves and their dependents—all at no net cost to the employer or the employee.
By offering benefits that truly support their team’s physical and mental wellbeing, employers reduce burnout, improve workplace satisfaction, and demonstrate leadership that values people over short-term cost cuts. As a result, employees are more likely to stay, grow, and contribute at higher levels within the organization.
Retention doesn’t have to come with increased spending. With the right tax strategy, it becomes a financial advantage rather than an expense.
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