Part of having a good business model, one to sustain itself now and in the future, is having a competitive and compelling employee benefits package. Why? Simple. Because you want to attract and retain the right talent. When you offer your employees a good benefits package, it shows that you care about them are invested in their overall wellbeing, profitability aside. This boosts morale and productivity. Besides this, employee benefits can help you stand out from competitors, thereby acquire the best talent available.
Nevertheless, creating the perfect benefits package for your business can be a struggle, especially for small businesses. A haphazardly done model can turn expensive fast, and it makes no sense to offer an expensive package to your employees only to fire them later when the business crumbles. How do you strike a balance? Remain competitive, but only offer what you can afford. Moreover, you could cost-share with your employees or seek low cost-benefit options.
Here are the top 5 most popular employee benefits in the U.S:
1. Medical Insurance
As it goes without saying, medical insurance is one of the most popular, if not top-of-the-list when it comes to employee benefits. Medical coverage is important to many, and as such, is a major determining factor for potential employees. Most companies in the US actually offer health insurance, and in March 2016, the Bureau of Labor Statistics recorded that an impressive 70% of all civilian companies offered health insurance, with private firms following closely at 67%.
To find out more about the exact amount you should cover, your finance department, along with a medical carrier will be of great help. Note that the ACA dictates the maximum premium amount that an employer over 49 FTEs can charge. You could also seek the competence of a broker who will help you to stay compliant with regulations, remain profitable, and get a good medical insurance deal to stand out from your competitors. Some employers also include dental insurance, although it’s rare.
2. Retirement Benefits
Contrary to what most entrepreneurs think, offering retirement plans is not complicated, and neither will it lower profit margins. You can come up with a great plan to offer retirement benefits to your employees and you’ll find that this increases employee retention exceptionally well. More than half of the employed in the US are barely thinking of retirement, and you could also be a victim of this mentality. A comprehensive plan, therefore, will invest in the future of the employees, and the business owner as well, so none of you will be caught off guard at your old age.
Contributions could be done through a matching or profit-sharing program, done at the end of each quarter or 6 months. The Economic Growth and Tax Relief Reconciliation Act of 2001 provides a tax credit of 50% for the first $1000 startup costs of implementing a retirement plan. These include a Simplified Employee Pension (SEP), SIMPLE plan, or a 401(k) plan. Retirement plans are also tax-free, which is quite gratifying as a businessman. More information on this can be gotten from IRS Form 8881.
3. Life Insurance
Life insurance protects your employees’ family: spouse and children in the event of death. It is quite popular, though not as popular as health insurance. Almost all medium and large firms in the US offer life insurance to nearly all their full-time workers. It is not expensive to offer life insurance, and most businesses offer life insurance without much hassle. With Florida residents being one of the highest states for families, employee benefits in the Tampa, Florida area usually always include life insurance for companies with over 20 employees.
When it seems like it’s too hefty for you, however, you could pay part of the policy and ask for employees to pay the rest, if they would like to procure life insurance for themselves. You’ll find that company-sponsored plans are subsidized compared to getting life insurance privately so most employees will be willing to participate.
4. Paid Holidays, Vacations, and Sick Time
PTO or Paid Time Off is so popular nowadays, that it’s almost becoming a right. Typically, employers allow their employees to take 10 days off as per their employee benefits package. They are also allowed off on other holidays besides Memorial Day and Labor Day. As an employer, you can structure this as a one-off package or break the days down into personal, sick, and vacation days. Employers who have been in the firm for more than 5 years could also be given an extra week off (5 days) to encourage employee retention and increase company loyalty.
5. Flexible Schedules
Not every employee benefit has to be monetary. You could let your employees know that you are thinking about their personal lives without spending a dime. As such, you could give your employees the option of moving their hours around, as long as exceptionally good work is still maintained. Flexible schedules are a cost-effective employee benefit and you’ll find that they go a long way in increasing productivity, morale, and mental health.
There are many employee benefits that employers could offer their employees, some being more desired than others. From Healthcare spending or reimbursement accounts, such as HSAs, FSAs, and HRAs, tuition reimbursements, wellness programs, employee recognition programs, and many others, the list is truly endless. As you assemble a well-structured benefits program while still maintaining the business profitability, you’ll find your business reaching unprecedented heights and retaining your employees for years down the line! When your employees feel and are valued and treated with respect and basic rights, you create a company culture or positivity and pride in your employees.