When companies get to a certain size, they typically start offering employee benefits – particularly since they’re required to do so based on federal and state laws. If a company wants to become an employer of choice, it should also provide a few low-cost optional benefits that are highly valued by employees.
A new year is always a great time to revisit your benefits policy and program. Check out some of the best benefits that you should know before creating and updating an employee benefits package.
Social Security and Medicare Taxes
Despite the type or size of the business, every employer should pay their employees’ Social Security and Medicare tax contributions. The contribution may vary with the age of each employee and how much they earn.
Unemployment insurance provides compensation to both part-time and full-time workers who are involuntarily separated from the company. It is different in every state and is mandated at the state level.
Worker’s compensation offers insurance benefits to employees who are injured or ill while performing job duties. This insurance is different in every state and is dictated at the state level.
Some employee benefits are mandated only in a few states, and disability insurance is one such benefit. Short-term and long-term disability insurance provides partial wages to employees who suffer from non-work-related accidents or sicknesses that cause them to miss work.
Family Medical Leave
The Family Medical Leave Act (FMLA) allows employees to receive up to 12 weeks of unpaid medical leave per year while still maintaining their job and benefits. This leave protects the employee from losing their job to care for themselves or an immediate family member.
With the pandemic upending so many lives in 2020, health insurance has become more important than ever. If you’re competing for top talent, providing high-quality health insurance benefits can help you attract and retain the right candidates. It can also promote a healthy workforce.
Paid Time Off
Most employers offer paid and unpaid leave benefits to employees for vacation, illness or personal time. This benefit is highly valued by employees, and employers who offer it can get a competitive advantage in talent acquisition.
Telecommuting and Flexible Work Schedules
Due to COVID-19, many companies have started promoting flexible schedules. Working from home is one of the most valued benefits by employees because it improves their work-life balance.
Maternity and Paternity Leave
Companies that offer paid time off for new parents will likely be preferred by top performers who plan to become parents in the future.
Retirement Saving 401(k) Plans
Offering a 401(k) plan that automatically moves pre-tax money from employees’ paychecks into their retirement accounts to secure their future can be a highly valued benefit. A defined set of retirement benefits or pension plans appeals to most employees.
Employees often love getting company-exclusive (corporate) discounts on big purchases, from cars and homes to smartphones. However, younger employees are attracted to perks like student loan reimbursement and wellness programs. Following are some other low-cost perks that can also drive employee satisfaction.
Dental and vision insurance
Tuition fees and student loan repayment
Transportation and parking benefits
Free food and beverages
Bonuses, incentives, awards and gifts
Training and skill development programs
Tips for Creating an Attractive Employee Benefits Package
Your benefits package is a tool to serve your employees’ unique needs and desires in the best possible way. Here are a few strategies to provide higher employee engagement and create an attractive employee benefits package.
Businesses should offer all mandatory employee benefits after checking their state laws and provide some choices for additional benefits. Allowing employees to personalize their benefits packages to meet their own goals can increase their satisfaction and trust.
Conduct a Cost-Benefit Analysis
Assess the true cost of each benefit, and if one appears to be too expensive, research how you can lower the cost. The Bureau of Labor Statistics (BLS) releases its “employer costs for employee compensation” report every quarter detailing how much U.S. businesses are spending on benefits, on average. The BLS also releases an annual report called “Employee Benefits in the United States.” The BLS report provides data on the benefits employees have access to and the ones they use. You can use BLS reports to determine the actual cost of a benefit and for long-term savings.
Set Budget for Your Benefits Program
Set a budget range for employees’ benefits plans and try to operate within that allocated budget. If you are a small organization, spend wisely and also check the benefits that your competitors are offering to their employees.
Create a Comprehensive Employee Benefits Package
Figure out the most-liked benefits by surveying your employees and understanding legally required employee benefits that you must offer. Employees can become more productive, miss fewer workdays, and have a higher commitment to meeting the company’s goals if provided the benefits they value.
Invest in the Success of Your People
Offer regular training and development programs to your employees by local universities or industry experts. If your budget permits, pay a portion of the tuition fees for employees returning to college or taking part in certification programs. Encourage your employees to perform and achieve better by appreciating their efforts.
Provide More Work-Life Balance
A compelling work-life balance due to remote work options and flexible scheduling allows staff members to manage their work on time. Providing this benefit can help your company stand out from your competition.
Align With a Benefits Provider
Professional employer organizations (PEOs) can help businesses provide comprehensive benefits solutions. You can also use benefits administration software or coordinate with insurance agencies to provide an effective benefits package.
Check the Effectiveness of Your Benefits Program Annually
You can track employee benefits utilization through employee surveys and input from your talent management team. Use survey data to find out if your employees are able to use the provided benefits and feel satisfied. If any benefit has low participation, it means it might not meet the needs of your employees, and you may provide alternatives.
Use Technology to Enhance Employee Experience
Benefits administration should use technology that makes it easy for employees to understand and access and the offerings while they enroll.
Source: Escalon Services