Most employers attempt to provide their employees with benefits—extra perks to make working more rewarding. These are valuable, but can also be expensive, so employers are often faced with a series of difficult choices. Which benefits should you offer to your employees? And how should you account for them?
Why Offer Benefits?
Let’s start by reviewing some of the main reasons why employers offer benefits to their employees:
· Attracting potential candidates. For starters, employee benefits help attract top talent to your organization. Skilled, experienced people want jobs that provide them with extra perks; if you offer those extra perks, they’ll be much more likely to consider you as an employer.
· Encouraging retention. Employees who receive significant benefits are much less likely to leave willingly. That’s why organizations with robust benefits packages tend to have much higher employee retention.
· Improving employee wellbeing. Many benefits are aimed at increasing employee wellbeing; this, in turn, makes employees happier and allows them to be more productive.
· Improving employee performance/value. Other benefits are designed specifically to improve employees in some way, such as helping them develop additional skills or improving their total knowledge.
· Protecting employees from disaster. Certain benefits provide a layer of protection to employees who are afflicted by something negative, like disability or an unexpected change in their life.
Benefits to Consider
These are some of the most common employee benefits offered by employers:
· Paid time off. By far the most commonly extended benefit, paid time off can be used by employees for a variety of purposes. Some organizations split paid time off into different categories (like sick days vs. vacation time), while others don’t differentiate between these purposes. In any case, PTO allows employees to do more with their personal time without fear of losing a portion of their income.
· Health insurance. Another common benefit is health insurance (and related insurance policies). With health insurance, dental insurance, vision insurance, and other similar policies, employees will be much more likely to take good care of themselves, and will get the help they need if they’re injured or afflicted with a condition. This keeps them in good health, ultimately increasing their productivity.
· Long-term disability insurance. You can also consider long-term disability insurance for your employees. The SSDI program affords some level of disability protection to employees, but this is often insufficient; not all disabilities are covered by this program, and the benefits paid are often minimal. A more robust, private long-term disability insurance policy will ensure your employees are adequately compensated if they’re ever unable to work for more than a few months.
· Retirement benefits. Retirement benefits are another attractive option for employers to offer. Employees want a solid path to retirement, and plans like 401(k)s and 403(b)s provide an ideal course. Depending on the nature of your business, you can choose from a variety of different plans, and choose to match employee contributions.
· Tuition reimbursement. Some companies provide some measure of tuition reimbursement; if an employee pursues education that could somehow help them become a better employee, the company will reimburse them (usually up to a specified amount).
· Childcare provision. Mid- to large-sized companies often offer benefits related to childcare as well, which is especially valuable to new parents. There may be an onsite facility responsible for providing childcare, or there may be paid benefits to reimburse parents for childcare.
· Health and wellness programs. Healthy employees are happier and more productive employees. That’s why many businesses offer health and wellness programs for their workforce; for example, many companies reimburse employees for gym membership expenses, and some even have a recreational facility within the business to encourage employees to exercise.
· Employee recognition programs. One of the least expensive options on this list is an employee recognition program. It doesn’t take much time, money, or effort to reward your best employees for doing their job exceptionally well; sometimes, a gift card or special privileges (like a designated parking space) are all it takes to make a positive impact.
Making Benefits More Affordable
If you’re an employer looking at this list and shuddering at the thought of multiplying your already-high employee expenses, there are a few things you can do to reduce the total cost of employee benefits. First, you can consolidate all your employee benefits through a specific source; most insurance companies and employee benefits companies are willing to extend a sizable discount to bulk purchasers. You can also tweak policies to yield the best possible cost-to-value ratio for your business, or split costs with employees.
You don’t have to roll out your full employee benefits package all at once; instead, you can introduce new benefits gradually. Take your time investigating the pros and cons of each potential benefit, and choose the best selection for your team.