The types of benefits your business offers can go a long way towards attracting the best talent to your team and retaining happy employees.
Once you have the major components of your business running smoothly and you’re ready to hire employees, the next big decision you’ll have to make is whether or not to offer benefits.
Not every business owner deems it necessary to offer an extensive benefits package, and that’s okay. But if you’re going to offer them, you’ll need to know which coverages are most important and the differences between them.
Let Hoist give you a quick rundown.
Employee benefits can be described as offering extra perks or another form of compensation beyond their normal wages.
A typical employee benefits package could include health insurance, paid time off (PTO), life insurance, profit sharing, retirement savings, and more.
To stand out in today's job listings, offering benefits to potential employees can hold a lot of weight in a competitive labor market. It adds value to employees and their overall work experience, which eventually adds value to your business.
There was a survey conducted by Glassdoor that showed four in five employees would rather have new or additional benefits versus a pay increase.
Each state has its own rules in regards to things like sick leave or short-term disability, but a few benefits such as social security are required by law for all employers.
Other employee benefits that are required include:
There are a number of standard benefits that almost every job seeker is familiar with, but more and more less-traditional employee perks have begun to emerge in the workforce.
Although not legally required, health insurance is one of the most common benefits offered to employees. If you can find a healthcare plan that works for your employees and your budget, it’s a great place to start.
If your business offers healthcare benefits, the Affordable Care Act (ACA) requires it to be offered to all employees once they become eligible. There are also ACA employee notification requirements that must be met as well.
Additional health plans that employees are looking for include dental care, vision plans, and life insurance.
Health Spending Account (HSA)
A health spending account can be a less expensive alternative to a traditional health insurance plan.
An HSA is a flexible tax-advantaged benefit that can be customized for you and your employees, to spend on the eligible medical expenses needed.
You can use money deposited into your health spending account for deductibles, copays, coinsurance, and more. In most cases, HSA funds can also be used to cover qualified premiums such as Medicare, COBRA, or long-term care insurance.
If you’re leaning towards an alternative route, discuss your options with a financial advisor to make sure you’re doing what’s right for your situation. There is a great deal of health insurance alternatives on the market today.
Paid Time Off (PTO)
Access to paid leave is a strategic way for business owners to attract top talent to their teams. Most employees find great value in the financial freedom to break away when needed.
Research shows that 95% of people surveyed claimed that using their paid time off was important.
Offering workers a variety of ways to utilize their paid time off has a long list of mental and physical benefits that can lead to lower stress levels and increased productivity.
A lot of employers have extended the list of options to use paid time off to include professional development and family planning (birth, adoption, and foster), in addition to holiday, vacation, or sick time.
Employee Stock Options (ESOs)
Providing employees with a portion of ownership in the company is a good opportunity for everyone involved. It’s a cost-effective benefit that gives employees a sense of pride in their work and a feeling of togetherness across teams.
Employee stock options allow employees to purchase shares at a discounted rate within a specific timeframe. This allows employees to experience financial gains as profit margins improve, resulting in higher retention rates for employers.
At one time, this was a coveted benefit reserved for top executives but it has since opened up to a wider pool of employees. These days, it’s common for startups to offer equity in their compensation package as an added incentive to join the company.
Most Americans are not very good at saving for retirement. If you can make that process simpler and more accessible, it’ll help your company stand out to the kind of job seekers you’re looking for.
The most common way to achieve this is to offer a 401K plan that automatically funnels money from their wages into a retirement savings plan. This makes it easier to save and offers tax advantages for both the employee and the employer.
Employee contributions are tax-deductible, and as the employer, there are several tax credits you can claim too.
“Fringe benefit” is a broad term used to describe additional company benefits that may be less common. These can vary by industry such as free meals for restaurant workers or free exercise classes for gym employees.
Examples of fringe benefits that have become popular are:
Additional Free Benefits
Not all benefits have to cost the company money. The most sought-after workplaces offer free benefits such as:
When deciding the types of benefits you want your business to offer, you’ll want to think about your company culture and the kind of employee you want your business to attract.
A traditional benefits package will always have its place, but there are so many other benefits you can offer to add value to your employees.
The key is to imagine the different ways you can appreciate your staff and create desirability in the experience with the company.
An employee that feels appreciated and encouraged to balance their-life commitments, will produce better quality work for the company. It’s a win-win for both parties.
At a time where remote working has increased the job opportunities, you can spend less time recruiting if you invest in the employees you have.
Although the cost of employee benefits varies by industry and company size, it’s generally health insurance that requires the biggest contribution from employers.
After health insurance, legally required benefits such as social security, worker's compensation, and unemployment cost the most money to employers. These benefits are paid on behalf of part-time and full-time employees. Next up are paid time off and retirement savings.
Understanding the different types of benefits can help your company stand out among jobseekers and define your company culture.
If you offer additional value beyond typical wages, your employees are more likely to feel happy, produce better work, and stay with the company longer.
If you want to grow your business and stick around for the long haul, it’s important to offer benefits that will keep your employees healthy and happy.
There are endless types of strategies in business. Two central approaches are corporate strategy and business strategy. Find out the key benefits and differences of each.
Figuring out finances? You’ll need to keep balance sheet reports and create income statements. Read on to find out what to include and the difference between the two.
Priorities and deadlines are everything in business. If you’re looking for strategies to help improve task prioritization and ways to conquer deadlines, read on.