When prospective employees ask about benefits, what they usually mean is, what health insurance options do you offer? While it’s not uncommon to see the word benefit used interchangeably with medical insurance, employee benefits encompass a much larger offering.
First, let’s take a look at a definition. An employee benefit is an indirect form of compensation that is in addition to an hourly wage or salary. So, of course, employees must be paid for their time. But the difference between what makes one data entry job good and another fair is in the indirect employee benefits. Here’s what you need to know:
Employee benefits are a common-sense approach to attracting and retaining skilled workers. Companies know that there are millions of companies competing for workers with the same skills. The only way they can attract those skills is by offering the right mix of pay and benefit plans.
Deciding which benefits to offer is no small task. You’ll need to work with key stakeholders to determine a budget and a strategy. And then you’ll need to put everything in writing, sign up with the appropriate vendors, and integrate workflows to ensure that benefits are administered in a timely and fair manner. First, choose what you will offer.
There are three main types of employee benefits:
It should go without saying that you’ll need to satisfy any government mandates first, like the Affordable Care Act, FICA payroll taxes, and family and medical leave act. Conditions can vary by state or region so be thorough in determining which benefits you are legally required to offer and select options that satisfy those requirements.
Then, consider which benefits are typical or expected. Add as many as you reasonably can within your budget. An option for paid time off like a PTO policy and paid parental leave are fairly typical.
If you have any room left in your budget, look at discretionary benefits that you can add. These work particularly well if they are relevant, useful, and not offered by your competition. For example, your company could adopt a policy that provides three additional paid days off for mental health.
Employee benefits range from the bare minimum to expansive lists of every perk they can think of. One approach is not necessarily better than the other. The key is to figure out what is important to your ideal employees and offer that in hopes of attracting and retaining the right talent.
The basic lineup of employee benefits (offerings you can find just about anywhere), include:
Additional (less common) employee benefits that are favored in the US include:
As you design your employee benefits program, there is no argument against required benefits. Of course, those will be included. And there isn’t a very strong argument against industry-standard benefits. If everyone else is offering them, you should too or find a different strategy for attracting talent. The pushback really comes from the argument for or against the perks, bonuses, and extras. How important are those nice-to-haves?
The skills gap is growing and good talent is becoming increasingly difficult to find and keep. If you’re struggling to fill open positions, your benefits line-up may be able to do more to help your cause. More than half of survey respondents consistently say these benefits play a big role in their decision to accept or keep a job.
Here’s what you should be considering in 2022:
Employee benefits are part of the compensation package. Even if you take a no-frills approach to paying your employees, there are still a few benefits that you will be legally required to offer. Group health insurance is often one of those required benefits. Taylor Benefits can help you understand how to meet your obligations and offer the right mix of benefits to your employees. Give us a call today.
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