Why do Benefits Matter?

Better benefits consistently rank at the top of most employees' desired perks from their employer. The term “benefits” includes a range of offerings that include not only lifestyle-oriented perks (such as flexible paid time off or free meals), but also compensation components that are key to employees’ financial security (such as access to medical insurance and retirement offerings). When you are evaluating the benefits your company offers, knowing and using best practices can help you attract and retain top talent in your industry.

A great benefits package shows both existing employees and potential new hires that you care about your employees and want to reward them in ways beyond a wage. In today's marketplace, a well-designed benefits offering can be the decisive factor for many candidates when deciding which companies they want to work with. 

Importance of Benefits

Over the last year, regardless of a company's size, the cost of employer-provided healthcare benefits increased roughly 20% across all businesses in the United States. Standing desks increased by 7%. Student loan repayment support increased by 4%. Across the board, companies see the value of providing top-notch benefits to their teams. 

Wellness programs have also increased in popularity. Many wellness programs have actually shifted their focus away from healthy eating and focused instead on healthy activities and quiet rooms. These activities not only help to keep employees healthy and reduce their healthcare costs, but it also helps to keep employees focused. By providing quiet rooms or telecommuting options, you can give your employees dedicated time to focus on their tasks, in private and in a quiet setting. 

Necessary and Voluntary Benefits

Certain benefits are required by law, and some are funded through taxes.  For this reason, these items are often overlooked as benefits to the employees although the costs to the employer are significant.  These benefits include:

• Unemployment insurance (funded via state and federal taxes)
• Workers' compensation insurance coverage (legally mandated in most states)
• Disability insurance (limited in scope and funded through Social Security taxes)
• Retirement income (limited in scope and funded through Social Security taxes)
• Family medical leave (FMLA)

In addition to these mandated items, the Affordable Care Act (ACA) requires that some employers offer health insurance. If a business employs 50 or more full-time employees (or the equivalent), the business must offer health insurance that meets minimum standards, which is categorized as an ACA-compliant plan. If a company fails to offer this benefit, they could face steep fines and penalties. 

Although health insurance isn’t legally required for most businesses under 50 full-time employees, it’s often helpful for smaller businesses to offer medical benefits to attract and retain talent.  It’s essential to have a strong working knowledge of insurance carriers and networks, medical insurance plan options, contribution strategies, and specific plan features in order to design a health insurance program your employees value and use.

Unlike mandatory or necessary benefits, voluntary benefits are at your sole discretion as the business owner. You may choose to offer lots of benefits or few. But keep in mind that the quality of voluntary benefits you offer can make a difference in your ability to attract and retain top talent. 

Voluntary benefits have a startling range. The most popular options include:

• Tax-advantaged retirement plans, with or without employer match
• Paid time off (PTO)
• Life insurance
• Hospital Indemnity plans
• Short-term and Long-term disability insurances
• Paid sick leave
• Paid holidays
• Wellness programs
• Telecommuting options
• Flexible work hours
• Free meals
• Pet insurance
• Corporate discount programs
• Company-sponsored happy hours or social gatherings
• Service anniversary gifts

The great thing about voluntary benefits is that you can be both creative and tailored to the specific needs of your employees. 

Why Benefits Matter

Your employees want to get paid well for their position, but even competitive salaries do not make up for a poor benefits package. When you put together a strong and comprehensive benefits package that goes beyond the bare minimums, you signal to your employees that you care and you attract and retain top talent in your company. Providing exceptional benefits to your employees is a win-win for both sides. Your employees want good health, vision, retirement, and other benefits, and you get to enjoy better retention rates because of higher employee satisfaction.