Other than annual compensation, a company’s benefit packages are typically the most important piece in attracting world-class employees. In working with a large variety of employers, we see a wide selection of benefit offerings, but the purpose of this article is to try to define what we’ve determined are the most attractive in terms of employer competitiveness.
1. Health Insurance
With the rapidly changing world of health insurance, this subject is at the forefront of virtually every employee’s mind. As coverage costs rise, employers are forced to walk a very thin line, with their employees’ best interests on one side and the company’s overhead on the other. Obviously, employees appreciate robust health plans with low deductibles and out-of-pocket exposures, but they also want their share of the premiums to be affordable. In an attempt to try to address both sides of that line, we often recommend that employers provide multiple plan options to their employees and contribute an affordable amount to each. This empowers the employees to choose which plan and pricing structure best fit their individual needs. If affordability is their top concern, they can pick the base plan. If having better benefits is more important, they can buy up.
2. Ancillary Benefits
Insurance benefits such as dental, disability, life, vision, and critical illness and hospitalization are always popular among employees. Newer offerings also include legal assistance and identity theft coverage. We encourage employers to allow us the opportunity to meet with their staff annually to explain each of these coverage offerings, as the need for each can vary based on the individual’s situation. Depending on the company’s size, benefits can typically be offered with or without an employer contributing to the costs.
3. Retirement Plans
The 401(k) profit sharing plan is the most common form of retirement plan we see, but SIMPLE IRA, SEP and 403b platforms remain popular as well. Communicated effectively, tying an employer’s contribution to the company’s profitability is a great way to improve employee morale and install a sense of ownership among the staff.
4. Paid Time Off/Vacation
It is no surprise that employees LOVE additional paid time off. We commonly see these additional rewards tied to milestones such as duration of service to the company or promotions, but tying rewards to specific goals can be extremely useful as well.
Other Benefits
Many of our employers offer creative benefit packages that fall into this category. Gym memberships, access to financial planning or tax professionals, event tickets, smoking cessation programs and childcare benefits are all ideas that we’ve seen in the marketplace.
We recognize that all employers are different, but we hope we can all agree that offering a comprehensive benefit program is key to both attract and retain the best talent.
No matter what benefits an employer elects to offer, we always recommend two things:
- Effectively communicate the cost of these benefits so that the employee values them in addition to their regular paycheck amount.
- Take the extra step that allows the employee’s portion of the premiums to be deducted on a pre-tax basis, as long as doing so doesn’t adversely impact the tax treatment of the benefit.