Employee benefits will cost your business. There is no avoiding that, but the pros outweigh the cons. Advantages of offering benefits include better recruitment and retention, greater wellness and productivity, tax advantages, and a more positive company culture. Developing a benefits package represents a leap in the growth of your company. A major step in the process is deciding what benefits to offer.
What Are the Steps for Building a Benefits Package?
Building an employee benefits package can seem like an overwhelming undertaking. Start slowly and assess the actual cost of each benefit. Take the following steps to help simplify the process of determining which benefits to offer.
Review Legal Requirements
Learn what benefits you are legally required to offer your employees. These may include:
- Employer match for Social Security and Medicare (FICA) contributions
- Health insurance (for employers with 50 or more full-time equivalent employees)
- COBRA benefits (for employers with 20 or more employees)
- Family Medical Leave Act (FMLA) benefits (for private sector employers with 50 or more employees)
- Workers compensation insurance
- Unemployment insurance
Establish a Budget for Total Compensation
Draw up a budget including salaries, business expenses, and required benefits and determine how much is left for a benefits package. Use this figure to decide what benefits your company can afford to offer employees.
Decide Which Benefits Are Necessary
You will need to offer certain benefits to remain competitive with other companies. In this step, you determine which benefits are essential for that purpose. Your list of necessary benefits may include paid time off, paid holidays, group health insurance, dental and vision insurance, group life insurance, and a retirement plan, such as a 401(k).
Determine Which Additional Benefits to Offer
If you have room left in the budget, decide which additional benefits that your company can afford would be most attractive to current and prospective employees. This may include a flex schedule, free daycare services, fitness classes, gym memberships, etc.
Which Benefits Are Most Desirable to Job Seekers?
The preferences of employee benefits can vary according to demographics. For example, Baby Boomers, Generation X, and Generation Z value health and wellness over working hours and leave, while Millennials are more concerned with work-life balance. According to an article in the Harvard Business Review, the most valuable benefits to job seekers are:
- Health, dental, and vision insurance
- Work-from-home options
- More flexible hours
- Unlimited vacation
- More vacation time
Are Employee Benefits Taxable?
Employees pay state and federal income tax on salary, bonuses, and benefits in the form of supplemental income. However, some benefits offered by employers are not subject to income tax. This includes healthcare flexible spending programs and gym or athletic club memberships.
Can I Get Assistance With My Employee Benefits Package?
The task of creating an employee benefits package can be daunting. Our experienced agents are here to help. We are happy to sit down with you and discuss your options and to help you build a package that fits your budget and helps you attract and retain top-tier employees.