The benefits of employee benefits
Cash is not enough today to recruit and retain top talent for your business. Providing an attractive benefits plan is just as important.
While the costs can be exorbitant and the choices overwhelming, you can and should find ways to build a benefits program that works for your company. Here's help.
Find out what your employees want
It's critical to recognize just how important a competitive benefits package can be in recruiting the best staff possible. Gone are the days when salary in and of itself was lure enough.
"Competitive organizations, whether they are big or small, with benefits programs will be able to attract employees away [from you] -- especially if you don't provide the most fundamental programs such as health care, disability insurance and things like that. It's almost mandatory," says Lloyd Foight, a benefits consultant with the Ross Companies in New York.
The next step in providing a winning benefits program is to find out what your group is looking for. It's possible that subsidized or free parking could be more important to them than life insurance.
"Go to your employees and find out what they want," says Fred Lange, president of HR Architect in Los Angeles. "Give them a list of a dozen or so things that they can choose, and leave them room to fill in things. You'll find those unique quirky things that are related to your population."
The two essentials for every plan
While you might be faced with a variety of requests, experts say that there are two essentials for every plan: medical coverage and a retirement plan. Other coverage such as dental, disability and life insurance often are considered extras.
"Most people want to know that they're covered when they go into the hospital. So that's one of the things on the top of our list," says Larry Landes, president of Garden State Brickface, Windows & Siding in Roselle, N.J.
Meanwhile, retirement plans offer an opportunity to hang onto valued employees. You should offer to match or contribute some additional portion to what your employees put in, with the stipulation that the money will mature over a certain period of time. "The longer that people stay, the more likely they are to stay," Foight says. "The chance of them leaving a year from now is less than it is today."
Who pays for all of this?
One way or another, someone has to foot the bill for your employee benefits. However, it doesn't have to be you who picks up the entire check. You could even pass on the entire cost to your employees.
Here are three other options:
1. High deductible plan. Offer to help with medical costs once they go beyond a certain dollar amount, such as $2,000. Foight says this approach will cut down on the administration expenses and reduce the overall costs of the plan.
2. Cafeteria-style benefits. Here, employees pay for the benefits that they want on a pretax basis. The only costs that you will have to deal with are administrative.
3. Split the cost. Another effective strategy is sharing the cost of essentials -- such as medical care and retirement -- between the company and its employees. Extra coverage such as disability and life insurance are available at the employee's expense.
Communication matters, too
Once you've arrived at a plan that suits both you and your employees, let your people know about it. "People need to know that you're spending money on these things. They need to realize that and know that it is a benefit for them even if they choose not to participate in it," says Bruce Wynn, a compensation and benefits lawyer in Atlanta.
Lange recommends taking this level of awareness a step further and providing an itemized list with yearly tax statements. This way, the employees will know just what they're getting and what you've spent on them.
Michelle Collins is a staff writer at CanadaOne.com, Canada's premier business channel on the Internet, with articles, tools and other resources.