I have worked for the same company for 21 years. It is a great place to work and, for the majority of the time, going in each day has been a pleasure. What makes a company the kind of place to inspire that kind of employee loyalty? For many people, benefits play a major role in the decision of where to work. Your company's benefits package can provide a huge advantage to the employee and the employer.
Recently many companies have had to reduce or even eliminate benefits entirely due to cost considerations. As everyone is aware, health care costs are rising and will likely continue to do so. This has put an enormous financial strain on companies trying to maintain good healthcare benefits for their workers. Some have decided to drop such benefits entirely, concluding it just is not worth the expense. Is this a wise conclusion?
Think of this: A company's employees are the only asset that can appreciate in value. When you eliminate benefit programs you are running a great risk of demoralizing your work force and forcing them to seek alternate employment. This will definitely affect your bottom line.
Consider offering benefits that may put a little strain on the budget, but will be invaluable in showing your employees they are valued and their needs are important. Some basic benefits that should be offered employees are as follows:
1. Retirement Plan (401K). This plan allows employees to invest a portion of their income on a tax deferred basis. The money invested will grow tax free until retirement. This plan offers special tax advantages, as the money invested consists of pre-tax wage deductions. This lowers the employee's gross taxable wages, which in turn means less payroll taxes for the company. When the employer decides to include its own monetary contribution to the plan for matching the employee, goodwill is created, as is the ability to retain quality employees. In spite of a nominal cost for implementing the plan, plus its annual maintenance fees, the employer will make up the costs by having and keeping an experienced base of employees.
2. Section 125 Cafeteria Plan. Under this plan the IRS allows employees to pay for certain expenses with pre-tax dollars. For example, whatever the employee contributes each month toward his healthcare premium can be deducted before taxes. Another component of the plan is the Flexible Spending Account (FSA).This allows the employee to use pre-tax monies to pay for non-reimbursed medical expenses, such as co-pays and eyewear. In fact, as of September 1, 2003 the IRS has expanded FSA to include over-the-counter medications. The Dependent Day Care portion of the plan allows employees to pay for licensed day care services, also using pre-tax monies. This plan not only benefits the employees by allowing them to use pre-tax monies for these expenses, but benefits the employer by lowering payroll tax liability.
3. Long Term Disability. Long term disability insurance tells your employees that you care about them and their families. If an employee becomes disabled and cannot work due to a non-work related injury or illness, LTD can provide them with at least some income to cover expenses. LTD is very affordable and many companies make this a company paid benefit.
The issue of health and dental insurance is becoming a real budget buster and a nationwide issue in the political arena. These plans help your employees stay healthy and productive. There are other programs you can implement as well. One such is AFLAC, which has a wide range of optional insurance products for employees, such as accident, life, dental and disability.
As an employer, consider using bonuses at meaningful times, not just at holidays when it's expected, but rather to reward employees when it is least expected for their effort and hard work. Want to see someone go the extra mile? Give them a meaningful bonus check. They will make that money back for you. What better way to show employees you care than to provide a good benefit package? Good companies find good people and good people stay with good companies.
How is your turnover?