Building a competitive employee benefits package is one of the most effective ways to attract and retain high-quality talent. A well-structured benefits package may include a number of components, such as health insurance coverage, dental insurance, flexible spending accounts, retirement savings plans, vacation time, and additional paid time off. Some benefits, such as a 401k or a pension plan, are optional but can be enticing to professional employees and applicants. As setting up a comprehensive employee benefits package can be long and complex, many myths have been created due to lack of knowledge or confusion. Here we will debunk these myths.
1. Applicants and Employees Make Decisions Based on Salary
Many employers make the mistake of offering minimal benefits as they believe that job applicants and employees are focused on salary alone. While salary plays a major role in talent attraction and retention, it’s far from the only influencing factor. Many applicants and employees are driven by benefit packages that aim to make their life better. To determine what benefits your employees would be interested in, consider using an employee survey to rank benefits by importance. In addition to using employee surveys, compare your current employee benefits package against your competitors, both locally and nationally, to see where you stand.
2. Employee Benefit Packages are Optional
Not all employee benefits are optional. Employers are legally required to supply employees with certain benefits according to state and federal labor laws. Such benefits include workers’ compensation, leave benefits, and unemployment insurance. Employers must also pay Social Security taxes at the same rate as their employees. However, other employee benefits are optional, meaning not required by law. These benefits may include paid vacation, paid sick time, vision insurance, dental insurance, life insurance, and retirement plan options. Employers are also not required to provide thrift or savings plans, healthcare benefits, long term care insurance, health or wellness programs, child care subsidies, or flexible spending accounts.
3. Replenishing Trimmed Benefits Is Not Worth the Cost
Some employers feel that replenishing slashed or cut employee benefits is not worth the cost. This can cause frustration for employees who would like to see these benefits reinstated or increased. While making deep cuts can be wise if your business is experience difficult times, it can be beneficial to reinstate these benefits when the budget allows. Replenishing employee benefits shows your employees that you are sensitive to their needs and active in the company to make things better for workers. Bringing back certain benefits can also help build a trusting and understanding relationship between employers and employees which is beneficial for all.
4. We Have to Wait Until the Start of the Year to Make Changes
As you’ve developed your employee benefits package, you may have considered making changes to certain benefits such as health insurance. While it may seem practical to wait until the start of the year to make any major changes, waiting isn’t always best. When making the decision to make improvements, it’s wise to implement these improvements as soon as possible so that you can yield the benefits sooner. If altering your health insurance plan will save your company or employees money or make your employees healthier and more productive, make the choice to implement changes right away instead of waiting until the beginning of the year.
5. Millennials Don’t Need Life Insurance Benefits
While there are no precise dates when millennial birth years start or end, millennials are considered those with birth dates that fall between the early 1980s and mid-1990s to early 2000s. As these individuals are considered “young”, some employees believe that they don’t need life insurance. Despite what some people may believe, buying life insurance when you’re young can have its perks. First let’s start by saying that life insurance is considerably cheaper when you’re young and healthy. For millennials with dependents, life insurance can also provide greater peace of mind and a safety net in the event of a tragedy which can occur at any age.
6. Employers Must Offer Paid Time Off Benefits
Many employees believe that they are entitled to paid vacations, time off for holidays, and other sources of paid time off. In reality, they are not. As an employer, you are not obligated to offer paid time off benefits and there is no law that forces you to offer these benefits. However, having paid vacation days and paid holidays is a major incentive when building your employee benefits package. Many job applicants and employees are more willing to take a job or stay at a job where they are allowed paid time off for personal reasons or for sick days, vacation days, and holidays.
7. There Is No Such Thing as Too Many Employee Benefits
As an employer, you want to offer your employees as many benefits as possible to create an attractive incentive to join your company. However, it’s important to balance employee benefits that are required by law with optional benefits that are not. As a generous employee benefits package can quickly drain your company’s funds, it’s important to choose your benefits carefully. Start by choosing the most common employee benefits that will benefit the greatest amount of employees, such as health insurance and paid time off. If there is still wiggle room in your budget, add other optional benefits, such as employee discounts or wellness benefits.
As an employer, it’s in your best interest to build an employee benefits package that will entice new job applicants and encourage talented employees to stay. This isn’t always easy, especially when your company’s budget allows little room for benefit options. Consulting with a benefits consultant can be highly helpful when choosing benefits and setting up your package. At the Business Benefits Group in Fairfax, VA, our team of experienced and knowledgeable benefits consultants is ready and able to help guide you through the process of setting up your employee benefits package. Contact our office today to request a consultation and feel more confident about your decision regarding your employee benefits package.