Building an employee benefits package is a highly effective way to attract and retain talent. Any competitive benefits package should appeal to new candidates and provide unique advantages not offered by your competitors. It should also satisfy the needs and goals of current employees who you wish to continue working for your company long-term. Introducing a benefits package can impact morale, boost motivation, and provide a better quality of life for your employees. A competitive benefits package should include required benefits, such as worker’s compensation and social security, as well as optional benefits like health insurance and retirement plans. An experienced benefits consultant like those on our team here at Business Benefits Group can help you better understand the needs of your employees and develop an enticing package that will attract the cream of the crop.
Performing a Benchmarking Analysis
Benchmarking is a valuable tool that can provide insight on your competitors and identify gaps in your business’s operations to achieve a competitive edge. You may be paying too much for certain benefits or not offering the right incentives to retain employees. Benchmarking should be performed at least once a year to see how your business stacks up against the competition. When conducting a benefits benchmarking analysis, compare your business’s benefits to those of like employers in your industry who have a similar geographic location and size. Look at all aspects of the comparison, from the total out-of-pocket cost per employee to the percentage of the overall premium paid.
Once comparisons have been made between you and your competitors carefully evaluate how your business handles benefits. While you may already have a strategy in place for providing employee benefits, this strategy may not be sufficient. Benchmarking can help you determine where you are overspending or underspending and if you’re offering or not offering the right types of benefits. With your newfound data, you can better strategize what levels of benefits you want to offer to improve retention. Performing an analysis comes with some challenges. If you need assistance, a benefits consultant can help put together an analysis for your business.
Building a Benefits Package
A strong benefits package can make a significant difference in employee retention. Fringe benefits such as health benefits and dependent care services can help employees obtain the benefits they need without sacrificing their paychecks. Within a benefits package you should find employee benefits that you must provide by law, such as social security, as well as optional benefits that can appeal to new and current employees, such as insurance coverage. A benefits consultant can walk you through these benefits and their legal and tax implications.
The laws that govern employee benefits are put in place to create a better quality of life for employees and their families. The law requires employers to provide certain benefits to employees, such as the following:
- Workers Compensation: A form of insurance that provides coverage to employees who become injured or ill at work.
- Unemployment Insurance: This insurance provides compensation to employees who lose their job through no fault of their own.
- Social Security Taxes: These taxes are required to be paid on employees. Both the employer and employee pay a percentage of the SS rate which is currently 6.2%.
- Family and Medical Leave: This benefit enforced by the Family and Medical Leave Act (FMLA) allows employees to take at least 12 weeks of unpaid time in a 12 month period.
- COBRA Benefits: These benefits are required for employers who have 20 or more employees subject to the Consolidated Omnibus Budget Reconciliation Act of 1985. With COBRA, employees are allowed to maintain insurance coverage at group rates for at least 18 months.
Unlike required benefits, optional employee benefits may be offered to employees as part of the employer’s compensation package. These extra benefits are intended to recruit and retain employees by offering perks not available at many other jobs. Such benefits may include:
- Retirement Plans: A financial agreement designed to replace an employee’s income upon retirement.
- Life Insurance: An insurance policy that pays out a sum of money after a set period of time or on the death of the insured person.
- Health Insurance: This type of insurance coverage covers all or a percentage of the cost of an employee’s medical or surgical expenses.
- Vision Plans: A vision plan will typically cover or reduce the costs of routine preventative eye care such as eye exams, as well as prescription eyewear.
- Dental Insurance: This insurance is designed to pay all or a portion of the costs associated with dental care, such as cleanings, fillings, or caps.
- Paid Leave: Paid family leave is money provided to an employee while he or she is away from work for an extended period of time. The cause for paid leave can vary but is often due to the birth of a new child, a newly adopted child, a serious health issue, or the care of a seriously ill family member.
- Disability Insurance: This type of insurance plan provides periodic payments of benefits when a disabled insurer is no longer able to work.
Working with a Benefits Consultant
A benefits consultant advises an employer in various matters relating to employee benefits and group insurance. Benefits consultants have vast knowledge of both required and optional employee benefits and can guide you in the right direction when creating your own personalized benefits package. A benefits consultant uses a variety of tool to help employers compile an appealing benefits package, such as performing an in-depth analysis of a company’s business to create a budget and determine which benefits offer tax advantages. Using this information, a benefits consultant can advise a business on what benefits they should provide.
Developing an employee benefits package can be complex. Most companies can greatly benefit from the advice and guidance of a benefits consultant. Choosing the right benefits consultant is the first, and most important, step in ensuring that your benefits package is up to par with the competition. Contact our team here at Business Benefits Group (BBG) to schedule a consultation and learn more about creating a winning benefits package for your employees.