Employee benefits packages, including the federal contracting sphere, are essential to help businesses attract and retain qualified employees. However, federal contractors face unique challenges in designing and offering benefits that other organizations do not have to address.
They must compete with other contractors and traditional employers for talent while maintaining compliance with specific laws and regulations that apply to federal contractor benefits.
Here is a look at what to consider when tailoring benefits packages for federal contractors.
Employee Needs and Preferences
There is no one-size-fits-all solution for federal contractor benefits, as employees have different needs and preferences. Therefore, it can be helpful to interview your employees or carry out surveys to gain more insight into their expectations and what they value.
Many companies benchmark their benefits against those of their competitors to see how they fare and find ways to stand out from other employers.
Similarly, it is essential to consider your employee demographics when designing a benefits plan, including age, marital status, lifestyle, income level, and family size.
Older employees are often more interested in healthcare coverage and retirement options. In comparison, younger employees in the modern working world often seek flexible work arrangements and benefits related to wellness.
One of the most important considerations for federal contractors when designing a benefits plan is compliance. The type and size of a contract will determine which regulations and laws must be adhered to.
For example, contractors must be paid prevailing wages and fringe benefits when working on federal construction projects. Meanwhile, the Service Contract Act requires that certain minimum fringe benefits and wages be paid to service employees working on federal contracts.
Another significant regulation to remember is the Affordable Care Act, which requires every employer with 50 full-time equivalent employees or more to provide health insurance coverage to employees. Those who fail to do so will face a penalty.
Several other regulations may influence benefits for federal contractors, including the Employee Retirement Income Security Act (ERISA), the Occupational Safety and Health Act (OSHA), the Fair Labor Standards Act (FLSA), and the Family and Medical Leave Act (FMLA).
These laws are constantly changing, and businesses involved in federal contracting must stay informed of the latest regulations and changes and ensure they are in full compliance to avoid fines, penalties, and reputational harm.
Competition Within the Industry
It is unfortunate that the degree of competition within the sector in which a business operates dictates the type of benefits that should be offered. Businesses competing for federal contracts in highly competitive sectors experiencing high employee turnover and a lack of qualified individuals may need to focus on providing the most attractive benefits possible to retain top talent.
In contrast, those operating in less competitive sectors with low turnover and plenty of qualified employees may be able to focus on offering cost-effective benefits instead.
The Type of Contract Work the Organization Conducts
The nature of the work performed by the business and its risks must be considered when designing a federal contractor benefits plan. Relocation assistance plans and paid leave may be attractive benefits when work involves traveling or relocating.
Additional Types of Benefits
While health insurance and retirement savings plans are staples of benefits offerings, federal contractors should offer their employees additional options to create a more comprehensive package and improve their well-being.
Employee assistance programs, paid time off, wellness benefits, gym memberships, and mental health benefits are increasing in popularity and can help employers attract high-quality candidates.
Federal contractors struggling to fill vacancies might also offer flexible working hours or remote work to appeal to employees who cannot work a traditional schedule in person or are hesitant about a commute. Those unable to offer a fully remote position can design a hybrid program that reduces the number of days employees must be present in the office.
Learn More About Tailoring Employee Benefits Packages for Federal Contractors from Business Benefits Group
For government contractors, adhering to employee benefits rules and staying on top of the latest changes is essential. The employee benefits brokers at Business Benefits Group (BBG) draw on their extensive consulting experience and federal contracting knowledge to help businesses manage risks and improve recruitment and employee retention.