Fringe benefits are a form of compensation provided to employees outside of their standard salary or state wage. There are a variety of types of employee fringe benefits, such as medical insurance, housing allowance, use of a company car, vacation pay, employee discounts, and education assistance. When making a decision to accept a new job, many employees base their choice partially on the fringe benefits offered. This means that your company can use fringe benefits as a tool to help acquire and retain talented employees to create a productive and successful workforce.
As an employer, you want to build an attractive compensation package that makes your employees want to stick around. Fringe benefits are important to many job hunters, making them a wise investment for employers looking to improve employee retention. While the advantages of offering employee fringe benefits are indisputable, it is important to choose the right incentives for your needs and wallet. Here is a look at some of the top employee fringe benefits that are known to improve employee retention.
1. Insurance Coverage
Some of the most common fringe benefits offered to employees include insurance coverage. Health insurance is often sought after by employees, especially those with families. Some employers are required to offer health insurance by law to any employee who works at least 30 hours per week. This includes employers that employ more than 50 people. Most health insurance plans provide coverage for visits with primary care physicians, as well as specialists, and also emergency care and hospitalization. Other types of insurance coverage may also be offered to employees, such as dental care, life insurance, and in some cases short- and long-term disability coverage.
2. Paid Holidays
Companies are not required to give employees time off from work or paid time off on holidays. These types of benefits are often an arrangement made between employers and employees, or a representative of employees, such as a union. Holiday pay is paid on certain holidays, such as Christmas Day. While salaried workers do not usually receive extra pay for working on a holiday, employees in hospitality or retail may receive extra pay or overtime. To stay competitive, some employers may choose to provide workers with extra compensation when they work holidays or offer a floating day off.
3. Education Assistance
Another common type of employee fringe benefit is tuition reimbursement for college courses or some other type of education assistance. Many employers that offer these types of fringe benefits allow their employees to maintain flexible schedules, which allow them to adequately juggle both their work and educational obligations. Some employers will pay for a portion of an employee’s tuition, while others will cover the entire cost. Education assistance can be beneficial to both employers and employees. While employees get the opportunity to further their education without going into debt, employers are able to retain workers who have competitive educational backgrounds and skills.
4. Vacation Leave
How much vacation time employees have is based entirely on the company or organization they work for. There is no set number of vacation days as employers are not required to offer vacation leave, whether paid or unpaid. However, many employers do choose to offer these fringe benefits, usually only to full-time employees. Company policy usually dictates the amount of vacation time given and any other rules surrounding vacation leave. When vacation leave is offered to employees, it must be offered equitably to avoid discrimination based on gender, race, religion, or any other protected characteristics.
5. Profit Sharing
Some employers choose to reward their dedicated employees with profit sharing plans. A profit-sharing plan is a type of contribution plan that allows businesses to help employees save for their retirement. With profit sharing, all contributions from employers are discretionary, which means that an employer can decide each year how much they would like to contribute. They can also choose not to contribute at all if they wish, such as when they do not make a profit. Profit sharing plans are highly flexible, which makes them an excellent retirement plan option for companies of all sizes, including small businesses.
6. Employee Housing
While not as common as the other types of employee fringe benefits, some employers do offer to pay employee housing expenses. There are a number of arrangements that can be set up, such as an employer paying for the housing of an employee’s choice via a housing allowance, an employer offering housing at a specific location, or an employer offering lodging for employees when they travel for business purposes. Based on the unique circumstances, employee housing may be taxable to employees and these benefits can often act as a deductible business expense for companies. However, it is important to be aware of all the laws and regulations that apply in this type of tenant-landlord relationship.
7. Cafeteria and Meal Plans
Some larger businesses may have cafeterias on-site that are open to employees. This type of fringe benefit can be highly convenient for workers who do not want to bring a lunch or purchase a lunch elsewhere. The cost of lunches and dinners for employees who work late can quickly add up and put a financial strain on workers. With cafeteria and meal plans, employees can obtain a nutritious meal that not only gives them energy to be happy and more productive, but is also more convenient and results in less stress.
Where to Learn More
In a highly competitive market, employers are always looking for new ways to attract and retain talented employees. Fringe benefits are an effective way to get workers through the door and encourage them to stay. There are many types of employee fringe benefits that can be added to an employee benefits package. It is important to carefully consider your options and choose fringe benefits that will provide the most value to your workforce. To learn more about employee fringe benefits or for assistance creating a comprehensive employee benefits package, contact the professionals at Business Benefits Group (BBG).