Employee benefits are imperative for attracting and retaining a productive, engaged, and satisfied workforce. After salary, health insurance plays the largest role in the consideration of a job offer, with 54 percent giving it serious consideration. Moreover, approximately half of employees in one major survey cited their benefits package as a key reason they stay with their current employer.
Benefits can take many forms, from multiple health insurance options to student loan assistance (see the graphic, below). Employers are required to contribute to workers’ compensation and unemployment insurances, but many extend their benefits to include paid parental leave and retirement planning assistance — and everything in between. Read more to learn how thoughtful benefits packages can set your business apart from the competition:
1. Start With Health Insurance
Deciding to offer a group health insurance plan is one of the biggest decisions an entrepreneur faces. The selection and implementation process can seem overwhelming and the costs may seem like too much of a drag when you’re aiming for rapid growth. That said, businesses that offer health insurance as part of their standard employee benefits package can reap a number of benefits.
First, nearly half of respondents cite health insurance as either a deciding factor or positive influence in choosing their current jobs. A robust package can help differentiate you from competitors during the hiring process while allowing owners to offer lower starting salaries. Employees are also likely to be more engaged at their jobs and miss fewer work days if satisfied with their coverage. Finally, employees are more likely to stay with their firms, lowering turnover-related costs, if content with their health plans.
However, it’s not just about employees: businesses offering health insurance can deduct a portion of their contributions from Federal business taxes. Some organizations may also be able to benefit from additional savings via such programs as the Small Business Healthcare Tax Credit. Contact a business tax professional to ensure that you are taking advantage of every opportunity available to you.
2. Consider Paid Time Off For Your Employees
Paid time off is a simple way to improve morale and performance. Many employers view it simply as a potential cost but every employee needs a break from the daily grind. A well-thought out PTO plan in which employees are encouraged to take their earned time away from the office has been shown to improve employee productivity. Employees who forfeit vacation days are also less likely to be promoted and more likely to have unexcused absences.
Another burning issue (and opportunity to set your business apart!) is paid family leave. America continues to lag industrialized peers despite 66% of job candidates reporting that paid parental leave is important. While many entrepreneurs think offering paid leave out of reach, even a small benefit above the legal requirement can set a small business apart from the competition. Consider including more cross-functional training and education in your business strategy to mitigate against disruptions caused by time away from the office.
3. Think About Work Flexibility As A Benefit
If there is a silver lining to the recent COVID-19 pandemic, it’s the realization that much of what many employees do can be effectively tackled from a remote or hybrid setting. The option to work from home part-time can be leveraged as another benefit that sets your business apart from the competition while costing a business owner little, if anything, in terms of hard costs. With careful planning, entrepreneurs may even be able to leverage remote work as a means to lower lease and related energy costs.
Of course, not all industries and roles are conducive to a remote setting and hybrid work could put more of the onus on managers. You’ll need to develop new plans for onboarding, mentoring, training, and team building. But given the current trends in the workforce, small business owners that adapt now can attract top talent, sooner, while also ironing out the kinks in their processes during the early-going.
4. Help Them Plan For Their Future
An employee who has saved for retirement is motivated, while employees who are playing out the string may become a burden on your business. A well-managed and tailored retirement plan is one of the best tools for recruiting new employees and keeping tenured employees more engaged. Although many businesses have retirement plans in place, we commonly find a strong disconnect between the company and its employees’ interests, and what their provider offers.
A sound team of financial advisors in your corner should help you to evaluate your full range of retirement planning options for employees, including:
- 401k Retirement Management
- Profit-Sharing Structuring
- Defined Benefit Planning
- IRAs, Roth IRAs & Conversions
- Employee Stock Option Planning
Whether searching for an evaluation of your current plan or looking to create a new plan, make sure that you look for a variety of investment opportunities that can help enable financial success, as well as packages that encourage employee retention. These offerings can vary greatly depending on industry, tenure, and role.
Employee benefits can take many forms. The central theme tying each of the above options together is that savvy small business owners approach benefits as a possible opportunity, not just an added cost. A thoughtful benefits package can set your business apart from the competition, helping you attract and retain talent. In today’s hyper-competitive labor market in which employees are looking for work-life balance more than ever, your benefits package can become a key differentiator.
At Magellan, we believe it’s our job to match your personal and professional vision with a plan to pursue it. Together, we will help you protect you and your business from risks, create a diversified set of potential income sources, develop an engaged workforce, and rest easy with comprehensive retirement offerings for you and your employees.
Wells Fargo Advisors Financial Network and its financial advisors provide non-fiduciary services only. They do not provide investment advice [as defined under the Employee Retirement Income Security Act of 1974 as amended (“ERISA”), have any discretionary authority with respect to the plan, make any investment or other decisions on behalf of the plan, or otherwise take any action that would make them fiduciaries to the plan under “ERISA”.
Wells Fargo Advisors Financial Network and its affiliates do not provide legal or tax advice. Transactions requiring tax consideration should be reviewed carefully with your accountant or tax advisor. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), member SPIC. Magellan Financial is a separate entity from WFAFN.