Benefits are a big part of why employees show up to work. In fact, benefits are almost as important to employees as compensation. Which benefits do employees value most? That depends on the person.
Health insurance is important to employees with families. Gym memberships may be important to young professionals. Retirement benefits are valued by older workers. How do you know what is important? Ask.
Don’t overlook perks that will attract and retain good employees. Look at options for allowing employees to work remotely or flex their schedules. Work-life balance is the mantra for Gen X’ers. Paid time off benefits are a big part of that striking that balance.
Employees also appreciate being appreciated. Recognition programs can be very meaningful to employees. Casual Fridays are well-loved. Potlucks. Parties. Movie tickets. These count as benefits along with medical insurance and cost a lot less.
Don’t be afraid to think outside the box. Just be careful to only initiate benefit programs that you can sustain. For example, small organizations may treat employees to lunch on their birthdays. That’s easier to afford when you have 5 employees: not so much when you have 50. Keep your benefits affordable, sustainable and easy to administrator. Otherwise, you will be creating a benefit anchor.
Most benefits are not required by law! Medical insurance is required for large employers. Small employers do not have the same mandate. Unless required by contract (think SCA), paid time off benefits are not required. Vacation? No. Holidays? No. Sick? No (not yet anyway).
Contrary to popular opinion, lunch breaks and rest breaks are not federally required and only required in some states. What is required is compensation for rest breaks under 20 minutes (in Texas). Compensation is also required when employees work while taking a lunch break. Eating your desk = compensable work time.
If benefits are not required, then why do so many companies offer employee benefit packages? The answer is: to attract and retain good workers. Benefits are important to workers who plan to stick around. In fact, those same workers will leave well-paying jobs for employment that offers better medical and retirement benefits and more paid time off.
Benefits save money in a number of ways. Medical and retirement benefits are tax deductible for both the employer and the employee. Supplemental benefits can be setup as pre-tax benefits. Even though employees pay for their own policies, the pre-tax deductions can lower the employer payroll taxes liability as well.
Studies have also shown replacement costs for employees, who leave their jobs, average 50% of their annual wages. This includes recruitment, training and productivity costs. Employees will leave their jobs for better benefits. Employees will take pay cuts for better benefits.
In 2017, The Bureau of Labor statistics published a comparative study of benefits offered by private industry companies with public municipalities and union. Read the study here. If you want to see how competitive your organization is in benefits, compensation and turnover, check out www.bls.gov for your industry.