So for years the human resource experts have been preaching that employee benefits are more important than compensation in hiring and retaining employees. Yet with the myriad of possible benefits, they have never articulated whether you need to offer all benefits or if there are a select few that are more critical. Also, with the changing landscape with pension plans being phased out by most companies, skyrocketing healthcare costs and more recently the Affordable Care Act, has the perspective of employees changed. Now a recent survey of 54 employees benefits has identified the three critical benefit plans that companies need to be competitive in hiring and retaining good employees, especially in the current tight labor markets.
Not surprisingly, first on the list is heath care insurance. Premiums continue to increase faster than salaries and inflation and under the Affordable Care Act everyone must have coverage. While subsidies exist for lower paid individuals, for the average worker the cost can be astronomical for just basic coverage. Therefore, it is easy to see why having access to a company plan that can provide better coverage and is subsidized by the company contributions is most important to employees.
The second most valuable benefit is paid time off. The standard two weeks of vacation that baby boomers accepted is a thing of the past. The standard is now four weeks of vacation time and some companies have implemented policies with unlimited vacation. However, it is more than just vacation time. Having additional time off, paid or otherwise, for extended maternity and paternity leave is also desirable. With millennials, who place a much higher value on their personal time and life experiences than prior generations, comprising an increasing majority of the workforce, this benefit will continue to rank highly.
The third is access to a retirement plan. While pension plans are pretty much a thing of the past, other than for government workers, there are other options available to small businesses. 401(k) plans are the most common and today allow workers to save up to $19,000 a year, $25,000 for workers 50 and older. They also offer both the traditional pre-tax deductions and Roth contributions and provide and option for loans. SIMPLE plans, both IRA and 401k, are available and require less administration, but also are more limited in contribution amounts, both by employees and the company.
In conclusion, the best way to keep your employees happy, productive and working for you, is to focus on these three. You can ignore all of the other ancillary benefits and make sure you get these three right. However, remember that the sword can cut both ways so be careful with any plans to make cuts to any of these established benefits.
Although this all sounds simple, most small businesses do not have enough experience to know how to draft a proper vacation policy, shop for cost effective healthcare or setup and maintain a retirement plan in compliance with federal regulations. The good news is that Total Team Solutions has been helping hundreds of small businesses do just that for more than 30 years. We also offer turnkey solutions in the form of large group benefit plans that are quick and easy to implement. To find out more about how Total Team Solutions can help your small business setup benefit plans that will help you to hire and retain the best workers, contact John Morlock at email@example.com or call him at 800-836-9678, extension 5.