PrintIf you’re setting up a benefit plan for your employees for the first time, congratulations. Employee benefits are one of the most important elements in hiring and retaining top-notch workers for your company.
As you think about the details and logistics of setting up a benefits plan, your first big task will be deciding which benefits you should offer your employees right away and which ones you should hold off on, perhaps until your company is larger and you can afford them. Following is a look at the most common employee benefits offered by most companies and some suggestions to help you set priorities as you establish your plan.
Health Insurance
Most workers consider this to be the most valuable (even essential) employee benefit. Unfortunately it’s also usually the most expensive benefit for companies to offer.
The main health insurance options, from most expensive to least expensive, are preferred provider organizations, or PPOs; health maintenance organizations, or HMOs; point-of-service, or POS, plans; and high-deductible health plans. High-deductible plans are usually offered in conjunction with tax-advantaged health savings accounts, which enable employees to pay for basic health-care needs up to the deductible with pretax dollars.
In addition, consider offering dental and vision coverage, which are usually separate from the core health insurance plan.
Retirement Plans
Retirement is usually the second most popular employee benefit. With the shift recently to what are known as defined contribution plans, the primary responsibility of saving for retirement has shifted from employers to employees, who expect the companies they work for to provide some type of retirement plan to help them.
Fortunately some cost-efficient options enable even very small companies to offer a retirement plan to their employees. These include simplified employee pension plans; savings incentive match plans for employees individual retirement accounts, known as SIMPLE IRAs; 401(k)s; Roth 401(k)s; and safe-harbor 401(k)s.
Vacation and Paid Time Off
Most employees expect at least a minimum number of vacation days and holidays. Many companies today are moving away from the traditional one or two weeks off a year plus major holidays toward more of a paid-time-off concept, in which employees receive a “bucket” of paid days off that they can use however they like, including sick days. For example, if an employee doesn’t recognize a traditional holiday and would prefer to work on this day, he or she can do so and save that holiday to use another day.
Some companies require employees to complete a minimum number of weeks or months on the job before they’re eligible for vacation time or PTO.
Flexible Work Arrangements
In today’s hectic society in which there are more two-income families and many employees are placing more emphasis on work-life balance, flex time is becoming an increasingly popular employee benefit.
The beauty of flexible work arrangements is that many employees value them highly but they cost your company little if anything, at least in terms of hard dollars. You simply allow employees to set work schedules and hours that are most convenient for them and their families, or perhaps even work from home (telecommute) full or part time.
Continuing Education and Training
Education and training can be a win-win benefit. Many employees appreciate the opportunity to sharpen, hone, and learn new job skills, thus making themselves more marketable. And your company will benefit from more highly trained and skilled workers.
Don Sadler is a freelance writer and editor specializing in business and finance.
