Docstoc
Human Resources

Understanding Employee Benefits

Hiring employees doesn’t just involve writing checks on a regular basis, it also means you’ll be responsible for providing employee benefits and you should fully understand them before you begin.

Not every company has to offer employee benefits, since this will depend on the state laws and how many hours your employees work, but it’s a good idea to find out what you should offer. Benefits are also key in the decision making process for potential hires. If you are offering better health insurance than the competition, you’ll probably get the employees you want. Look at this as an investment in your business: the happier your employees are, the more likely they are to work hard and to stay with the business. You can ensure employee loyalty and motivate them at the same time with these methods.

Health Insurance

This is one of the most sought after benefits for employees, since medical care can be extremely expensive. Offering a good comprehensive health plan will ensure that your employees stick around and they will also be much healthier.

Talk to your insurance provider about the different plans available and have your agent help you figure out which would work best for your business and budget. You can choose anything from basic emergency coverage to full coverage, which includes dental and vision. The more benefits, the more expensive the insurance will get. You may offer to pay a percentage and allow employees to deduct the remaining amount from their paycheck. In general, the employer carries at least fifty percent of the cost, making it more affordable for employees.

Other things to check when selecting insurance for your company:

  • Are family members covered?
  • Are pre-existing conditions allowed?
  • Are non-married partners covered?

Some employers also offer life insurance, which will bring costs up even more, but can be an excellent method of gaining the best employees. This also helps them protect their families in case of death.

Paid Leave/Holidays

Everyone gets sick sometimes and whether they are paid for the time they have to take off will depend on a few factors including the local laws and how your company handles things. It is customary to allow a certain number of sick days off each year, where the employee is not penalized for not coming in.

There are many other reasons for paid leave and in most cases, it is up to you to decide just what you will offer.

  • Paid jury duty
  • Paternity/Maternity leave (this will be mandatory in most places)
  • Bereavement time

You may also permit a personal day here and there as needed, which is excellent for employee morale.

Bonuses

Most employers offers some type of bonus during the holidays or for the New Year, but you can also offer bonuses for other reasons. A hiring bonus, for example, would be used to encourage someone to join your team and can help them make a decision.

Other bonuses might include a referral bonus for bringing new clients on board or a relocation bonus if you have an employee who will be moved to another area to work at another office. In these cases, the bonus is just a way to make the decision a little easier.

You may also wish to give a bonus to employees who do a particularly good job of something. Your best performers might receive a little extra on their paycheck as a thank you for their hard work. This should be in addition to the usual holiday bonuses which should reflect their hard work.

Planning for the Future

Some benefits are not immediately obvious, but they will have more value in the future. A good example of this is a retirement plan. You can choose to put money into a 401(k) for employees, match their contributions or another plan that you have in mind. Talk to an accountant before deciding this, since there may be other tax issues to consider.

Another way to offer something extra for the future is to give employees a share in the company. By making them owners of a tiny piece of your business, they will feel a sense of responsibility and ownership. Not only can they make a little extra money by owning shares, this is also an excellent way to cement employee loyalty.

Non-Traditional Benefits

Employee benefits are really limited only by budget and imagination. You can provide your employees with a wide variety of benefits, making yours the best workplace around, but it will cost you.

Some non-traditional options for encouraging employees to stick around include:

  • Child-care
  • Education/training
  • Company gym
  • Cafeteria or lunch delivery
  • Weight loss programs
  • Dry cleaning or laundry services
  • Travel reimbursement
  • Company vehicle

The sky is the limit, so talk to your employees and get a feel for what they would like to see in their benefits package. Of course, it will also depend on the budget you have, so keep this in mind when planning what to offer. Start with the more traditional choices before considering any of the non-traditional ones.