Thanks to tax subsidies, benefits are often the most economical way to attract and retain talent, but creating a truly competitive and compelling employee benefits package can be a struggle — especially if you own a small company. Legally, you have to offer certain benefits like social security taxes, unemployment insurance, and worker’s compensation, and more, and this can get very expensive, very fast.
Remember, cost-sharing with employees is normal these days and employees expect to pay a portion of insurance costs. Also, there are plenty of low-cost (and even no cost) benefit options. But where to start? Here is a list of the most common employee benefits in 2020:
1. Health Insurance
You can contribute whatever is affordable and appropriate for your business (so long as you don’t run afoul of your carrier obligations and ACA regulations).
If this sounds complicated, your broker can help you sort it out. A great broker will help you benchmark your health coverage, not only against your competitors but also across similar-sized companies in your area competing for the same talent pool.
2. Life Insurance
Life insurance is common, though not as common as health insurance. As per the BLS, 59 percent of civilian companies and 55 percent of private firms offered such policies in March 2019.
Many employers offer life insurance in the amount of the employee’s salary at no charge to the employee, or you can offer to pay for part of the policy.
3. Dental Insurance
Dental insurance is far cheaper than medical for both you and your employees. A common ratio is an 80/20 split between the employer and employee, but you can certainly adjust that to find a better fit for your business.
The most common types of employer-offered retirement accounts are 401(k)s and 403(b)s. Which program you can offer is based upon whether you’re a for-profit or not-for-profit business.
5. Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs)
Flexible spending accounts (FSAs) are similar to health savings accounts (HSAs) in their allowed use, but each account type comes with pros and cons. For example, FSAs are available with nearly any health insurance plan, however, they come with a “use it or lose it” clause.
HSAs, on the other hand, never expire.
6. Paid Vacation and Sick Time
These days, it’s unheard of for a company to not offer at least some paid time off (PTO) in their employee benefits package. Two weeks (10 days) is a common period granted to full-time employees and some companies allow employees to accrue additional PTO if they stay with the company for a good chunk of time (ex: an additional week after 5 years).
7. Paid Holidays
In general, Labor Day and Memorial Day are accepted paid days off, but beyond that, working days are at the discretion of you, the employer. Government employees and teachers typically get lots of paid days off, while private sector companies may work through them.
8. Paid Medical Leave
If your company has 50 or more full-time equivalents, you are required to offer medical leave through the Family Medical Leave Act. This includes maternity leave, time off work for employees to recover from surgery, and time off work to care for ailing family members.
9. Flexible Schedules
It doesn’t cost you any money to let your employees move their hours around to make their lives easier. Plus, happy employees work harder, so if you allow them to work 10-hour days so their week is only four days long, you might just find that they’re more productive.
10. Education Assistance
Companies like Home Depot and Starbucks offer tuition assistance to employees looking to earn a degree. From a tax perspective, there are advantages to doing so, but more importantly, employees that feel as though their company has invested in them are more likely to invest back into a company.