Friday, 28 January 2022

The Importance of Employee Benefits

The measure of a business and its owner’s success is more than how much money a company earns. One often overlooked measurement of success is its ability to have a positive effect on its employees. A good way to look into this is to assess what’s in their employee benefits package.

What Are Employee Benefits?

Creating an impactful and competitive employee benefits package can be quite a challenge. Employee benefits, either tangible or intangible, are non-wage compensations besides the worker’s salary. They are also known as perks or fringe benefits.

These additional benefits are important because they show that the employer cares for their employees in the long term. They can also help retain current workers and attract new ones as they can differentiate the business from the competition. Surely, the company can have the best products in the market, but if it cannot keep its workers happy and satisfied, the entire organization cannot last long.

Commonly Offered Employee Benefits

Depending on the size and type of the company, employee benefits may vary. The benefits are usually discussed with the new staff member during the final interview. So, here are some of the expected benefits that workers can get:

1. Health and Life Insurance – Health insurance is one of the most important things that potential employees look for in a benefits package. Many companies today offer some form of medical insurance to their workers. In a health emergency, the employee will be secure, knowing that they won’t pay too much

Besides health insurance, life insurance is a standard inclusion in the employee benefits plan. Many employers can offer life insurance at no charge or deduction to their employee salary. If the employee suddenly dies, their immediate family will receive support to cover for the funeral and other expenses.

2. Retirement – Retirement benefits can be among the things that can entice new employees. 401(k) is the most common retirement benefit in the US, designed by the US Congress in 1978 to encourage people to start saving for their retirement.

It’s a retirement savings plan that offers some tax advantages. Basically, if the employee signs up for a 401(k), they’ll have a percentage of their salary paid directly into an investment account. The longer the employee contributes, the bigger the investment gets.

There are other types of 401(k) plans available to choose from. There are traditional 401(k), safe harbor 401(k), and SIMPLE 401(k). Each of these plans can offer employees different advantages that can fit their current finances.

3. Vacations and Time Off – In many parts of the world, paid time offs are mandated by law. However, employers in certain countries, such as the United States, are not obliged to offer paid vacation leaves. The companies that do provide them can have a competitive advantage.

Paid leaves become one of the most highly regarded benefits that potential employees look for. Everyone deserves to have a break from time to time. By having paid leaves, employees will get enough rest and will be more focused and motivated to do their job properly.

4. Flexible Working Schedules - There’s no denying that having a balanced work and life situation is important. Several companies today have been adopting a more flexible working schedule due to its benefits.

It’s a cost-effective way to keep your workers happy and motivated to do their jobs. Having a flexible schedule lowers stress and lets them handle their other priorities properly, such as their family obligations. An employee that is allowed to choose their own hours can give their very best every time.

5. Flexible Spending Accounts (FSAs) – Flexible spending accounts are tax-free savings ones. Employees can make contributions to this kind of account for important or emergency medical and dental expenses that aren’t covered by their insurance. These contributed funds are deducted from the employee’s salary and are not subjected to any income and payroll taxes.

More companies now offer FSAs due to the tax savings that the employer and employee get from them. Keep in mind that the money in an FSA must be used at the end of the year. Employers can still offer a grace period through March 15 of the following year.

Keeping employees satisfied with benefits packages can help in making them stay in the company. It gives the business a competitive edge against the competition.

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