Are Americans Financially Prepared for an Unexpected Absence from Work?
However, with so many benefits options available, it can be overwhelming for organizations looking to make smart choices for their employees. Below, we’ll cover the fundamentals of employee benefits offerings.
Types of Employee Benefits
When you start exploring benefits options for your employees, you’ll find that there are many different ways to structure your offering. Below are some of the most common benefit types organizations implement for their workforce:
- Health Insurance – One of the most common and highest-value benefits you can offer to employees is health insurance coverage. These types of benefits can range significantly in terms of coverage. Many employees will typically offer plans provided by HMOs (Health Maintenance Organizations) or PPOs (Preferred Provider Organizations). These arrangements help to reduce out-of-pocket expenses when receiving medical services.
- Retirement Savings Plans – Long-term retirement savings plans like 401(k)s allow employees to contribute toward their retirement savings using pre-tax income. Many employers will also offer to match employee contributions by a certain percentage, helping support and incentivize employees to save for their future.
- Dental and Vision Insurance – Ancillary benefits like dental and vision insurance can help to promote the overall health and well-being of employees. These insurance types cover a wide range of preventative care services, such as covered cleanings or examples or helping to absorb some of the costs for more extensive procedures.
- Disability Insurance – Offering disability insurance to employees helps to establish an important financial safety net for staff members who may be unable to work due to an illness or injury. It essentially becomes an income replacement which can be extremely valuable for employees and their families when having to navigate difficult times.
- Family and Medical Leave – Depending on which state your business operates in, there may be various requirements for the type and amount of paid leave that employees need to be afforded. Either way, a great way to show support for an employee’s needs outside of work is by offering a generous amount of paid or unpaid time off to be given to employees as needed throughout the year.
- Paid Time Off (PTO) – The PTO you provide to employees can consist of vacation days, sick leave, or statutory holidays. PTO is critical for keeping a workforce refreshed and productive throughout the year. While most businesses have a set amount of PTO allotted to employees each year, more organizations are exploring unlimited time off. While this may seem counterproductive to some, some studies show that employees with uncapped vacation days are much more productive throughout the year and take less time off work.
The Strategic Value of Employee Benefits
For all businesses today, attracting and, most importantly, “keeping” new employees requires a well-structured and generous compensation package. However, by taking the time to create a good-looking benefits offering, organizations can benefit from:
Improved Talent Acquisition and Retention
When you have a comprehensive employee benefits package as part of a new hire’s total compensation structure, it can be a powerful motivator for encouraging more applicants and enticing individuals to stay longer at the organization.
Considering the heavy costs associated with hiring new employees, investments in a benefits package that improves retention rates can start to pay for themselves over time.
Increased Productivity and Engagement
An employee’s physical and mental health is often tied to the amount of financial support an employee can count on when getting necessary medical checkups and health services. When offering a generous amount of benefits coverage in these areas, businesses directly contribute to the welfare of all their employees.
This can lead to reduced absenteeism due to needing to take additional sick days and lead to more productivity and engagement from a happier and healthier workforce.
Positive Company Culture and Brand
When you create an attractive benefits package for your employees, it says a lot about where your priorities are as an employer. It helps to make employees feel more valued and supported in everything they do. This helps to create a much more positive company culture and can help your brand as a whole leave a great impression on others.
Designing an Effective Benefits Package
Although you may want to offer as many employee benefits as possible, the reality is that affordability has to come into play. It’s important to evaluate the potential return on investment (ROI) on any benefits initiatives you put in place. This not only ensures you’re able to sustain the offerings you have in place for the workforce but also that employees continue to view their options as valuable.
Not all benefit types may have the same level of interest to all employees. Because of this, finding solutions that offer a certain amount of choice and flexibility for employees is a great strategy. It helps to make sure employees feel supported regardless of where they are in life – single, married, have a family – and makes a much bigger impact on their overall happiness in their role.
Create an Optimal Benefits Offering for Your Business
Attracting top talent and keeping your team happy involves more than just providing them with a paycheck. Benefits mean a great deal to many employees, and taking the time to offer these valuable additions to their total compensation package can significantly impact your ability to hire and retain top talent.
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