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Posted by: Altura Benefits in Insurance
Employers devote substantial resources to employee benefits. They are both expensive and labor intensive. So, if you’ve never offered benefits to your employees before, you may be wondering if it’s worth it.
Going without employee benefits is certainly a simpler path, but it may not be the best path if you intend to scale and grow your business. Here are four key reasons that employers choose to offer employee benefits.
Many benefits are offered voluntarily, but some are required by law.
For example, the Affordable Care Act (ACA) creates requirements for applicable large employers, which are employers with 50 or more full-time or full-time equivalent employees. Applicable large employers must offer health insurance to full-time employees, and the insurance must be affordable and provide minimum value, as defined by law. Employers that fail to meet this requirement may be required to pay a shared responsibility payment.
Federal law also creates requirements for COBRA continuation health insurance coverage and family and medical leave. Some states have additional benefit requirements regarding disability insurance, sick leave, family leave, continuation health insurance coverage and retirement benefits. New state legislation may require additional benefits in the future, and employers operating in multiple states must keep up with multiple sets of requirements.
Even when employee benefits are not required by law, many employers find that offering benefits is a worthwhile use of resources because doing so helps with talent acquisition and retention. This is true for large employers, but it’s also important for small businesses.
Even when unemployment rates are high, competing for the most talented workers can be difficult. Workers have many options, and you need to give them a reason to pick your company. If you’re a small business, standing out may be especially difficult.
According to a survey from CareerBuilder, 15% of employees cited low compensation or a lack of benefits as one of the top reasons for leaving their last job. Aside from salary, 75% of employees say benefits are the most important factor when considering a job.
Salary is important, but salary alone might not be enough to gain an edge in the talent war. The right benefits can help employers stand out.
You might be wondering why you shouldn’t simply pay employees a larger salary instead of offering employee benefits. This way, employees can buy whatever benefits they want on their own and the employer doesn’t have to deal with it. For example, if an employer spends $10.72 per hour per employee on benefits – the average in September 2020 – why not cut the benefits and give employees a raise of $10.72 an hour?
This sounds simple, but it is not necessarily the most cost-effective strategy.
First of all, employee benefits can come with some tax advantages. For example, employee benefits are typically tax deductible. Compensation provided through employee benefits may be exempt from Social Security and Medicare taxes, depending on the type of benefit. When reviewed from a tax perspective, offering benefits instead of increasing salary can make financial sense.
Group benefits can also help your entire team get more for their money, with easier underwriting requirements. It often costs more to secure benefits on your own that it does to pay for benefits provided by a group health plan.
And there’s another reason offering benefits can be cost-effective for employers – some benefits don’t cost employers anything at all. Employers can offer many popular insurance products, including life insurance and disability insurance, as voluntary benefits. Employees may be responsible for 100% of the cost, but the employees still benefit from low group rates, guaranteed coverage, and payroll deduction for easy premium payment. This makes voluntary benefits a great option for employers that are trying to keep costs down but need a way to attract workers.
Many employees are stressed and unhealthy. They’re not sleeping well. They’re worried about finances. They have health issues that will only get worse if not treated.
Often, work is a major source of stress. According to the American Institute of Stress, 65% of workers say workplace stress has caused difficulties. More than 10% say workplace stress has had major effects.
Some employers might see stress as normal, but in reality, stress can be a serious problem. The American Institute of Stress says that 34% of workers reported trouble sleeping, 12% have called in sick because of job stress, 14% say workplace rage has led to damaged equipment, and 2% admit they’ve struck someone.
People may try to separate their work and personal lives, but the two tend to bleed into each other despite our best efforts. When workers are stressed or unhealthy, they may be too tired or distracted to concentrate on work. They may also miss days due to their problems, and in some cases, they may have to quit completely.
But just as the workplace often contributes to stress, the workplace can also help. Employee benefits can provide health insurance and wellness programs that empower workers to take control of their health. Financial and insurance products can reduce stress associated with financial problems and uncertainty. The right employee benefits can also help workers achieve a better work-life balance. In short, benefits can keep employees happy – and that will keep employers happy.
Your company needs workers who are engaged, focused, loyal and motivated. Employee benefits can help you achieve these goals.
Wondering what to include in your benefits package? Health insurance is often the foundation of a good benefits package, but companies should think beyond basic health plans.
In addition to health insurance, employees should consider offering dental and vision insurance coverage. Long-term care insurance, disability insurance and life insurance are also popular options. Check out this list of the most desired benefits of 2021 for additional ideas.
Are you thinking about introducing a new employee benefits package for your team? We can guide you through every step of the process and help you design a plan that works for your budget. Contact us to learn more or check out our Google Reviews to see why clients give Altura Benefits a 5-star rating.
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