One of the keys to running a highly profitable and successful company is keeping your employees happy. Doing so can increase job satisfaction, lessen absences, reduce turnover rates, improve innovation, and more. If you’re looking for ways to increase productivity, job satisfaction is definitely a challenge worth solving. While it won’t be easy to please all of your employees, the methods for building a competitive employee benefits package described below can create a significant impact on employee job satisfaction at your company.
Benefits Package Item #1: Retirement Plans
A strong retirement portfolio is the foundation of any long-term wealth building endeavor. As such, showing your employees that you have their long-term financial wellbeing in mind, by offering a retirement plan, is a key component in any competitive employee benefits package. For most companies that would mean offering a 401(k) plan, but it’s important to keep in mind that retirement plans are not created equal. When putting a retirement plan in place, you need to consider not only your employee’s financial wellbeing, but the financial wellbeing of your company as well.
For business owners still trying to get their small businesses or startup off the ground, one strategy to consider is the Rollover for Business Startups (ROBS) strategy. With a ROBS strategy, business owners can use their retirement savings, such as their 401(k), to fund the startup of a new business venture, or buy or grow an existing company. It also has tax incentives for employers as well.
Nontraditional Asset Options
While establishing a retirement plan might not be the most unique employee benefits offering, providing employees with access to nontraditional investment options within your company sponsored plan will definitely make your business stand out. A few alternative investment strategies that can be added to a company sponsored plan include private stock, qualified employer securities, joint ventures, real estate, agriculture/maritime rights, and other types of loans and liens. If you’re really looking to differentiate your company’s retirement plan, we encourage you to consider cryptocurrencies like Bitcoin and other forms of digital assets.
The Benefits of a Retirement Plan
While establishing a retirement plan takes some work, here are a few of the specific benefits that you can expect as a result of the effort:
- Tax Advantages: As mentioned above, offering a retirement plan can give your company significant tax breaks. These tax advantages include credit for retirement plan startup costs, credit for contributing to a retirement plan as a participant, reductions in a company’s taxable revenue, tax free earnings associated with ROTH contributions, and more!
- Hiring Benefits: Companies that provide a competitive retirement plan can attract more talent and give themselves a recruitment edge. A retirement plan can also increase employee retention, reducing the need to spend more money to replace hires.
- Compensation Support: Hiring competent people can require a certain level of compensation that may be difficult to provide if your company is just starting out or currently strapped for cash. Fortunately, offering competitive retirement benefits can be used as a bargaining chip when discussing salary with highly skilled job applicants.
Benefits Package Item #2: Health Care Benefits
Retirement benefits are just one side of the coin when it comes to employee benefits. Companies must also consider health care options when developing their employee benefits package. According to the Affordable Care Act, “Employers must offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their children up to the end of the month in which they turn age 26.” Employers that do not comply with this mandate could face various legal and tax penalties.
Specific services may vary based on your state’s requirements. In most cases, a competitive health care plan is designed to include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more. However, employers that are not concerned with gaining a competitive advantage can opt to choose the minimum benefits required, which typically include preventative medical care and vision care for eligible employees and dependents.
Preventative Health Care
You can also look into voluntary benefit options to make your plans more flexible according to the specific needs and preferences of your employees. These options may include, disability insurance, dental insurance, telemedicine coverage, and even gym reimbursements. These customizations will not only lead employees to higher satisfaction levels regarding their benefit program, but it will ultimately increase overall job satisfaction and decrease employee turnover.
Another benefit that you can consider is designing a work-life balance program to reduce stress and improve employees’ mental health. Some of the most popular examples include onsite lifestyle services like gyms and dry cleaning. Several well-known companies offer various work-life balance benefits that not only give them a competitive advantage but also positively improve their public image. For instance, “Starbucks gives employees who work more than 20 hours a week the opportunity to complete a bachelor’s degree with full tuition coverage for every year of college through Arizona State University.”
Alternative working setups can also be explored, such as allowing remote working and flexible shift changes. These types of work accommodations are especially important to employees that support dependents. As Leading Retirement Solutions’ 2019 Retirement Gap Study points out, 20% of women who support dependents mention difficulties in saving for retirement. The reason being that women who support dependents typically need to spend more time away from work and miss out on promotion opportunities, resulting in less money available to contribute to their retirement. Therefore, alternative working setups can lead to both mental health improvements and financial health improvements.
Benefits Package Item #3: Financial Support
Once you have set up your retirement plan to assist with employees’ long-term financial wellbeing and your health care benefits for their mental and physical wellbeing, it’s time to consider the point where these two benefits intersect: Financial Management. According to the American Psychology Association, money is one of the top two topics guaranteed to make Americans feel stressed. So what can employers do, short of giving everyone a raise?
- Financial Management: Employees always appreciate companies that care about their financial welfare on a more personal level. That’s why big corporations usually provide financial management education and tools as part of their benefits package.
- Paying Down Debts: Many employers are starting to consider forms of long-term financial support other than retirement plans. Instead of supporting employees by helping them prepare for future expenses, help them with expenses they have already incurred. Offerings like student loan repayments, paying for the college tuition of employees’ children, and helping with wedding expenses of unmarried employees, are all great additions to a benefits package.
Providing benefits to your employees is a critical part of your business. Not only is it mandated by law, but it also gives your company a distinct advantage from your competitors, especially in attracting quality talent and boosting employee productivity.
For more tips and information regarding retirement plans, contact us.
