Employee Benefits

Nick Staley

Table of Contents

Benefits can dramatically alter your standing with your employees and your ability to recruit top talent. Do you offer top-of-the-line benefits, or are there other perks that you offer in lieu of benefits? How is that affecting your employees?

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What Are Employee Benefits?

Benefits are considered any additional perk of working for your company.  Benefits normally include paid time off, medical insurance and company parties, among other things.

The Importance of Offering Great Benefits to Your Employees

Offering great benefits can be the difference in attracting and retaining top talent. With competitive salaries on the rise, potential employees no longer consider salary alone when deliberating on their next job.

  • Attract top talent. When salaries are similar, it’s important to make sure that your benefit package is also attractive.
  • Create engaged employees. By offering benefits that employees actually care about (see below for a list), you are more likely to drive overall employee engagement up.
  • Take care of your teams. By offering a great comprehensive benefit package to your team, you are taking care of them as you expect them to take care of your customers and clients.

How to Design a Benefits Package That Will Attract and Retain the Best Employees

Companies often stress about how to design a benefits package that is attractive to prospective and current employees. However, the process doesn’t have to be stressful or complicated. If you follow these three simple steps, you can eliminate the stress and worry from your benefit design process.

Step 1: Determine What Your Employees Need

If you don’t know what your employees need, you will never be able to design a complete and attractive benefits package. Start with the basics.  Employees need health insurance, dental insurance, and some sort of paid time off. If you aren’t offering these three basic things, you need to overhaul your benefits immediately.

Step 2: Determine What Your Employees Want

Needs must come before wants, but wants are more important in building an attractive benefit package. Common desires are life insurance, unlimited paid time off, sabbatical leave, tuition reimbursement, and even pet insurance. Don’t assume you know what your employees want. Ask them.

Step 3: Determine Your Overall Budget for Benefits

Now that you know what your employees need and want, it’s up to you to decide what the company can afford to offer. Get a budget in place to ensure that you aren’t breaking the bank by offering some of these benefits. If you still want to offer a benefit that you can’t afford, feel free to do so; just make it 100% employee paid (this is common with pet insurance).

Three Popular Benefit Categories to Consider

Below you will find three categories of benefits that we think are at the top of mind for your current and prospective employees.

Category 1: Time Off

PTO (Paid Time Off) is essential for the mental, emotional, and physical well-being of your employees. Give them time to recharge, and they will give you amazing results.

  • Accrued time off. Accrued time off is still the standard. This is where an employee banks a set amount of time off every pay period.
  • Open PTO. This is still an up-and-coming idea, but it’s quickly gaining credibility amongst employees and leaders. In an open PTO policy, managers essentially trust their employees to get their work completed on time. Employees are free to take as much time off as needed as long as they accomplish their tasks.
  • Unlimited PTO. An unlimited PTO policy generally functions more like an accrued time off policy: managers still approve time-off requests and track it, but it doesn’t accrue, and employees have an “unlimited” amount of time off pending manager approval.

Category 2: Health

Health insurance can be extremely expensive for a quality plan, but it’s one of the most important benefits you can offer to your employees (and you may be required to offer it under the ACA). The most common options include:

  • Traditional health plans. This is the plan we are all most familiar with. You go to the doctor and pay a copay to receive treatment.
  • High-deductible health plan. The biggest difference between a high-deductible health plan and a traditional plan is in the name. With a high deductible plan, you have a higher deductible, but you also get another major perk: an HSA.
  • Health Savings Accounts. An HSA is a savings account that allows users to save money tax-free against medical expenses.You must be enrolled in a high-deductible health plan to be eligible for an HSA. Companies can contribute to an employee’s HSA, and once an HSA hits a certain dollar amount, employees can invest it and essentially treat it like a retirement account.

Category 3: Ancillary Benefits

Ancillary benefits are all of the additional benefits that a company offers. There are too many possibilities to list here, so we have created a list of some of the ones that we feel are most popular.

  • Pet insurance. To some people, their pets are just like their kids.  They want to be sure they are financially able to take care of their pets’ health-care needs.
  • Dental insurance. While this often gets grouped with medical or health benefits, it technically belongs under ancillary benefits. It’s an added perk that most employees expect to receive.
  • Vision insurance. This may also be a non-negotiable benefit for some employees who have major eye issues or have multiple family members who need glasses or contacts.
  • Sabbatical leave. A sabbatical is a period of paid leave granted for study or travel. You often see this as a reward for employees who have been with the company for a certain period of time—usually five years. It is a great show of recognition for the hard work and dedication that they have given the company.

Questions You’ve Asked Us About Employee Benefits

Every situation is different. As we outlined above, there are needs and then there are wants. It’s important to chat with your employees about what’s important to them to actually find out.
It depends. Health insurance will most likely be the biggest expense in terms of benefits, with most competitive companies paying 75-85% of the premium for their employees. Paid time off can also be expensive.
“I often work with teams that are split into office and field, I have seen that most office people are okay with buy-up options with insurances, they have the money to cover premiums for better coverage, while my field teams want the lowest amount of money taken out of their paychecks, they want basic coverage that meets their needs with not too high of a deductible but the idea of little to no premium is key for them vs the office. I usually will survey my groups to see what they are looking forward to with their benefits renewals, this helps me to narrow down the needs and tailor what I can where I can.” – Kelly Loudermilk
“I tend to google the best brokers in town and start by interviewing how they go about treating their clients. I expect a high level of interaction and partnership, not all brokers get involved in the day-to-day that some smaller companies need, so don’t be afraid to ask questions and even ask what their average commission per employee per month is on certain sized companies and plans, this can also give you an idea of how transparent they are with their clients. I have also seen people ask their networks who they like the best, but you will get bias in those as they may not be the same type of company you are when looking for a broker. I have my favorite broker that I tend to take with me for all clients and employers, they have been by far the best in their customer service and answer every question and provide a lot of extra perks for employees, that is just the cherry on top. Find those types of brokers where they will be the trusted partner looking out for the best in your people just as much as you are.” – Kelly Loudermilk “Consider reaching out to HR professionals in your network, specifically in smaller businesses. It’s very often that HR departments of one manage these processes and may have broker recommendations for you! As them about their brokers and get referrals! Some of the best brokers can be found by word of mouth.” – Chris Ruddy
“Ask them straight up what their commission is per employee per month. If they do not tell you, then they are not working for your best interest, some plans have them built-in and cannot be negotiated, others the broker and you can negotiate what their commission is. This gives you an idea of how transparent they are, if they are honest and open, they are more likely to be working in your best interest. Also, ask them what level can they help you with smaller tasks like open enrollment – do they host the meetings for people? Do they do surveys for feedback? Do they offer any perks for HR or employees? What are the benchmarks for the industry you are in? What plans do they go to the most for their clients or do they have an “in” with any providers? Questions like this can help you determine if they are aligned with what you are wanting in a partner.” – Kelly Loudermilk “I like to use my HR professionals network to my advantage, especially if we are in similar industries. I would recommend that you ask individuals from your HR network what sort of commissions their brokers make, like Kelly mentioned, to have a good comparison to yours. If happen to learn that you need to change your broker, reach out to your network and get referrals to their brokers. That way, you can trust them more because your network has worked with them. We found our broker through a network and he has been great for us.” – Chris Ruddy
Nick Staley

Nick is a certified HR professional holding an SPHR and SHRM-CP. Nick has built HR teams from the ground up as well as worked for big corporations. Nick enjoys consulting and training those who are just getting started in HR. When not working, he enjoys spending time with his family.

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