In the area of employee compensation, it’s a given that money is a good thing. Everyone likes money. But believe it or not, there are times when money alone isn’t enough to be the deciding factor for bringing in good talent. And make no mistake about it; talented, experienced employees know that they’re desired, so you need to sweeten the pot and stand out from the crowd of employer suitors.
That sweetening comes from a good benefits package. The right benefits could lure that talent your startup or small business dearly needs. Here’s a breakdown of some benefits that could be a difference maker.
Health insurance is one of those benefits that everyone appreciates; right up there with money!
The Mandatory Benefits
Let’s get these out of the way first. These are the benefits that are required by law:
- Withhold FICA taxes and pay your share of them as well
- Comply with workman’s comp requirements
- Give employees time off for jury duty, voting, and military service
- Pay state and federal unemployment taxes
- Comply with FMLA (Family Medical Leave Act)
- Contribute to short-term disability programs in the states where these programs exist
After that, whatever benefits offered are done at the discretion of the hiring company. Let’s take a look at some of the more popular ones.
The Voluntary Benefits
- Working From Home. An especially good perk for a company that has limited space, it lets the employee bypass the annoyance and expense of a daily commute. A lot of people enjoy having this kind of choice, especially if they have kids.
- Life Insurance. A lot of companies offer a free life insurance plan that pays out the employee’s salary or a multiple of it to designated beneficiaries, with the option of purchasing extra coverage. Of course, if you have a startup filled with young hip people, then life insurance is probably the last thing on their minds and is not going to be as impressive a benefit.
- Paid Holidays. Always a fun and welcome perk, the usual offerings are New Year’s Day, Memorial Day, July Fourth, Labor Day, Thanksgiving (and the day after, very often), and Christmas Day. Some companies throw in a few more holidays (e.g. Veterans’ Day, Presidents’ Day) or at the very least a couple of paid personal days, or floating holidays. And speaking of paid days off …
- Vacation. Full-time employees expect one or two weeks’ time off, with additional time added on the longer they remain with the company. But here’s a word of warning: if you have a startup company, it usually requires that everyone puts in long hours and puts off taking any significant time off. Luring employees in with promises of several weeks’ vacation time, then guilting them into not taking it because “we’re all hands on deck here before our crucial launch date” is not a good way to foster happy, loyal workers.
- Signing Bonuses. What’s better than money? More money, obviously! Some companies offer a signing bonus, while others do a multi-part payment system where they give part of the bonus upon starting, and the other half after six months to a year later, contingent on good performance.
- Retirement Plans. Whether it’s an IRA, Keogh, 401K, or whatever else, retirement plans are good to have, but again, like life insurance, if your target employee pool is made up of young, eager twentysomethings barely out of college, probably the last thing on their minds is retirement.
- Health Benefits. We’re saving the biggest for last. Anyone within screaming range of a television or computer knows how hot of a topic health insurance has been for about half a decade now. And let’s face it, medical expenses are nasty. Choosing a health insurance plan is a very important part of putting together a good benefits package.
The good and bad news about health plans is that there are so many of them out there, and so many different choices available. Among the things you need to take into account are:
- Is there a deductible and/or co-pay and if so, how much?
- Does the health plan also have dental and vision coverage?
- Is the plan accepted by the majority of health care providers in your area?
- Are things like prescriptions and preventative care covered?
A good health care package could be that one tipping point item that brings that coveted hot prospect into your fold.
Overall, the right benefits package is just one way that you can improve your small business. But good benefits bring in good people, and that’s a big part of the battle right there.