What Defines an Employee Benefits Package? It’s Up to You.
There are many reasons why an employer might want to offer “benefits” to their employees. Health insurance, dental and vision coverage are tax deductible for your business. They are also increasingly important as the California unemployment rate continues to decline. (The state’s unemployment rate in December 2017 was 4.2 percent, down from 5.2 percent a year earlier.)
Today, the competition is really heating up among businesses when it comes to the recruitment of new employees and retention of existing workers. In fact, according to a recent New York Times article, employers are increasingly taking more time to fill open jobs – and they are actively considering candidates they might have overlooked in the not-too-distant past.
What Do Employees Want?
If you’re investigating the addition of new benefits to your employee benefits package – or you’re considering benefits for the first time – you might be asking “what are the most popular employee benefits?” Should you consider health care, in-house child care, or doggie day care? The choice is yours.
In a study by the Society for Human Resource Management (SHRM) and Colonial Life, the five most popular employee benefits were:
- Health care and personal welfare (health insurance, vision, etc.)
- Preventive health and wellness programs
- Retirement and savings planning
- Leave benefits (paid time off)
- Flexible work schedules (including telecommuting)
Also popular among employees were compensation bonuses, career development (company-paid training), business travel perks (reimbursement of costs while traveling on business), and relocation benefits.
A 2016 SHRM report, Leveraging Benefits to Retain and Recruit Employees, found 73 percent of employees rank health care as the most important benefit. In a separate survey, Benefitfocus found 78 percent of workers base their acceptance or rejection of a job offer in part on the employer’s benefits package.
For the period 2013 through 2017, some benefits increased in popularity, while others saw a decline. The table below summarizes SHRM's 2017 research.
|Benefits on the Rise||Benefits on the Decline|
|Free coffee||Medical Flexible Spending Accounts (FSAs)|
|Meal reimbursement for business travel||Defined contribution plan hardship withdrawals|
|Health Savings Accounts (HSAs)||Service anniversary awards|
|Financial advice||Undergraduate educational assistance|
|Meal flex (flexibility to make up time during the day due to a longer meal break or leave early due to a shorter meal break)||Graduate educational assistance|
|Standing desks||Defined contribution plan loans|
|Employer contributions to HSAs||Shift premiums|
|Sign-on bonus (for executive positions)||Compressed workweek|
|401(k) fund conversion to Roth 401(k)||Auto subsidy for business use of personal vehicle|
|Accelerated death benefit for terminal illness||Long Term Care insurance|
|Wholesale generic drug program for injectable drugs||Credit union membership|
|Sign-on bonus (non-executive positions)||Onsite cafeteria subsidized by employer|
|Shift flexibility||Paid travel expenses for spouse|
What you include in your organization’s benefits program is up to you – and driven, at least in part, by what portion of your budget you can allocate toward your employees’ benefits. Competitive wages are important, but some employees may be willing to work for a lower hourly or annual wage, if you offer a more comprehensive benefits program. That’s exactly what Aflac found in a previous study, in which 16 percent of employees said they have left a job or turned down a job due to the benefits offered.
Determining Your Budget
A health insurance broker can help you determine your employee benefits budget. Then, each of your workers can use your contribution to the plan premium like a gift card to purchase the coverage they like best.
If you choose a private health insurance exchange, like CaliforniaChoice, you can give your employees access to more choices and multiple plans from several different health insurers. CaliforniaChoice includes dozens of coverage options from seven of the state’s leading health plans: Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage. That means your employees can shop and compare plans to find the coverage that best fits their individual or family health insurance needs.
Your company costs are fixed for a year (subject, of course, to any new hires or employee departures). Each of employees receives the same contribution to his or her coverage. (You can’t pay 100 percent for one employee, while paying 30 percent for another.) At renewal, you can adjust your contribution to coverage, up or down, and stay with the CaliforniaChoice program.
If your employee chooses a health plan with a premium that exceeds your contribution, the employee pays the difference. It’s that simple.
Ready to get started?
If you want to boost morale, increase employee retention, and offer more benefit choices to your workers, click below to get a custom quote for your business.