What Will Employee Benefits Cost Me
While providing benefits is helpful for your business, it costs money. The exact cost varies based on what benefits you choose to provide and how many people you have opting into the plan.
But administering benefits for your team also takes time . Its important to properly budget time for this project. Take into account form distribution, plan selection, fielding questions from employees, and complying with all federal laws and mandates like the Affordable Care Act .
You may find that appointing a person to oversee benefits can help streamline workflow and give employees a point person to whom they can go with questions. But again, there is a cost associated with either hiring a new employee to do this or making it part of a current employees duties.
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Best Practices For Your Employee Benefits Package
When designing your employee benefits package, there are a few things to keep in mind:
- Make sure the benefits you offer are ones that your employees will actually use and appreciate. Theres no point in offering a benefit that no one will take advantage of.
- Consider the needs of your employee base. Offering benefits that meet the needs of your employees will make them more likely to use them.
- Make sure the benefits you offer are affordable for your business. Offering too many expensive benefits can strain your budget and make it difficult to offer other perks or salary increases.
- Be sure to communicate the details of your employee benefits package to your employees. They should know what benefits are available to them and how to take advantage of them.
- Know the law. Make sure youre offering all benefits that are legally required in your state for the size of business you operate.
Why Are Employee Health Benefits Important
Canadians are fortunate to have access to public health care services but those who have accessed these services know that key parts of their health and wellness needs arent covered by government plans.
A significant amount of health care needs are paid for privately. This includes even routine needs like income replacement in case of disability, dental and vision care, prescription drugs, out-of-country coverage and more.
Over the years employers have recognized that offering their employees coverage for these extended health benefits can play a critical role in building a competitive business, and so over $40 billion dollars of employee health benefits are offered through employers in Canada.
Especially if you operate a small business, offering these benefits may seem costly. But there are some advantages to be had from offering an attractive health package to your employees.
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Benefits Both Employers And Employees
Tracking employee hours benefits not only the employersby minimizing time thefts and payroll calculation errorsit also helps employees improve their time management skills, work behavior and overall performance.
Automated time tracking ensures that employees or their managers do not spend hours maintaining and calculating timesheets. This time is better spent on working, planning and communicating with their teams.
If you do not track employee hours, you will need to resort to other measures such as checking in on their progress regularly to ensure that work gets done. This may breed resentment among employees as they feel micromanaged. When you have data to fall back upon, you know which employees need more monitoring and which can be trusted to work independently.
Creating A Healthy Workforce
It should come as no surprise that people tend to work better when they feel better. This is where health benefits in particular can prove useful.
One example can be seen in companies that offer dental insurance. Individuals who are not sure how they will pay for dental services may ignore a minor cavity until it becomes a complicated root canal requiring recovery time. During this time they may have spent many days distracted by pain and likely underperforming as a result a situation which can be prevented with vision and medical insurance. Employees who can address health concerns quickly are more likely to focus at work and need less time off.
Paid sick leave can also help boost the health of the workforce. Advocating for employees to stay home when they are unwell can prevent one sick employee from infecting an entire department. It also gives workers the time they need to heal so they can return to work refreshed and ready to perform at their best instead of struggling to work through their illness for days or weeks.
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Attract The Most Talented Employees
If you want to hire the best employeestalented, motivated workers who can help your company succeedthen a solid employee benefits package is a great place to start.
Thats because, well, everyone else is doing it. Many businesses offer some kind of employee benefits. Even small businesses, in fact. One study found that 50% of businesses with fewer than 50 employees offer health care benefits, and 96% of businesses with over 100 employees do.1
In other words, to be competitive with hiring, you really need employee benefits. Otherwise, youll probably lose the best candidates to businesses that offer a benefits package. Because for many workers, a benefits program can be a deciding factor in choosing where to work. Its an important part of their overall compensation.
But it goes beyond compensation. When your business offers benefits, it shows that you believe in your company, that you have strong enough finances to afford benefits, and that you want to invest in your workforce. Put simply, benefits suggest youve got what it takes to be a great employerwhich in turn attracts great employees.
Oh, and while we used insurance as an example, you might want to consider more comprehensive benefits. Because again, better employee benefits can be the deciding factor for an in-demand job seeker. If you want top-notch workers, you need top-notch benefits.
Sample Compensation And Benefits Package
Each compensation and benefits program will look slightly different. On top of the standard offerings, this should reflect your company culture and core values. Also keep in mind any local laws and the roles each package covers. And consider what you will offer salaried full-time employees compared to part-time or contingent workers.
When putting together a compensation and benefits package, in general, youll want to include the following:
- Health insurance offerings
- Bonuses, commissions, and merit pay
- Reimbursement programs
This list is to get you started, but remember to follow all local and federal laws when creating your compensation and benefits plan. Be sure to include all necessary details as your state, organization, and federal laws require.
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What Are The Top Benefits Employees Want Most
The most sought-after employee benefits are:
Most of these probably dont come as a surprise.
After all, there are baseline employee benefits that most industry experts say are needed to attract talent competitively: healthcare, paid time off, and possibly a retirement savings option. And then there are specialty benefits and workplace perks that help employers even small ones become an Employer of Choice. But, as tempting as it is to keep up with the Googles of the business world, here is a word from the wise:
Do not invest in benefits your employees do not value.
It sounds simple, but we often get wrapped up in the latest benefit or workplace trend. Pause, take a step back, and then ask employees what they value in benefits and compensation. Their answers might surprise you.
Keep The Program Simple
You can achieve different goals through your incentive program. So, make sure to identify what you want to achieve and create tangible and specific goals for your employees to achieve.
Make sure that the goals are achievable and memorable for your employees. Tough goals will discourage employees, while too easy goals can break the budget. Make sure to find a balance between them and implement them.
Over time, you can modify the goals or add new ones. However, always make sure to keep the program simple so that anyone can understand it easily.
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Invest In Your Employer Brand
Offering incredible employee benefits helps to improve the reputation of your brand both internally and externally. Your employees will thank you for it, and youâll position yourself as a more authentic and attractive employer brand from the outside too!
So there you have it, some of the top reasons why employee benefits are important!
To summarise, employee benefits are a great way to attract and retain top talent, boost productivity, motivate your employees, and promote you employer brand. It’s why the most forward-thinking brands are upping their benefits game!
It Can Save The Employee And Employer Money
When you offer and your employees opt for benefits through salary sacrifice or net pay reduction schemes, both your staff and the business can benefit from tax reductions on these purchases. This doesnt just apply to the obvious benefits, such as healthcare and pension plans. It also applies to other employee benefits, for example, personal use of a company car, tuition fees, mobile phones, cafeteria plans or cycle to work schemes.
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Reasons Why Employee Benefits Are Important
by admin | Mar 9, 2022 | Employee Benefits
According to a recent report published by LinkedIn, companies that have high ratings on compensation and benefits have 56 percent lower attrition rates than those with low ratings.
If you want to set your employees and your company up for long-term success and job satisfaction, a great benefits package should be at the top of your priority list.
Are you unconvinced that benefits are important? If so, outlined below are the top 10 reasons why you need to start taking your companys employee benefits seriously.
Healthcare And Dental Benefits
An employee benefit that helps pay for medical expenses is health insurance. Health insurance plans vary in terms of the services covered, the deductibles and copayments required and the premiums charged. Health insurance plans can be offered by employers, health insurance companies or the government.
There are several different types of health insurance plans, including PPOs, HMOs and HDHPs. PPOs allow employees to see any doctor or specialist without a referral. HMOs require employees to select a primary care physician who will coordinate their care. HDHPs have high deductibles but lower premiums.
An employee benefit that helps pay for dental care expenses is dental insurance. Dental insurance usually pays for preventive measures, such as teeth cleanings and X-rays, as well as common procedures such as fillings or a tooth removal. Some dental insurance plans also cover major procedures, such as crowns and bridges.
Employers can offer health insurance and dental insurance as part of a group health plan. A group health plan is an employee benefit plan that is sponsored by an employer and provides health and/or dental coverage to employees and their dependents.
Transgender Healthcare
Transgender-inclusive health benefits are employee benefits that cover medically necessary care for transgender employees. Depending on the provider, this type of coverage may include hormone therapy, mental healthcare and surgical procedures.
Telemedicine/Telehealth
Fertility Benefits
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What Is An Employee Benefits Plan
The portion of an employees compensation package that includes benefits like health insurance, retirement plans, life insurance, paid time off, and educational assistance programs is known as an employee benefits plan. Even though most businesses adhere to the laws requiring benefits like workers compensation, unemployment insurance, and Social Security contributions, extra benefits are frequently optional. Plans for employee benefits list every welfare or pension option that is available to employees. Plans inclusions frequently depend on a companys budget, goals, and employee needs due to the wide variations in benefits plans offered by different employers.
Employee Health Benefits Help Attract And Retain Employees
As an employer, you know you must offer competitive salaries if you want to recruit the best employees. However, employee benefits may be more important than you think. Research has shown that employers who offer a suitable benefits package attract more applicants than those who do not.
In 2016, an American workforce report published by Aflac revealed that 60% of employees said they would accept a job offer with lower salary but better employee benefits. Additionally, 16% of those surveyed said they had resigned from a job or refused a job offer in the 12 months prior to the survey because of unsatisfactory employee benefits.
The study also revealed that 42% of workers said that being offered a more favourable benefits package would encourage them to stay in their jobs. Typically, employee health benefits are the most expected and desired type of benefits. Therefore, it is evident that attractive employee health benefits paired with a competitive salary are beneficial for recruitment and retention.
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Boost Morale Energy And Productivity
If you can help your employees save money on their everyday and bigger purchases and provide them with the opportunity to participate in activities that bring them joy, youll achieve a happier and more engaged workforce.
A benefits package can significantly impact employee morale, as they will feel valued and that their needs are met on multiple levels. This leads to an increase in employee loyalty, productivity, and overall satisfaction with you as their employer. Its worth remembering that happy employees will sing your praises outside of work, too, making it easier to attract the best candidates when you are next recruiting.
Strengthens Relationship With Your Employees
Once employees feel satisfied and happy with the insurance plans you provide them, they can focus more on their work. Therefore, increasing their productivity. Happy and satisfied employees also have better and stronger relationships at work.
Insurance is one of the commonly offered employee benefits that are not talked about. Most employers offer them but dont consider or forget their great importance. Not only with the workers, but to the company as well. Offering good insurance plans goes a long way!
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Employee Benefits Are Vital
Employees arent just cogs in a machine. Theyre human beings and like to be treated as such. This is why employee benefits are so important they show employees that they are appreciated and that their hard work is worthwhile.
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The Importance Of Employee Benefits
Employee benefits are designed to help promote employee satisfaction and well-being. This is usually done through benefits ranging from flexible working hours and child care support right through to dental care and pension schemes. Company perks are an extra incentive provided by employers to attract and retain employees, contributing towards improving well-being and staff engagement across an organisation. However, it wasnt so long ago that extra benefits were used as a retaining measure or a ‘good will gesture’ to persuade and encourage employees to continue their work at that organisation.
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It Improves Employee Engagement
A workplace with good morale, where employees are happy to be at work and to collaborate with their colleagues, is essential to company success. A workplace with high employee engagement is even better.
Employees who are engaged in their work are more focused and motivated and they feel like theres a purpose to what theyre doing. Theyre willing to go the extra mile to get the job done.
This is where employee benefits like flexible schedules, remote work, and on-site childcare come in. Acknowledging a workers individual needs makes them feel appreciated. It also addresses problems that might otherwise lead to tardiness, missed days and distraction at work. Even smaller perks can affect employees, like offering free lunches with healthy and vegetarian options in containers made with recycled materials. Employees are more inspired to work for companies that share their values.
Stand Out From Your Competitors
The advantages of having company benefits can provide an organisation a competitive edge compared to other organisations that do not provide employee benefits. Offering employee benefits within an organisation is important as it shows employees that employers are invested in their overall health and their future well-being.
It is also important for UK businesses to cater to their employees at all stages of their life, regardless of a employees age. Although statistics state that 45% of 55 to 64-year olds are in favour of employee benefits, a massive 73% of 25 to 34 years find employee benefits crucial to their work-life.
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Canadian Pension Plan Contributions
Employees, employers, and self-employed individuals are required to contribute to the Canadian Pension Plan. Employers must contribute by deducting a certain percentage of an employees wage. Certain employees are exempt from this, like employees who make less than $3,500 a year. In return, employees get access to retirement pensions and survivors benefits for widows and children, as well as certain disability benefits.
Survivors benefits include either a one-time payment to the beneficiary or a monthly payment to the beneficiary. The amount an employee receives from their pension after they turn 65 depends on how much they made throughout their working years and how much they worked. To be eligible to receive survivor benefits, you have to have made contributions to the CPP for the lesser of one-third of the calendar years in their contributory period or 10 calendar years.
The amount that employers have to contribute varies from year to year, but to give you an example, in 2021 the employee and employer contribution rate was a 5.45% deduction based on the employees salary. See CPP 2022 Maximum Pensionable Earnings.
Improve Employee Retention Rates
As was mentioned above, employee attrition rates decrease when companies offer generous employee benefits, including robust health insurance coverage. Furthermore, a recent survey showed that 77 percent of respondents would consider leaving a job if they didnt feel the benefits were worth their time and effort.
As the current job climate and the Great Resignation have shown us, employees are less willing than ever to stick with a job if they dont feel theyre being treated fairly.
Millions of people quit their jobs in 2021, and theyve made it clear that they expect more from their employers. If you want to keep your employees around long-term, offering them good health benefits is one of the best things you can do.
Keep in mind, too, that the cost of hiring new employees will almost always end up being higher than the upfront cost of health insurance premiums.
Some employers resist the idea of offering health insurance, or they offer the most minimalistic plan possible, because theyre worried about the expense of health benefits for their employees. If this is the case for you, remember that providing good healthcare now can result in more savings later.
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