Employee Benefits

Employee benefits are part of an employee's total compensation. Employers are responsible to pay most of the expense with perhaps employees contributing a small portion of premium costs for their own coverage.

What are employee benefits?

An employee benefit plan is designed to protect your employees and their families from potential misfortunes that could occur like sickness, death, disability, or unemployment. A benefit plan provides retirement to employees and their families. A benefit plan also provides a system for leave or time off of work.

A complete benefit plan could include health insurance, disability insurance, life insurance, retirement plan, flexible compensation wages, and leave from work. If very broadly defined, a benefit plan can also include other elements like bonuses or reimbursement of employee educational expense, among many other appropriations.

Why offer your employees benefits?

Employee benefits help attract and hold personnel which would work well for you. Employee benefits help your company keep up with competition. Good morale within your company come from employees having benefits. Employee benefits provide opportunities to advance and be promoted when other employees quit or retire.

Employee benefits within small businesses

The smaller businesses usually can't afford to provide much in the way employee benefits. For many, just meeting social security, workers' compensation, and unemployment insurance payments is tough enough. Providing health insurance for their employees may simply be out of the question. Just as with the base wages, owners are limited by what they can afford.

For any business, health insurance is the premier benefit to have, if you can afford it. Even a basic program will help in attracting and retaining employees.
Owners don't have to carry the entire group health insurance cost on their own. Premium sharing with the employee is the norm today. Combined with higher deductibles and co-payments, you might be able to afford a reasonable group plan for your workers.
Managed care health programs seem to be proving the least expensive approach to take with health care insurance plans.
The benefit of time off is important as well, particularly for working parents who can really use this time to care for their children.
Flexibility in taking off is also important, so consider the no-fault absence approach. Keep in mind that the needs of the business come first.

Retirement, Savings, and Incentive Programs

Businesses with only a few people usually have no employee savings or retirement plans in place; participation would not be large enough warrant the administrative expense.
Opportunities for incentive programs do exist. These programs usually take the form of a holiday bonus or spot cash awards for meeting goals.
Once appropriate goals are selected, it is important to have accurate measures of performance. Employees should also have reasonable control of result.
For the larger firm with over 100 employees, 401(k) plans are becoming the savings and retirement plan of choice. Employees are increasingly expected to save more for their own retirement, with the company helped with matching funds specified percentage of savings.