Too many companies assume that just by having a benefits package, they are automatically attracting the best employees. Unfortunately, that is not always true. The types of benefits offered must also be considered, for example, employers should take into consideration the type of talent they want to attract and then the benefits/perks those individuals would consider important. In a lot of cases, the traditional benefits packages may not motivate everyone, a typical example would be millennials who may be motivated by perks such as gym memberships or other wellness programs that can enhance their work-life balance.
Here is a quick guide for employers and human resources managers to help examine their current benefits package and see if it is truly attracting top talent.
Typical Employee Benefits Package
Most traditional employee benefits packages focus on three things: vacation time, health insurance/ life insurance, and retirement plans. While other employers may offer additional benefits, such as eye, dental, and disability insurance, these are often options that employees can purchase on their own to supplement the basic package.
Most employers in the U.S. offer 14-30 days of paid vacation time a year. Additionally, employees are granted a certain amount of sick leave days. Depending on company policy, employees are either required to use their days within the year, or they may save them in and roll them over into the next year.
Full-time, direct-hire employees are entitled to medical benefits through their employer. While this benefit usually covers most medical conditions, it may not cover conditions related to dental, eye, coverage limits, or any deductibles. Additionally, it may not cover lost wages in the event that a medical condition renders an employee unable to work for longer than the allotted sick days or paid vacation days.
Most employers offer their employees a company 401k program to supplement their retirement. These mutual funds come with investment options (that is if the employee wishes to invest in higher or lower risk options).
Other Types of Employee Benefits
When possible, many employers offer their employees the option to add dental and eye coverage to their medical plan. Usually, these plans extend to the whole family. Additionally, some employers offer their employees’ disability insurance or even cancer insurance. Other insurances, such as life insurance, accidental death, and business travel insurance may accompany the direct hire position.
For employees that wish to plan more for their retirement, many companies offer stock options (where employees may become shareholders in the company they work for), profit sharing, or pension plans.
Federally-funded or regulated benefits, such as unemployment, workers compensation, and social security are available to employees that meet the requirements regardless of whatever benefits package exists between them and their employer.
What’s Wrong with the Typical Employee Benefits Package?
The latest generation of employees is the Millennial workforce. In a number of studies, such as Pew Research, Gallup, and EBN, experts note that the traditional employee benefits package overlooks many of the issues plaguing workers today. Here are a few of the benefits that are often neglected from the traditional benefits packages.
Most Employee Benefits Packages Do Not Address Student Loan Crisis
In order to get a college degree that allows employees to secure a decent entry-level job, most college students are forced to take out a significant amount of debt. As such, many take jobs that barely help them make ends meet. To manage this crisis, some employers have begun offering their employees college debt repayment assistance.
Traditional Benefits Rarely Offer Flexible Work Conditions
Millennials are more concerned than previous generations with work-life balance. While this may prove less efficient on the surface – employees requesting more days off or work-from-home days – flexible work conditions often attract the best employees. Not only that, but the more relaxed work conditions often elevate the quality of work.
Employers that take flexible work conditions seriously have begun implementing more digital communication tools and productivity software. As it happens, the latest generation of employees are more than pleased with the added technology at work. It increases productivity and employee engagement at work.
Only a Few Employers Give Their Employees Options
More than ever, employees would rather customize key parts of their benefits. For example, many young employees might prefer a low-cost, high-deductible medical plan with a supplemental Health Savings Account (HSA). In contrast, middle-aged employees may not mind seeing a little less of their paycheck if it means that the quality of their medical coverage increases. Either way, some of the latest developments in human resources software are more than able to help employees customize parts of their benefits package.
Are You Thinking Global and Multinational?
Even if your current workforce is 100% based in the United States, it may not always be in your best interest to restrict your workforce to one country. For example, some labor is cheaper and of better quality in other countries than in the U.S. Additionally, there may come a time when your business is scaling and requires expertise that is only available internationally.
When scaling internationally employers must consider their existing benefits package and if it is relevant to the country they are expanding into. Taking a multinational workforce into account early on can save your business a lot of stress down the road.
Local Compliance and Regulations
When hiring overseas, local regulations may require a minimum quality standard of living that is different from American employment regulations. As such, hiring managers and human resources heads should never assume. Just as hiring across state lines may change compliance requirements with payroll, this is the case more so across the border or overseas.
Eliminating Complexities (Because You’re Losing Money)
When it comes to issuing employee benefits and tracking necessary reductions through payroll, many companies expand their workforce overseas without checking for “complexities.” Within payroll and HR software services, complexities refer to adding new software programs to handle new problems. This ends up creating conflict between different platforms and significantly increasing man hours and subscription costs.
The solution to eliminating these complexities is choosing one payroll and/or HR software program that already possess the capabilities to manage a global workforce. Make sure to ask questions from your software company about its capabilities and choose the right software carefully.
Comparing the Cost of Talent Acquisition Against Increasing Employee Benefits
Employers must weigh in the cost of recruiting, new hire training and losing good employees against the backdrop of their benefits packages. Most companies treat their benefits package as a cost that deserves to be lowered. However, increasing company benefits may end up saving the company money overall, tailored benefits can significantly increase motivation, decrease turnover and increase loyalty among the workforce.
Are you scaling internationally and finding complex employee benefits packages challenging to manage? Talk to us at Payslip today, our clients love the flexibility and control Payslip offers for managing employee benefits packages on a global scale.