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Employee Benefits
28 Sep 2020

Employee Benefits 101: The Basics You Need to Know

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More than 63 percent of job seekers rank the quality of employee benefits as a major deciding factor when applying for a job. If you’re a small business owner looking to attract top-tier talent, the best thing you can do is offer great benefits to your team.

However, if you’re just starting to explore your options, you’re likely feeling a bit overwhelmed by the process.

Figuring out how benefits work and what you’ll need to offer to keep your employees happy doesn’t have to be a challenge. You just need to understand how benefits work and what you need to do to choose the best options. Here’s what you need to know.

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You’re Only Required to Offer Certain Employee Benefits

Believe it or not, you’re not required by law to offer every type of employee benefits you can imagine. Instead, you’re only required to offer specific coverage that’s meant to protect your employees’ health on the job and their wellbeing outside of the office.

These are the types of coverage you’re required to provide for your employees:

  • Workers’ compensation insurance
  • Unemployment insurance
  • Federal family and medical leave
  • Time off for jury duty, voting, and military service

The exact coverage you’ll need for these benefits will vary based on your business’s size, industry, and common workplace hazards. Your business insurance provider will be able to help you find the right amount of coverage for your business so you’ll always be fully protected.

What Are Common Employee Benefits You Can Offer?

You’re free to offer whatever additional benefits you see fit to your employees. However, most businesses prefer to offer what many employees think of as standard benefits packages.

These include basic health insurance, dental and vision insurance options, employer-sponsored retirement plans, and paid time off.

These are the types of benefits most prospective employees expect to receive when they’re working for an employer full-time. If you offer them, you’ll be keeping up with your competition and be able to provide your team with the assistance they need to live a comfortable life.

That said, you’re free to include any other benefits you think will appeal to your employees. This could include gym membership discounts, paid holidays, or even student loan repayment help. It all comes down to what you’re able to afford and what will help you attract the quality talent your business needs.

Shopping Around Is Always in Your Best Interest

If you’re like most business owners, you have a fairly strict budget. While small business loans can help you stay afloat, you don’t want to rely on them to finance every improvement you make.

Unfortunately, employee benefits can get expensive fast. This is especially true if you’re providing them to hundreds of people.

The best thing you can do is shop around for the best insurance providers possible. Contact different providers and get quotes for the types of plans and coverage options they offer. Compare those quotes in detail.

Remember, different providers offer different coverage types and qualities at varying prices. You’ll want to compare similar coverage options when possible. This will help you make sure you find the provider that offers the best policy options at the best prices.

You should also research each provider’s reputation before committing to a benefits plan. Some providers partner with broader networks of service providers. This makes it easier for your employees to use their benefits to the fullest extent possible.

Once you find a provider you like, go ahead and enroll with them. Just make sure to shop around for coverage options every year to make sure you’re getting the best bang for your buck.

The More Comprehensive the Package, the Better

In most cases, employees have to pay at least a portion of the cost of their health insurance premiums. This helps lower the price employers have to pay to offer coverage in the first place. However, many up and coming businesses offer 100 percent paid coverage to employees.

This makes their companies stand out from others in the industry. Further, it makes more employees want to work for them in the first place.

The more comprehensive you can make your benefits packages, the better off you’ll be. If possible, offer to cover as much of the main insurance packages as you can. If your employees have spouses and dependents, they can add them to the insurance plan at their own expense.

You’re Free to Get Creative With Your Offerings

Though most businesses offer the same types of benefits, that doesn’t mean you have to follow suit. You’re free to get as creative with your offerings as you want.

If you want to create a flexible work environment, offer employees the opportunity to work from home during the week. If you want to keep your carbon footprint low, offer bonuses to employees who bike to work or subsidize the cost of a public transportation pass.

These simple perks are affordable but can still get marketed to employees as part of your company’s benefits package.

Benefits Can Encourage Your Employees to Stay

Make no mistake—benefits can either encourage your employees to stay or leave your company in favor of a more comprehensive benefits plan. Use this to your advantage. Let prospective employees know about the types of benefits you offer during the hiring process.

It’s also a good idea to ask your employees for input anytime you roll out a new plan or offer a new benefits category. They’ll let you know if they’ve had any issues with the current providers and can let you know what’s missing from your coverage options so you can adjust as needed.

Finding the Best Employee Benefits Is Doable

Ultimately, the types of employee benefits you decide to offer are a matter of personal preference. Think about your budget and choose the types of packages that will help your employees stay healthy and happy throughout the year.

As your business grows, you can always add more benefits to your plan.

If you’re just starting your business and aren’t quite ready to hire your first employee, don’t panic. There are smart funding options you can use to help you reach your goals.