How to Setup An Employee Benefits Program For Your Small Business
Employees play the most important role in your company’s success. A happy and satisfied employee is more likely to do his or her job well, benefiting your business in the long run. The question though is how do you keep your employees motivated and happy working for your company? The answer is pretty straightforward — salary and benefits. Let’s look at some low or no cost ways to add benefits solutions that can help retain top talent at your organization.
Providing your small business employees with benefits on top of a competitive salary or monetary compensation is among the most efficient ways of keeping them motivated and satisfied with working for your business. Unfortunately, many employers see benefits only as “extra” pay that employees receive and additional expense on their end. Employees, however, consider benefits to be part of their total compensation. So if you want to attract top talents in your industry, a strong and dynamic employee benefits program is a must. The good news is, you don’t have to break the bank to provide a comprehensive and competitive benefits plan to your employees. All you need is to plan and make a thoughtful investment to help your small business retain worthy employees.
In this article, we will guide you on how to set up an employee benefits program for your small business so let’s dive in.
Know what employee benefits are required by the law.
There are certain benefits that you are legally required to provide your employees. This means you can be held liable if you failed to provide them to your employees. Those legally required benefits are as follows:
- Social Security and Medicare benefits: All employers, regardless of size or employee headcount, are required to match their employees’ Social Security and Medicare (FICA) contributions. Failing to withhold appropriate taxes can result in steep fines and legal consequences.
- Healthcare Insurance (ACA): Companies composed of 50 or more full-time employees are legally obligated to offer “acceptable” health insurance to their employees who render 30 hours or more work per week. For more details about the ACA tax provisions, visit the Affordable Care Act Tax Provisions page.
- Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) Benefits: This legal requirement covers employers or businesses with 20 or more employees. This gives employees insurance coverage at the company’s group rate for a maximum of 18 months.
- Workers’ Compensation Insurance: Regardless of size or employee headcount, businesses are required to provide their employees protection in case they get injured while in the workplace or while performing their work.
- Unemployment Insurance: All businesses are required to pay into the state’s unemployment insurance fund. These funds are used to provide compensation to unemployed workers when they are moving from one job to another.
- Family Medical Leave (FMLA) Benefits: This federal labor law entitles eligible employees of privately-owned companies to take unpaid, job-protected leave due to family or medical reasons. Eligible employees must have continued group health insurance coverage under the same terms and conditions as if the employee had not taken the leave of absence.
- Disability Leave Through the Americans with Disabilities Act (ADA): This act requires companies to consider and arrange reasonable accommodations for employees with disabilities.
Create a budget for your employee benefits program.
The first step to ensuring a win-win employee benefits program is to create a budget. This will help you identify how much your business can afford. Some of the least expensive fringe benefits are one-time items like a company shirt or a regular employee team building or a party. The most expensive benefits but most valued by employees are health-related benefits like medical insurance.
If your business needs help creating and implementing employee benefits, Professional Employer Organizations (PEO) can help.
PEO is an external organization that manages HR, payroll, and employee benefits for companies. It can help budget, manage, and even administer benefits on your behalf. With the help of PEOs, your small business can offer benefits that big companies offer such as medical and life insurance at a significantly lower cost. PEO can also ensure that your business remains in compliance with tax, states, and federal laws, like workers’ compensation and overtime.
Plan your company’s “total compensation”.
It’s very important that you disclose all of the many aspects of compensation or the company’s benefits package to job candidates and employees. When we say total compensation it should cover all of the aspects of how the employee is remunerated which isn’t only about their paychecks and required benefits.
Total compensation may include the following depending on your company’s capacity:
- Paid leave or time off (includes holiday, vacation, and sick leaves)
- Retirement savings options
- Flexible (FSA) or Health (HSA) Savings Accounts
- Profit-sharing distributions
- Insurances such as medical, dental, disability, and/or life
- Educational assistance
- Child Care assistance
- Public transit credits or reimbursements
- IT reimbursements (if employees work from home and use their home wifi, cellphone, personal computer, etc., then those costs can be reimbursed)
- Employee assistance programs (EAP) to provide employees with financial and legal advice, counseling, retirement planning coaching, etc for free.
- Gym or club memberships
- Flexible or remote work options
Conduct employee surveys for benefits ideas.
Asking the target beneficiaries, which are of course your employees is the easiest and fastest way to get a clear idea of what your employees value when it comes to benefits. Your HR team may conduct in-house surveys or you may also opt to use a third-party surveyor to conduct the survey for your organization.
Pick the best and most cost-efficient fringe benefits.
Now that you have a better understanding of what benefits matter most to your employees, it’s time to select the most cost-efficient benefit plan that your company can afford. Some of the most common employee benefits are as follows:
- Health insurance (may include dental or vision insurance)
- Life and disability insurance
- Retirement plans
- Paid time off
- Paid holidays
- Travel reimbursements
- Work-life balance (i.e. flex time or remote work)
Discuss the benefits plan to all employees and candidates.
Now that you have picked the best employee benefits package, the last step is to communicate the details to your employees. To help them better understand the conditions of the benefits, it’s important that you communicate what has been developed, how it was developed, and why these benefits are developed. You can do this via personal or online meetings, handouts, social media, etc.
So that’s it. We hope that with the above steps, we made it more convenient for you to set up your company’s employee benefits. Good luck!