Offering Employee Benefits? Here’s How to Afford Them

In order to attract top talent and maintain happiness amongst employees, a company needs to have an excellent benefits program. Top-tier tech companies, such as Google and Facebook, offer perks like meals cooked by professional chefs and in-building day care. But you don’t need to be a major Fortune 500 company to take care of your employees and offer supportive benefits. Here are some basic — and creative — employee benefits, and tips on how to afford them.

[Read: 3 Things You Need to Know About Employee Benefits in 2019]

Basics of employee benefits

As an employer, the law requires certain benefits to be provided to every employee. According to Entrepreneur, they are as follows:

• Time off to vote, serve on a jury and perform military service.
• Comply with worker’s compensation requirements.
• Withhold Federal Insurance Contributions Act (FICA) taxes from employee’s paychecks and pay your own FICA taxes, which provides your employees with retirement and disability benefits.
• Pay state and federal unemployment taxes.
• Comply with the Federal Family and Medical Leave (FMLA).
• Contribute to state short-term disability programs (in states where the programs exist).

Many companies also offer the following benefits, though they are not legally required to:

• Retirement plans.
• Health insurance.
• Dental and vision insurance.
• Life insurance plans.
• Paid vacation, holidays and sick leave.

[Read: Employee Benefits 101: What to Offer and How to Decide]

7 inexpensive ways to afford employee benefits

From afar, it can seem intimidating and expensive to provide benefits for all your employees. However, there are many ways to help manage the costs to ensure everyone is provided for.

• Setting a budget. By starting with a set amount of money, you know what benefits are within reason and how much you have to work with. As your business grows, you can increase your budget and offer more.
• Splitting the cost with employees. Look at benefits where your employees pitch in to see how much more added benefits they get. It may be worth it to them to pay a little to gain more.
• Outsource HR to PEOs. By outsourcing human resources to a professional employer organization (PEO), your company gains experienced HR and the ability to reduce the cost of your employee benefits. A PEO will group all of the different businesses it serves into a “buying pool” and negotiate rates with insurance providers. This allows smaller businesses to negotiate larger business rates despite their size.
• Choose higher deductible plans. With a high deductible plan, you’ll choose to pay a large deductible up front and insurance will come in with 100% coverage. The average deductible is $5000. This plan is good for those who cannot afford health insurance.
• Offer non-financial benefits. Not every benefit needs to cost an extraneous amount of money. Offering benefits like unlimited paid time off, having a pet friendly office and allowing employees to work remotely show that you trust your workers and care about their work-life balance.
• Professional development. By offering development conferences and classes, your employees will feel invested in the business. It doesn’t cost much to pay for these programs, and they’ll want to continue to grow within your organization.
• Well-being benefits and discounts. Providing discounts to local businesses and gyms encourages your employees to be more active and proves to them you care about more than just their work output.

[Read: Tailor-Made Benefits: Keeping Employees Happy Means Customizing Benefits]

Not every benefit you can offer to your employees has to be a financial or health benefit. Employees want to feel like their job is more than a nine-to-five. Investing in a person’s well-being and ambitions says that you believe in them as a part of the future of the company. Being flexible with your employees tells them that you trust them to get the work done efficiently and correctly. The biggest benefit of working at a company is feeling like you belong.

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