Six Ways to Build Better Employee Benefits

Once seen as an added perk, employee benefits now form an integral and expected part of employee compensation packages. In fact, about 26% of surveyed employees reported having left or turned down jobs due to benefits offered,¹ and more than half reported to be at least somewhat likely to accept lower-paying roles with better benefits.²

Put simply, it is critical for companies to offer competitive employee benefits packages.

This article will discuss six ways your company can build a better benefits package, save money, and grow significantly.

1. Implement Retirement 401k Plans

About 74% of surveyed employees reported that saving for retirement is a top priority,³ which means offering a 401k retirement plan should be a top priority for your company.

Based on what your plan allows, employees can save through traditional deferral contributions and/or Roth deferral contributions.

Traditional Deferral Contributions

Traditional deferral contributions provide employees tax-deferred opportunities to save for retirement. Employees do not pay any income tax at the time of deferral. Income taxes will only be paid when the employee retires and requests a cash distribution; their income tax level will align with their individual tax level at the time of distribution.

Roth Deferral Contributions

Roth deferral contributions allow employees to save money after taxes. Employees pay the individual income tax at their current tax rate, rather than paying income tax at their personal tax rate, at the time cash distribution is requested at retirement.

A retirement plan allows your company the opportunity to reward employees for their contributions. If employees ultimately save the company money by being diligent about employee safety, thus lowering workers’ comp claims, or frequently finish jobs before deadline, then consider rewarding them with the savings earned through matching and profit-sharing contributions.

Matching Contributions

Matching contributions is a way to reward employees who defer into the company retirement plan by providing matching allocations. By deferring into the plan, employees show interest in a secure future for themselves and their families.

Conversely, making a matching contribution shows you care about your employees and their financial security. Further, matching contributions are tax-free to employees, which ultimately saves your company money in corporate taxes. It’s a win-win for your company and your employees.

Profit-Sharing Contributions

Profit-sharing contributions lets you reward all eligible employees with a company allocation, even if there is no profit.

This type of contribution can be better than paying a cash bonus out to employees, as cash bonuses require your company and employees to pay any required payroll taxes. With a profit-sharing allocation, there are no payroll taxes. Profit-sharing contributions can also help your company save money on various corporate taxes – another win-win for all.

Ultimately, a 401k retirement plan is a great first step toward building a better benefits package for your employees. It saves both parties money on various payroll and corporate taxes and helps employees create more financially secure futures.

2. Include Major Medical Insurance & Ancillary Benefits

Considering almost half of surveyed employees agree that medical insurance is the most important benefit they can receive from employers,⁴ adding medical and ancillary benefits should be a priority.

These benefits are a great way to improve the health of your employees and their families and demonstrates that your company is willing to invest in their future, which can help attract and retain high performers.

Ancillary benefits include dental, vision, life insurance (term and whole), short-term disability, long-term disability, and accidental death and disability. These benefits can be offered on their own or with major employee medical benefits.