In today’s competitive job market, employers need to be attractive to employees, just as potential hires must appeal to employers. Financial compensation is an important part of attracting great talent. However, more and more business owners are attracting job candidates by offering comprehensive benefits as well. This form of compensation can be extraordinarily valuable, because employers are able to offer group benefits that aren't directly accessible to individuals.
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Why Offer An Employee Benefits Over Cash?
Cash is often a new company's most precious resource. Improving cash flow can mean the difference between success and failure. Offering benefits like 401(k) and pre-tax commuter products can incur little cost to the company while reducing an employee's tax bill significantly. Group insurance like health, dental, vision and life can be more expensive, but employees can share the cost of the policies.
Keep Your Team Healthy
Beyond serving as a form of compensation, group insurance helps keep your employees and their families healthy. Healthy employees are more productive and less distracted. Many companies even set up incentive programs such as gym reimbursements or gift cards for achieving certain health/fitness milestones.
As you compare insurance providers, be aware that there are health insurance plans which cover only your employee, and there are others which cover the employee's entire family. Additionally, consider the ages of your existing employees. A team of employees in their mid-twenties or mid-thirties will have different needs than a group that's on the verge of retiring.
Help Them on Their Journey
Another great benefit to offer is pre-tax transit assistance. These benefits can come in the form of public transit assistance, or parking passes for employees who have vehicles. The best part about this option is the fact that it helps your employees in getting to work, it saves them money, and is a fairly low cost benefit to provide.
Get Your Employees Invested in the Company
If your business is a corporation, you can offer employees incentive stock options (ISOs). These stock options have favorable tax treatment and help align your employees' interests with what's best for the business. Tech companies are best known for stock options, but many businesses are able to share ownership with employees.
Savings for the Long Term with 401(k)
A 401(k) is a tax-favored account designed to help employees save for retirement. In many instances, the employer will contribute funds into the account as well. Some employers match 50 cents to a dollar, while some match the employees contribution penny for penny. Many companies offer tiered contribution, where they will match an employees contribution to their 401k at a certain percentage, up to a certain amount. For example, a company may match the employee contribution 100% up to 3% of the person's salary, and then 50% for the next 3%. Even if you decide not to contribute to your employees 401(k), it's a great benefit to offer your employees, to empower them to invest in their futures.
It can be difficult to keep track of all the available benefits that will make your company a coveted place to work. Fortunately, we're here for you, not only helping you with payroll and compliance, but hooking you and your team up with any of the above-mentioned benefits, all from the Justworks dashboard. Succeeding in business is all about building the right team, and a competitive benefits package can help you attract just that.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.