Autumn is a time of change - the leaves turn colors, kids head back to school and many employers begin open enrollment for employee benefits packages. These programs are not only necessary for large companies, they can also make businesses more attractive to top talent. A great benefits package will improve employee satisfaction, as well. For these reasons, employers should develop the best offerings possible. Companies large and small often need to balance health care benefits against the bottom line - but outsourcing benefits administration can open up access to a suite of attractive options. Read on to find out how outsourcing can assist businesses in a competitive marketplace:
Federally mandated employee benefits
At the top of any business's list of benefit priorities should be those mandated by the federal government. According to the U.S. Small Business Association, benefits required by law include Social Security taxes, unemployment insurance, workers compensation, and leave benefits as described under the Family and Medical Leave Act. Some states also require disability insurance for non-work related injuries and illnesses.
- Social Security: According to the Social Security Administration, these taxes are used to provide compensation to workers who have already retired, those with disabilities and survivors of workers who have died.
- Unemployment insurance: Eligibility and other requirements for unemployment insurance vary by state. This insurance is meant to provide assistance to those who are unemployed through no fault of their own, according to the U.S. Department of Labor.
- Worker's compensation: This insurance mitigates risk for employers and provides employees with benefits should they be injured while on the job.
- Leave benefits: Under the Family and Medical Leave Act, employees are entitled to 12 weeks of job-protected leave for the birth of a child, caring for an ill or injured family member or care for the employee's own health. All other leave benefits are optional on part of the employer. Though note that some states also require sick days.
Anything not listed above is considered an optional benefit. However, depending on the industry, there are many other standards that might apply. And in many cases, not providing additional benefits, such as health insurance, will cause potential job candidates to steer clear. Optional benefits can serve as both a recruitment tool and as a way to keep valuable employees at the company. Examples of optional benefits include health insurance, retirement packages, paid vacation and paid sick leave.
Why businesses should consider outsourcing employee benefits administration
Often, providing employees with best-in-class benefits isn't an option simply because there isn't room in the budget. Small employers often face this hurdle as they expand. For instance, a growing company might want to attract new talent, but might not yet have the resources to provide its employees with more than the federally mandated benefits. This is when working with a Professional Employer Organization (PEO) can really help. Partnering with a PEO gives companies access to improved benefits that might otherwise be out of reach. A PEO such as AlphaStaff can offer flexible benefits packages, so each partnered business can find a unique fit.
"A PEO can often get better group rates on insurance."
For example, small businesses that, on their own, wouldn't be able to afford premium benefits, can gain access to Fortune 500-style packages when working with AlphaStaff. That includes medical, dental, vision and supplemental insurance and tax-advantaged accounts. When looking for talented recruits, these kind of benefits aren't optional.
What's in a world-class benefits package?
Employers can look at employee benefits in two ways, as a drain on company resources or an investment in the future of the business. When considered in the second way, it makes sense that competitive companies would want to provide the best benefits packages possible. World-class benefits can attract world-class talent and keep exceptional employees at the company. After all, hiring is itself an investment. The employees who make up the company will shape the products and services it produces, driving growth.
Here's what companies need when building attractive, world-class employee benefits packages:
- Health, dental, vision and supplemental insurance: Job candidates will be more likely to seek out employers who can give them peace of mind when it comes to personal well-being. Offering the full suite of insurance plans means that employees can rest easy knowing that their entire family is covered in case of injury or illness.
- 401(k) employer match: Retirement benefits such as contributions to an employee sponsored 401(k) are another way to attract and keep employees. Simply offering the option isn't always enough, however. Top companies offer a match on a certain percentage of employee contributions. Forbes Magazine noted that many companies match 50 percent of the first six percent of salary. However some companies to offer dollar-for-dollar matches.
- Paid vacation and sick leave: While no private businesses are federally required to provide paid vacation and sick days, few neglect these important benefits. The more vacation days an employer can offer, the more attractive they are to potential hires. For example, airplane manufacturer Boeing gives its employees 12 paid holidays plus a winter recess, according to Business Insider.
- Disability insurance: California, Hawaii, New Jersey, New York, Puerto Rico and Rhode Island are the only states that require disability insurance. Offering this service in another state could make companies seem more appealing.
Aside from those benefits listed here, many companies look to provide unique opportunities to boost morale and attract talent. Working with a PEO means that companies not only have best-in-class insurance programs, they'll also have more resources for outside-the-box activities and perks.