If you’re like most small business owners, you probably know one of the hardest decisions you have to make is what to offer your workers, regarding employee benefits. While being too stingy on benefits can mean losing talented workers, doling out too much for employee benefits can be expensive for your company. Here’s what you need to know about the cost of employee benefits, including some statistics, trends, considerations and warnings.
What’s Usually Included in a Typical Benefits Package?
A typical employee benefit package includes basic benefits, such as life insurance, health care insurance, paid sick and vacation days and pension plan contributions. Retirement and savings benefit costs make up 11.8 percent of the total compensation, while health care insurance benefits are 8 percent and paid leave benefits are 7.5 percent.
Optional benefits are also important for attracting and retaining good employees. These benefits include vacation time and gym memberships. Free food is another optional benefit, such as free snacks, lunches or dinners during shifts for restaurant workers. In addition to being low-cost, free food can do more than just help your employees save money. It can also show them they’re valued. Moreover, consider how gym memberships can be beneficial for employers as well as for employees as it can mean having a fitter and healthier workforce.
New Trends in Health Care Benefits
Rising health care costs continue to be a challenge. In fact, 2019 has been the costliest year ever for employers who offer health care insurance to their employees. To respond to this problem, many employers are finding alternative methods for paying for health care.
For example, it’s expected that there will be more telemedicine options from insurers for helping workers receive medical assistance remotely. This can result in lower medical bills from doctors, besides ease the burden of in-office appointments. Another perk is less exposure of germs to people in waiting rooms who are not sick.
Consider the Age and Life Stage of Your Employees
One major factor to consider when deciding on employee benefits is the age of your employees. Keep in mind that a workforce today can include several generations. Usually, younger generations are focused more on professional development, while older employees are more concerned with long-term care options and retirement savings plans.
Furthermore, consider the stage of life of your employees. Take a survey and determine if most of your workers are married and have dependent children. On the other hand, are most of them single, divorced or empty-nesters? Once you know this information, you can have a better idea about the kind of benefits to offer them.
Other Trends, Considerations and Warnings
- A Bureau of Labor Statistics survey done in late 2018 revealed that the average cost of employee benefits was $11.60 per hour.
- What’s more, the survey stated that the hourly employment cost was $36.63 with $25.03 of this number consisting of salaries or wages. This shows an increase of almost 50 percent in payroll costs.
- Even though providing benefits for employees can be expensive, it can cost you more when you don’t offer much or anything at all. Just think about how this can mean losing talented workers. When you lose key employees, employee turnover is especially costly.
- Today’s employees are looking for more personalized benefits. Hence, offering generic, across-the-board benefits isn’t acceptable.
- To satisfy a more diverse workforce, offer flexible benefits. You could provide a variety of voluntary, inexpensive options, such as pet insurance and pre-paid legal services.
- Since health care benefit costs are continuing to increase, more and more employers are asking their employees to pay more money to offset the cost. This trend is expected to continue, in addition to the trend of reducing specific benefits, such as pensions.
- Health care benefits, retirement benefits and paid leave rank high as an encouragement for keeping employees.
- Some of the trends for employees with families include those, such as paid maternity leave, fertility services and childcare assistance.
Deciding on employee benefits doesn’t have to be difficult when you hand over this job to a highly trained and experienced insurance professional. Please contact us at Insurance Connection USA for a free quote and let us help you set up the best insurance package for your business.