In a competitive hiring climate, honing your benefits strategy can attract vital new talent—and help keep them on board.
By Katheigh Degen and Raleigh Lang
You’ve launched your business and are now ready to start building your staff, or perhaps your business has taken off and it’s time to start hiring in chunks. In either case, before you start interviewing, you may want to think about employee benefits.
Often, the first perk offered by fledgling businesses is health insurance, followed by some kind of retirement plan. As companies grow, however, a sweetened benefits package can be a particularly effective way of keeping people happy with their jobs and loyal to the company.
Many of the most valued perks are relatively inexpensive for employers. Moreover, companies are allowed to create small classes of employees that qualify for enhanced benefits. That means a group of highly-valued executives might, for example, get improved life insurance coverage or an upgraded disability policy. Such offerings—while extremely meaningful to the employee—are both tax deductible and significantly less expensive than an increase in pay.
At the executive level, special benefits packages can be an important way to attract and retain key employees. Aimed at the highly-compensated employee, these ar-rangements can involve some kind of executive bonus or deferred compensation, often funded with permanent life insurance.
Employers need to make sure they not only put together a good package, but also communicate the value to employees.
In today’s highly competitive marketplace, it’s becoming increasingly difficult for business owners to attract and retain top talent. Salary is no longer the sole compensation driver. Employees are also looking at an employer’s overall benefits package and its potential to help
address their real concerns of financially protecting their families in addition to adequately planning for retirement.
You probably already have a standard benefits package in place, one that includes medical and dental coverage, disability income insurance, and a retirement plan. However, your competitors more than likely offer a similar benefits package. These days, employees are looking for benefit plans above and beyond the standard packages that most employers already offer. These benefits often provide the primary incentive for key employees to join and remain loyal to your company.
Consider a few of the following options for your employee benefits program.
Annuities. Establishing individual retirement arrangements funded by annuities is easy for a small business. Offering this type of benefit may help you retain and motivate your company’s employees.
Disability Income Insurance. Provide employees with income protection that supplements your company’s group long term disability plan in the event of a disability.
Executive Group Life Insurance.Gain a competitive edge by providing valuable life insurance benefits to your executives and senior professionals.
Long-Term Care Insurance. Help retain your employees and enhance your company’s benefits while taking advantage of tax savings.
Retirement Plans. Offering your employees a retirement plan is a way to help them save for the future and is a great incentive as part of an employee benefits package. But it also sends a message to them that says you care about their financial well-being for the long-term, not just while they’re working for you.
Designing an attractive employee benefits package may seem expensive, but the tax considerations can help offset the overall cost. And the impact of a well-designed and robust plan on current and prospective employees could be rewarding.
If you’re thinking about strategies to ensure the long-term prosperity of your business, you’d do well to consider implementing an attractive benefits package or upgrading yours for the employees who are most valuable to that success.
The information provided in this commentary is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Katheigh Degen and Raleigh Lang are registered representatives of and offer securities, investment advisory, and financial planning services through MML Investors Services, LLC. Member SIPC. Twin Financial, Inc,. is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. CRN201902-208478