Understanding your employee’s needs and choosing the best benefits plan to accommodate them will help your team feel valued and keep your Jedi from joining the dark side. Luckily, you don’t necessarily need a health care plan the size of the Death Star to keep your employees feeling appreciated. Small-to-medium size businesses have a myriad of tools at their disposal to help with ongoing employee recruitment, long-term staff retention, and overall workplace satisfaction. Offering fringe benefits doesn’t have to be a phantom menace that creates cash-flow challenges and bottom line revenue concerns. In his infinite wisdom, small business Yoda has compiled a list of fringe benefits that provide the most bang for your druggat. First, it is important to understand:
What is a fringe benefit?
According to the Internal Revenue Service, a fringe benefit is any benefit or perk provided to an employee by a company that is above and beyond a salary or stated hourly wage. Nonwage compensation adds a great deal of competitive advantage for organizations that choose to offer it. These perks can be provided to all employees or to a select group of workers that have reached certain milestones or exceeded performance expectations. In addition to providing a compelling reason for employees to join or stay with your business, some fringe benefits are also tax-free. As a business owner, some costs associated with these perks are deductible for the business each year they are offered, making fringe benefits more affordable over time. Here are some of the most creative and cost effective fringe benefits your company can offer.
- Flextime – Finding balance between work obligations and life commitments can be a challenge for some employees, especially when hard 9 – 5 schedules are imposed. Offering flextime scheduling is one way to help employees achieve the work/life balance they desire, without any direct cost to your business. In fact, staff members who are able to create their own schedules say that they are less stressed, less likely to experience burn-out and generally more satisfied with the work they do.
- Telecommuting – While not fit for every type of business, telecommuting can be a highly valuable fringe benefit to employees. The ability to work remotely can reduce the stress and time associated with commuting into the office. Telecommuting can be offered to employees in full or in part and can be used as an incentive for meeting sales goals or reaching work anniversary milestones.
- Relaxed dress code – Yes, a lax dress code counts as a fringe benefit. In the appropriate environment, having a relaxed dress code can entice top talent to join and ultimately stay with your company.
- Company sports – If your business is relatively small—less than 100 employees— creating a sports team/event may be a smart fringe benefit to offer. Organizing a Friday afternoon softball or touch football game with staff provides a healthy way to relieve stress, boost morale and create a stronger bond among co-workers.
Minimal cost benefits
- Wellness benefits – Many employers are taking steps to encourage their employees to lead more active, healthy lifestyles. Fringe benefits that fall under this category include a variety of options. Businesses can offer onsite or offsite wellness coaching, other types of education seminars lead by local experts, discounts on gym memberships or fitness clubs or partial reimbursement for exercise equipment. Prices for wellness benefits can often be negotiated with the provider directly, and are often relatively inexpensive.
- Staff socials/meals – Providing on or off-site social events for your employees is another way to provide fringe benefits at little cost. Organizing a monthly happy hour, potluck or ice cream social doesn’t have to break the bank and can include fun, team-building games.
- Miscellaneous discounts/reimbursements – Companies have the ability to negotiate lower prices for their employees on certain items including dry cleaners, day care facilities, car dealerships, amusement parks, warehouse club memberships and vendor or supplier products and services. Securing a discount on items employees use regularly, or offering reimbursement for certain purchases are great options to provide unique, beneficial perks to your staff at a low cost.
- Retirement plan contributions – When it comes to recruiting top talent, retirement plan contributions are big considerations for your potential hires. Matching programs on qualified employer plans such as a 401(k) or SIMPLE IRA not only incentivize employees to save toward their own retirement— they also comprise a substantial portion of total compensation. If your business is cash-strapped, retirement plan contributions may not be the most cost-effective way to go. However company contributions are tax deductible—as are plan
start-up costs for early-stage businesses—making the total expense less than you might imagine.
- Paid time off – The majority of potential hires and current employees expect that their company will provide some degree of paid time off. Vacation days, sick days, personal days, and even volunteer days enhance a worker’s total compensation and promote a work/life balance. This option is not always cost-effective, but it does generate a return on investment by way of more satisfied, less stressed staff.
- Insurance coverage – Fringe benefits may also come by way of insurance coverage for employees, including dental, vision, health care, life, disability and long-term care insurance. Deep discounts are available to employers offering basic life and disability coverage on all employees from most major insurance carriers. For health care, dental and vision insurance, companies can opt to subsidize a portion of the premiums under a cost sharing agreement with employees. A combination of these benefits makes employees feel appreciated and valued, and premiums can be deductible to the business up to certain limits.
While this list of fringe benefits is not exhaustive, it should get you started thinking about potential employer-sponsored perks that fit with your employees’ needs and your businesses’ cash-flow requirements. Unless you’ve created an army of clones, you’ll want to consider the specific preferences of your Jedi. Additionally, it is important to consult a business tax advisor and financial planner to ensure your business is receiving the greatest financial return on your selections. You want to be sure your choices won’t impede company revenue objectives and keep you from fighting the Empire. May the force be with you.