Benefits attract employees

When I think of the benefits of a job, the first is pay. A steady income may be the most enticing benefit to workers everywhere. It’s the only reason high school students want a job. But a U.S. employer has many optional, and some mandatory, benefits beyond pay. While the employer may feel these benefits are expensive - and a few are demonstrably so - a wise employer will view benefits as a means to attract and quality employees and strengthen their business.

One such benefit is health insurance. After pay, health care is the most expensive benefit to an employer but, since the enactment of the Patient Protection and Affordable Care Act (PPACA), even businesses who forgo this benefit must pay an opt-out fee. Health care encourages employees to seek medical attention early, before conditions require lengthy sick leave. Employees with family are enabled to continue work while their spouse or children are sick because they can afford a doctor’s visit. And many capable employees with chronic conditions will be unable to take a job without ongoing health support.

Another is retirement assistance. The typical package is a 401(k) plan that’s automatically deducted from an employee’s paycheck and is matched to a certain percentage by the employer. While this benefit holds less short-term advantage to a business, a 401(k) plan has become such a staple that only a small company could forgo this relatively inexpensive benefit without raising questions.

Yet another is paid time off (PTO). The variations on time off with pay are numerous; some have conditions like sick leave, others are mandatory like a holiday. Research shows that employees who take time away from work at regular intervals return refreshed and energized. Sick days keep employees from infecting the rest of a company’s workforce. So, even though a thoughtless business owner may think paying people to not work is stupid, the results for the company are measurable and positive.

When I think of hiring an employee, my first thought goes to their hourly pay and how much revenue my business would require to profit after paying every employee. The price tag for an employee is greater than their hourly pay; however, and I would find that out the hard way were I to hire someone because I thought the business could afford them. When I consult with business owners who want to hire additional employees, I’ll recommend they count the true cost rather than the hourly rate alone. If this is their first employee, we’ll need to research the mandatory benefits of their country and whether any benefits are so prevalent that their absence would detract new hires. We’d need to determine a benefit strategy so that, as the business grew and more employees were hired, the owner has a clear idea of the existing benefits and any she might add as profit grows. For a business with a few employees who seeks to add more, I would suggest a review of the existing benefits to see if adjustments should be made. An entrepreneur may begin with the bare minimum benefits as a lean startup, but the business will need to increase benefits as it grows to attract and retain employees ((Smith)).

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