No matter who you are, money talks. But it’s not just the salary figure that employees look at when evaluating job opportunities. Financial perks and benefits, or a lack thereof, often come into play.
Benefits Benefit Everyone
A few years ago, when unemployment numbers were high and the job market was slow moving, benefits packages took a hit. Employers didn’t have much practical motivation for luring and enticing candidates with attractive perks. After all, a job offer alone was enough to get people excited. But today, with business thriving, benefits packages are once again valuable in enticing candidates to accept job offers. And beyond that, they keep employees engaged and allow organizations to motivate and retain top talent for much longer periods of time.
According to a recent survey from Glassdoor, 60 percent of candidates report that perks and benefits are a major factor in their decision to take a job offer. Even more noteworthy is the fact that 80 percent of employees would rather get additional benefits than a pay raise.
Small businesses and companies with tight budgets often feel like they don’t have much to offer in terms of benefits. After all, not everyone can afford to follow Silicon Valley trends like putting massage chairs in reception areas and replacing elevators with slides. But you might be surprised to learn that these aren’t the perks employees even want.
Employees want perks that are practical and rewarding. As the Glassdoor survey shows, this includes things like flextime and unlimited vacation. But it also includes practical financial perks.
Best Financial Perks and Benefits for Employees
You don’t have to give out pay raises to financially lure and retain top talent. There are plenty of other cost-effective, tax-friendly perks that are mutually beneficial. Let’s highlight a few options that you may consider.
1. Offer HAS Contributions
Did you know that you can set up Health Savings Accounts (HSAs) for your employees? If you’re unfamiliar with HSAs, they’re essentially savings accounts that are funded using pre-tax income and used to pay for qualifying medical expenses.
“In addition to the tax-exempt funds, a HSA can also be maintained for years,” Boost Health Insurance points out. “That means that if you don’t withdraw those funds, your HSA can continue to grow, year over year. That tax-free money can also accrue interest, or even be used to invest in mutual funds.”
As an employer, you can help employees set up HSAs and even make regular contributions to them. You’ll have to study the annual limits to understand how much you can contribute, but these calculations can be handled pretty effortlessly.
It’s also important to note that HSAs are set up in the name of the employee, which means you don’t control how the funds are spent. And if an employee leaves, the account goes with them. Just something to keep in mind.
2. Offer 401(k) Match Programs
For employees in their 30s, 40s, and 50s, retirement benefits are very attractive. And while you can automatically enroll employees into a 401(k) program, take things a step further by offering to match their contributions.
A dollar-for-dollar match up to a certain percentage point – usually 6 to 9 percent of their salary – is a huge perk. Now, instead of contributing $6,000 a year to a 401(k), the employee knows she’s getting a $12,000 contribution. That little boost can enhance a retirement portfolio by hundreds of thousands of dollars down the road.
Educate your employees on the power of compounding interest and use a competitive matching program to entice and retain them.
3. Pay Off Student Loan Debt
Helping employees save for retirement is great, but not every employee is as focused on this long-term goal as they should be. Instead, helping them accomplish short-term goals may be more enticing.
“If you’re triaging immediate needs, newly-graduated students aren’t focused on saving for some nebulous retirement event at 62; they are focusing on paying off their student loans,” says Jenny Chou, chief strategy officer at student lender Darien Rowayton Bank.
One option is to match payments like in a 401(k) program. For example, you can offer to match the first 5 percent of annual student loan payments an employee makes beyond the minimum. Another choice is to help them refinance. With the proper guidance, you could help your employees save thousands of dollars per year — something they’ll be eternally grateful for. Better yet, some companies promise to pay off a certain dollar amount for every year the employee is with the company.
4. Offer Credit Assistance
Americans aren’t very good at handling credit. This has become quite evident over the past couple of decades. If your employees are indicative of the average, then you probably have a number of individuals on your payroll who have poor credit. One perk that may be enticing is free credit assistance and monitoring.
From your perspective, credit monitoring services are defined by the IRS as a form of identify theft protection, which makes them non-taxable. This makes it a savvy choice on both ends.
5. Provide Personalized Financial Guidance
The fact that Americans have such poor credit scores speaks to the financial illiteracy of today’s consumers. Most people haven’t received much financial guidance from parents and peers and, therefore, don’t know what it looks like to be smart with their money.
While it’s technically only your job to pay employees, many would appreciate you taking the time to help them get on the right path. Optional financial guidance is a really good perk to offer. You may even want to hire a financial guidance counselor for your team.
Some of the different topics to help your employees with include: personal budgeting, savings techniques, investing strategies, retirement planning, debt repayment, and home buying.
6. Give Childcare Discounts
Childcare is one of the biggest issues new parents face after the birth of a child. In many cases, the cost of childcare is such a large percentage of a person’s income that they decide to quit the job and stay at home. Others are forced to look for better paying jobs. You might not be able to provide onsite childcare, but you can help out in other ways.
Facebook, for example, offers four months of paid leave to new parents, as well as $4,000 in cash to help offset expenses. Other companies give monthly childcare stipends, or work out deals with local daycare facilities for discounted rates. Could you do something similar?
Let the Benefits Do the Talking
According to a MetLife study on the topic of employee benefits, there’s a direct correlation between benefits and company loyalty. Specifically, the data shows that 71 percent of employees who are satisfied with their benefits are “very loyal” to their employers.
While you have the ability to offer whatever benefits you want — and customizable packages on an employee-by-employee basis is often a smart idea — financial perks like the ones outlined in this article provide a solid foundation.
Office Photo via Shutterstock
Aira Bongco
It never hurts to ask them. Employees have their reason for staying after all. It will help you choose the benefits that will truly help them.
Some employees stay for the benefits. They don’t even mind if the pay is lower as long as they have benefits. This goes to show how important it is.
Thanks for the ideas. I can see how these can help my employees. I agree that you must talk with them but it all starts with having some ideas to work with.
Flextime in the context of work-at-home, and more recently “work anywhere you can get a secure connection”-tough to be sure. Expect even more progress in work-at-home (anywhere) as managers develop trust in the finished product, AND realize that for some positions work-at-home can be a really strong loyalty builder, rife with opportunity for lowering costs, increasing productivity, increasing satisfaction, and more.
Also in the context presented, “unlimited vacation” is a non-starter without qualifications like “unpaid after four weeks total time”, or other practical limits.