Mutually Beneficial: How to Provide the Right Benefits to Employees | DCR Workforce Blog

Mutually Beneficial: How to Provide the Right Benefits to Employees

People say that money isn’t everything, and unbelievably enough they would be right. I find it interesting that this sentiment can even be applied to the concept of employee benefits. But what makes good benefits such a hot commodity and even something that is preferred over a pay raise?

Using research to identify the most desirable benefits can help employers compete in the labor market and also make sure they aren’t wasting money. Below are the most desirable benefits based on employee polls.

The top three most desirable benefits

1) Healthcare: It’s pretty common knowledge that good healthcare is the most desired benefit that employees seek. But what does an excellent healthcare package look like? A decent plan includes medical, dental, vision and prescriptions. Certain things such as being reimbursed even if you go out of network or paying less for a good plan are good plus points.

There are three common types of healthcare plans. A brief description of these plans will give you a general picture of the major part of most employer’s healthcare plans.

The most common healthcare plan types:

  • PPO – Preferred Provider Organization is a plan that allows the member to see any doctor within a nationwide network, which is provided to them.
  • HMO – Health Maintenance Organization is a plan that typically requires a primary doctor only within the plan, except for emergencies. Your primary care physician must refer you to other doctors and services.
  • EPO – Exclusive Provider Organization is a plan that only pays benefits for in-network providers, and they have a national network. Their premiums tend to be lower.

Additionally, many companies also may offer a Health Savings Account to help tackle high deductibles and recurring medical costs:

  • HSA – Health Savings Account is a tax-advantaged medical savings account that can help you pay for qualified medical expenses without federal tax liability or penalty.

It’s no surprise that research shows that the most popular plan is PPO, and most would agree that the slightly higher price is well worth it since it takes better care of your employees.

Important side note: Research shows that most employees don’t read their handbook that discusses the details of their health plan options; instead they just blindly renew their existing plan every year! This results in missing out on unknown benefits or being inconvenienced when they need more coverage.

2) 401(k): Putting money away in a 401(k) allows employees to save money in an account for retirement. They can be pre-tax dollars, then when funds are removed from a 401(k), they are taxed. Or they can be taxable dollars, then when the funds are removed from the 401(k), they are not taxed. If a company offers to match funds, often an employee has to work for a year to get the match portion of the benefit and it’s often prorated based on years of service.

The amount of allowable contributions is based on age. This money is assigned to bonds and mutual funds, and employees can pick and choose where to invest money or there is often a default on the less risky end of the spectrum for those who don’t want to choose for themselves. It’s a great tool to help employees be proactive in saving toward their future retirement.

3) Performance bonuses: When employees are working hard day in and day out it certainly helps to receive an extra bump in compensation for labor and results. Employees often anticipate an annual raise as a result of their increased performance throughout the year.

Additionally, many employees receive a bonus which is structured in various ways, also often tied to results metrics. For example, sales is one area which employees may receive a bonus.

As you can see, many employees prefer to have healthcare and 401(k) options even over a pay raise (although a raise and/or bonus does make the top three list).

As an employer, how do you provide benefits that won’t break the bank and still keep employee morale high?


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Elise is DCR’s HR Manager responsible for everything from compliance to employee relations to admin to just plain old fun. She believe in an “I’m on it” approach when it comes to dealing with being proactive and going above and beyond on the job or when conquering new projects, changes, and challenges.