Modern compensation goes far beyond the salary or hourly wage number that you offer to your employees. If other employers in your industry are offering a competitive employee benefits package, the candidates you bring in for interviews will also expect to see those kinds of features in your own compensation package.
Want to make sure your offer is competitive so you can draw the best talent? Looking to understand how to design a benefits package? Here are 7 factors for designing your employee benefits package:
Top talent will be doing their due diligence and looking over the medical, vision, and dental insurance you offer. They're looking for the different plans you offer—more than one plan is ideal, since it gives the employees options. The procedures your employee health insurance covers, as well as the premium the employer pays, are key factors in whether candidates will consider this insurance competitive.
Other factors your employees consider include the deductible, and copays for medicine and visits to doctors. Balance the need for flexibility for your employees with the need to economize, so they have options that work for them. Shop for multiple potential insurance vendors to get a strong quote, because you can pass that savings over to your employees.
The amount of paid time off you offer, be it 10, 15, or 20 days a year, is important. However, there are other factors, including state laws. Some employees prefer an offer with fewer days but the option to roll them over from year to year, rather than a "use it or lose it" policy.
Employees also want to know which holidays are covered. It’s also important that they know how your company handles both short-term leave, as well as potential disability or other long-term leave situations. This will provide the employee with the information they need should a major illness or injury prompt multiple weeks out of the office.
If you choose to offer a 401(k), your candidates will want to know if you will match their contributions up to a certain percentage, since that is an additional element of compensation that shows their employer's investment in their future. Although the national average for matching contributions hovers around 3.5%, some employers match up to 6%, while others might go much lower.
You'll also want to consider whether you want to use the retirement plan's vesting features as a retention initiative, requiring employees to stay for a certain number of years before your contributions are "fully vested" and theirs to keep.
Not every company offers the same kind of life and disability insurance. If you choose to offer this in your employee benefits package, you want to clearly express to your employees what is offered, what is covered, and whether there are ways they may opt out or increase their coverage for an additional fee. These policies usually come with stipulations that you want to share with candidates.
Modern workplaces have changed a lot in the way they offer maternity and paternity leave, from how many weeks are allowed total to how much paid or unpaid time new parents can take. Some organizations also offer different amounts of time for maternity and paternity leave, while others offer a flat rate for both parents.
As a business, are you open to flexible returns to work during the early stages of parenting? How much leave will you grant to primary versus secondary parents? Work with members of your team to create a policy that best reflects your company's values.
When employees travel on business, they want to know that the company will handle all the details well. After all, they are taking the time and effort to travel so your business can grow.
If your new employee will be traveling for work, tell them about how expensing travel works, whether there will be a company credit card, and how complex the process of payment or reimbursement is. Your employees may also want to know about insurance and liability while on these trips, and features like being able to put travel on personal credit cards in order to get reward points and then be reimbursed.
Depending on the context of your company, you might need to also discuss other expenses, like transportation benefits, phone use, childcare, summer hours, or even employee stock options. Companies widely offer these services, but they are not universal. Pick the ancillary benefits that fit your corporate culture the best.
Surveys say that 72% of employees say more work benefits would increase their job satisfaction. Satisfaction leads to tenure at a job, meaning lower turnover and higher productivity. Given that hiring and training employees costs your company time and capital, ensuring job satisfaction is one of the best ways to improve your talent investments.
When you are looking to appeal to new candidates, don't underestimate the power of devoting a substantial budget for a benefits package. Part of creating a strong employee benefits package is also noticing what matters to your staff: It sends a very powerful message to potential new hires if they see that you've written out policies for everything from how you handle business expenses to how you assist with parental leave. Many employees want to see that there are clearly explained benefits to working for you, even if the salary isn't the highest one they are offered. Make sure your offer stands out!