Small and micro businesses usually don’t have to worry too much about offering employee benefits, but as your company continues to flourish and grow, you will reach a point where you’ll have to start thinking about this. When you hire new people to work at your NJ office space or retail store, you’ll want them to have access to good benefits, so their healthcare needs are taken care of, and so they’re interested in staying with the company.
In this article, we will go over employee benefits – more specifically, the pros and cons of offering it to your staff. Things are never black and white so what’s a benefit might really be a disadvantage for some in some cases, but this article will serve as a good starting point for those of you who’ve just started thinking about this.
Advantages of offering employee benefits at your NJ office space
Here are some of the benefits you could hope to achieve, as an employer, by offering employee benefits to your staff:
- They can help attract good employees
Everyone wants a workplace that offers comprehensive benefits – especially if the coverage includes vision and dental insurance, heal insurance, etc. You know the saying ‘you get what you pay for’. Well, it’s very much true when hiring new talent. If you offer good benefits, you will be able to attract fresh talent with ease. This is good news because as your company grows, you’ll need to hire new people, and you want talented people to want to work with you.
- They boost employee retention
Make sure your benefits package comes with a vacation policy or flexible sick time options. These are key in making or breaking a benefits package, and when you offer benefits that have value, you’re a lot likelier to retain your employees. Losing employees is rarely a good experience and looking for new hires is hard work. Save yourself the time, effort, and frustration by offering good benefits. Then people will seek you out.
- You may get a tax deduction
From brandongaille.com: “Employers which offer benefits may gain an advantage by being able to deduct plan contributions from their taxes. This includes all insurance options, pension contributions, a 401k match, and other costs associated with the benefits.”
- It might save you money on salaries
Your employees may be happy with a lower salary if you provide a comprehensive benefits package. Salaries are usually the biggest expense for any business, so this may come as welcome news. The benefits needn’t cost you the difference, if you go with a good broker and choose your plan wisely. This way the employees at your NJ office space can enjoy good benefits while costing you less.
- Employee turnover rates will be lower.
Hiring and training a new employee is no easy task. And it’s certainly not cheap. Employee training is expensive and time consuming, and if you offer a good benefits package, you’ll be able to retain good employees for longer, therefore reducing employee turnover rate and saving your business time and money.
- Employees will be absent less.
From brandongaille.com: “This is especially true when there is a comprehensive heal insurance plan in place. Wellness initiatives that help employers save money and can potentially let employees expand their insurance options or earn rewards also help to reduce the number of sick days that may be taken.”
- They create recruiting opportunities.
If you offer great benefits, your employees will want to tell everyone about them – for instance their friends, relatives and neighbors. After all, who doesn’t like to brag? This means that you get a little free advertisement and turn your employees into brand ambassadors of a sort, so when you need to find fresh talent, there are more people out there that are interested in working for you.
So, these were some of the key benefits of offering a solid employee benefits package. In addition to these, there are several other benefits. For instance, you know your employees will be alright if they’re ever sick and don’t have personal medical insurance. Just make sure you find a good insurance agent, so you can get the benefits at a low price.
Disadvantages of offering employee benefits at your NJ office space
Like with practically everything else, there are several downsides to offering employee benefits. Let’s take a look at some of them – reasons why offering employee benefits isn’t ideal.
- They cost money
The most obvious downside of offering employee benefits is that they cost you money to provide. They cost a lot of money, too – benefits can cost almost as much as the amount paid out in salary. It’s a little worse because employees usually only view the actual salary as the amount they’re getting paid, instead of considering the value of the benefits package being offered to them.
- The choices are limited
Small businesses especially suffer in this respect, because they have few choices in terms of the type of benefits they can offer. This is usually because good benefits such as retirement and pension plans, short term disability plans and more have high administrative costs which can be prohibitive for small businesses.
- The costs can and will change
From brandongaille.com: “This is especially true for employers who are providing comprehensive health insurance benefits. The rise in cost of health insurance has been steady and rapid, which means benefits are either cut or more costs are paid for to maintain the current benefit package. Even with the Affordable Care Act in place, this still makes it difficult to budget costs on an annual basis.”
- Legal compliance issues
The world of compliance is complex and daunting. Certain benefits must be provided in a specific way, and if you don’t do so, your business may not be in compliance. In order to make sure you’re in compliance with regulations, you will need to pay legal fees, which adds another cost to the process. This is a hidden cost that many employers don’t realize they may need to bear.
- Employee mistakes can be major issues
If you make a mistake in providing a benefit an employee is supposed to get, they may be able to sue you and get compensation. Litigation is something no business wants to think about – not only does it waste tremendous amounts of time and money, but it also ruins your business’ reputation and goodwill. In addition, you may need to pay regulatory fines if you make a mistake.
- Possible dissatisfaction among employees
You can’t please everyone, and there will likely always be someone who isn’t happy with the benefits you provide – no matter how comprehensive they are. This can be demotivating and may cause you to lean towards getting a cheaper plan but bear in mind that the benefits you select will be provided to all your employees – the unappreciative ones and the appreciative ones.
These were some of the main disadvantages of providing employee benefits. The costs and risks are high and when you add potential dissatisfaction to the mix it starts to seem like too much of a hassle. However, we would suggest that you carefully go over the pros and cons in your mind before coming to a decision.
The lowdown: Should you offer employee benefits at your NJ office space?
Absolutely! There are some cases in which you can get away with not offering employee benefits, but for most businesses, it is a must. The benefits outweigh the disadvantages significantly, and most businesses may have trouble finding good talent if they don’t offer a benefits package.
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