Question: As owners of our company, my husband and I would like to convey to our employees that they are valuable to our company in that they earn more than just their hourly wage or salary. What suggestions do you have?

Answer: In today’s current economic environment, recruiting and retaining employees is vital for PROs. Benefits are an important part of employee compensation and, as owners and managers, you need to constantly explore the many benefit options available for companies of your size. You then select the benefits most valuable to your employees, while financially affordable for your company. Just as important, once these benefits are selected and implemented, you effectively communicate these programs to your employees on a continuing basis.

We will discuss several benefit options and then suggest an effective way to communicate this to your team.

LEGALLY MANDATED BENEFITS

All companies are legally obligated to offer the following:

Social Security and Medicare – 7.65% as mandated by the federal government. The employer pays 7.65% and the employer pays 7.65%.

Workers’ compensation insurance – This rate is based on the company’s “experience mod” — a measure used by insurance companies to frequency and severity of incidents and claims on an ongoing basis. The employer pays this amount in its entirety.

Unemployment insurance – Each state has its own method of calculating this amount and, again, the employer pays this amount in full each year.

Paychex.com reported that a study from June 2022 conducted by the U.S. Bureau of Labor Statistics revealed that the median cost to businesses of private sector employees was $2.93 for every hour worked. The estimate for year-end 2023 was $3.

ADDITIONAL BENEFITS YOUR COMPANY CAN OFFER

Potential employees value benefits in their job selection process and even more importantly, retaining employees is dependent on a strong benefits package. As an incentive to reward and to promote long-term employees, benefits that increase over time are amazingly effective.

Here are the most common benefits offered by PROs:

Health Benefits – Paychex.com provides the many options available to employers in the most concise fashion:

• Group health insurance plans – This is the most common program whereby the employer contracts with an insurance provider for coverage. The employer decides if premiums will be paid entirely by the company, or if the employee will be responsible for some portion through payroll deduction. This is commonly done as a pretax deduction, which is another benefit. Often this benefit is only offered after a certain period of employment. Additionally, long-term employees may be rewarded with either lower premiums or additional coverage after company-established work experience periods.    
• Health savings account – Employees have access to pretax funds that can be used for qualified medical expenses. An HSA allows both employees and employers to use untaxed funds to pay for deductibles and copayments for medical expenses. This can lower out-of-pocket expenses for preventive health care services. In addition to insurance companies, HSAs are offered by banks, credit unions and other financial institutions.
• Dental and vision coverage – These health options go beyond the standard major medical coverage by most insurance plans and can be a valuable addition to your company’s benefits package. Some PROs will offer these coverages after a certain period of work experience to incent employees to strive to achieve long-term service with the company.

Financial Benefits

• Retirement accounts, i.e. 401(k)s and SIMPLE IRA Plans – These plans are beneficial to the employee in that they offer pretax contributions to a retirement account, often with an employer match up to a certain percentage. These programs demonstrate and encourage the company’s willingness to reward long-term employment.
• Annual pay raises – Annual performance reviews are vital in establishing and maintaining communication between management and employees. Employees should be aware and comfortable with the fact that there is a direct relationship between performance and pay.
• Life insurance – Plans can be offered through the company where the employee can enjoy lower rates as opposed to shopping for policies themselves on the open market.

Work Benefits

• Uniforms – Comfort and safety for the employee that works in the yard and in the field while also projecting professionalism for the company. If affordable for your company, this benefit is worth the investment.

Family Needs Benefits

• Flexible work schedule – PROs can demonstrate their commitment to employees by offering flexible work schedules that can accommodate family and personal obligations.  
• Work at home day(s) – The COVID pandemic led to the development of technology and business practices to allow for working away from the office. Now, in certain situations, working from home is not out of the question.   

Benefits from company membership in other organizations

Become familiar with organizations and associations with which your company is a member, such as local chambers of commerce, builders’ associations and rental organizations. Many of these groups may offer benefits that your employees may find attractive. An excellent example is the Portable Sanitation Association International where company membership entitles employees and eligible family members to participate in the PSAI Scholarship Program. Scholarships are available for college, university or trade school educations.      

Outside training and seminars

Financial planning and budgeting are the most useful and common topics, especially when an employee is nearing retirement. 

• External opportunity – schedule or attend an after-hours seminar or presentation with a speaker and encourage both employees and family members to attend. The company could pay the fee, if any.
• Internal session – invite a speaker to attend and present at a company meeting. 

Creative fringe benefits

• Gift cards for rewards such as positive customer feedback.
• Employee suggestion program – encourage innovation and improvement by rewarding ideas that are implemented.
• Birthday celebrations – A monthly company-wide meal for everyone celebrating a birthday that month shows appreciation and builds company morale.
• Paid volunteer day(s) – We have heard of companies that will support an employee spending a day volunteering for a cause or an event that they personally support. This benefit is yet another way that the PRO shows support for the employee outside of the work environment.

SHARE WITH THE TEAM

After investigating various ideas, analyzing the cost of numerous benefits programs, soliciting employee input and interest, you may also want to consider employing the services of a human resource consultant. These professionals can evaluate your proposed programs while also suggesting other ideas based on new emerging trends. Please keep in mind that this should be an active, ongoing plan.

Once the benefits plan is in place, create an employee benefits statement that adds the appropriate costs of the various plans to the employee’s current salary. The legally mandated benefits and, if offered, health insurance, 401(k)s, retirement accounts and uniforms have exact costs while flexible work schedules, gift cards, birthday celebrations and the like build morale and camaraderie. List all these benefits below the salary amount and the total compensation to the employee will be significantly higher than their standard paycheck.

Present the benefits statement during annual employee reviews.

FINAL THOUGHTS

Working for a company is more than a paycheck. Employees are the company’s most valuable asset. Establishing – and promoting – the value of a benefits program will go a long way in retaining current employees while also aiding in the recruitment of the best new job candidates. Strongly consider the employee benefits statement idea to illustrate the true value of working for your company.