Employee Benefits as Hiring Incentives

Whether you are the head of a small, family-owned business or a large corporation, finding the right employee is becoming increasingly challenging. Nowadays, it is not uncommon for several businesses to compete for the services of skilled and talented individuals in the same manner as they would compete for a customer’s business. So, how can your business set itself apart from your competitors and attract high quality, “key” individuals?

Core Benefits
Potential employees have a certain level of expectation concerning benefits. When evaluating a position with your company, they will be interested in those “core benefits” are generally at the top of employee wish lists:
   · Health Insurance;
   · Retirement Plan;
   · Vacation;
   · Flexibility of Schedule; and
   · Working Environment.

Selective Benefits
There are a variety of additional benefits that can set one employer apart from another when courting new executive-level employees. However, businesses need to be aware that Internal Revenue Service (IRS) discrimination rules may require the inclusion of such benefits in already existing employee benefit packages. Fortunately, some benefits allow employers to be selective.

Split Dollar Arrangements
A creative method whereby the employer uses business dollars to provide high quality permanent life insurance for a select employee. Generally, the split dollar arrangement also ensures the employer will be repaid any premiums paid on the employee’s behalf. The employee benefits by acquiring additional life insurance protection.

Executive Bonus Plans
This benefit allows the employer to pay an executive employee a compensation bonus that is deductible to the corporation. The employee then uses the bonus to pay the premium of a life insurance policy insuring the life of the employee then uses the bonus. The employee owns the policy.

Disability Insurance
A growing concern for many individuals is how they will maintain their financial and personal well-being in the event of a debilitating accident or illness. In addition, group disability plans offer only minimal amounts of coverage. Therefore, individual disability insurance paid by the employer is fast gaining popularity as a much sought after benefit by prospective employees.

Voluntary Benefit Plans
These plans are funded entirely by the employee, generally through payroll deductions. Typically, a menu of benefit options (i.e. dental insurance, disability insurance, etc.) is given to employees in addition to core benefits. Employees then pay for whichever benefit(s) fits their respective financial needs. Because voluntary benefit plans are offered in a group setting, costs are generally more affordable than if the employee were to purchase similar benefits individually.

In today’s work world, business owners are quickly realizing that salary alone is no longer the only factor highly-skilled employees are seeking. Just as you are shopping for the “right” employee, they are shopping for the “right” employer. They are looking for the best combination of salary and benefits for their situation. Therefore, employers have much to gain by offering a creative benefits package that sets them apart from the competition.

This article is for general information only and is not intended to provide specific advice or recommendations for any individual. You should consult with your attorney, with regard to your own individual situation.

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