Employees often don’t understand or appreciate their fringe benefits, so why not motivate them by explaining what their position is really worth.
As an employer, you’ve probably found that most employees have no idea what their benefits package cost you. Most employees are focused on their base pay, bonus schedule, and other tangible methods of payment. Many don’t have the slightest idea what fringe benefits add to the employer’s payroll burden and may look at their fringe benefits as an entitlement or requirement that comes with every job or position they hold.
It’s no surprise to employers that most fringe benefits are continually on the rise and that they quietly add to everyone’s base pay. If you offer health insurance to your employees, that cost has also been increasing, but even faster, and you as the employer need to bring the fringe benefits cost to their attention. By doing so, you will give your employees a new appreciation for and understanding of their overall salary package. This clearer understanding can also be useful information when discussing salaries, raises, and promotions.
Create a personalized report for all employees, showing them the value of their company-provided fringe benefits and the total compensation they are receiving. The totals that you come up with by doing this exercise are likely to be an impressive amount for each employee.
Have your accountant or bookkeeper generate the numbers quickly and easily by using the following steps:
1. Begin with the premiums you pay for health, life, and disability insurance. Include costs you pay for
any other benefits, such as parking or toll fees.
2. Add in any dollars you contribute for the employer match in your 401(k) plan. Or if you offer a profit sharing plan, include those contributions.
3. Include the company’s share of medicare and social security taxes paid for each employee.
(If employees were self-employed, they would have to pay those taxes themselves.)
4. Include costs for unemployment and workers' compensation insurance.
5. Conclude the report by listing the hours of paid vacation or sick leave that you grant along with any rest and relaxation benefits that you may offer.
Your employees are all important team members. Make sure you don't overlook your lower wage employees; motivate them with no-cost benefits like free transit passes, car washes, and flex time if at all possible. You might even consider allowing them to work half-day on every other Friday, with slightly longer hours on other weekdays to make up the time. If this type of arrangement would work with your type of business, give it a try. Let's face it, most employees are looking for ways to save time and money and to simplify their lives any way they can.
If you are looking for immediate ways to solve problems or challenges, we are available for private consultation and encourage you to give us a call today. We will be happy to discuss your situation, with no obligation on your part. If we feel that we can be of assistance to you, we will provide you with specific recommendations, including objectives, time frames, and costs.
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