4 Pillars of Employee Benefits

Employee BenefitsEmployee benefits in the United States are costs that are underestimated by employees and employers.  Employees don’t often appreciate what an additional financial cost these benefits are above and beyond a salary.  Employers often miss just how much employees value (and brag about) these benefits.  Businesses that are built to last (and sell) have four key pillars of employee benefits in place and in this article we will speak briefly about each of them and share why those pillars provide a firm foundation for business owners.

Health Insurance

This is a well-known benefit that has had its ups and downs in the last decade due to changes in federal legislation.  But it’s routinely one of the most important benefits potential employees ask about.

Employers should realize that health insurance is just as much peace of mind as it is doctor’s visits and prescription drug coverage: employees know that in the near and medium term, one aspect of their life is “handled.”

Health insurance should not be underestimated as a key recruiting tool and differentiator.  Deeper and more comprehensive coverage that the basic level is not inexpensive, by any means, but employers should consider that it’s a benefit that can pay for itself, in many different senses of the word.

Small Business Health Care Tax Credit

Some small businesses can qualify for tax credits.  Broadly, all of the following conditions must apply:

  • Fewer than 25 full time employees (FTE)
  • The average employee salary is less than $56,000/year
  • The business pays 50% of the premium
  • The coverage is offered to all FTE  

The general rule is the smaller the business, the larger the credit on offer.  Learn more (and use an estimator) here.


Post March-2020, more and more employees are thinking actively about their futures.  Offering some options that include company matching is a way for employees to check off another box on their life planning list, this time in the “long term planning” category.

A major mistake that employers make is giving employees many investment choices.  This is difficult enough in the cereal aisle, but it’s paralyzing to many given the life implications of retirement planning.  Do the hard work of coming up with two, maybe three choices for your employees, covering various situations and risk profiles.  This will simplify the process for them and make it more likely that they will participate.  Companies have to pay a charge for administering the program regardless of how many participate in it, so employers might as well get the mileage out of it that employees are hoping to get as well.

Depending on your company makeup and situation, profit sharing might be worth incorporating/offering as well.

Paid Time Off

American work culture tends towards overwork.  While there isn’t yet an English word for “death by overwork” (karoshi in Japanese) many Americans leave vacation time untaken (or would rather sell that time back), leading to an unhealthy imbalance between work and real life.

The extreme reaction to this imbalance from some Silicon Valley companies has been to offer “unlimited” vacation, though how this works practically is still very much a work in progress.

A more interesting solution is the Swedish one: employees get paid more during their vacation days, giving a financial incentive for people to actually take time off for themselves.  Like many of the Swedish work experiments, it’s been successful.

Encourage people to take off for themselves and lead by example.  You don’t need to go anywhere exotic, you just need to signal that you value people’s personal lives, which is one of the big reasons they show up for you in the first place.

Remote Work

Before March 2020 remote work may have been considered a luxury enjoyed by the few but as companies consider what to do with their office space long term they should consider the fact that a growing segment of Zoomer workers put a remote work option in the same hallowed category as health care or even above retirement benefits (what’s that?).

The last two years have given observant employers plenty of time to consider how their businesses operate remotely vs in person and those who insist on in-person employment will need to have considerable offsetting benefits to compensate for that perceived loss.

If you need help implementing one of these employee benefit pillars, we know some consultants who can help.  Give us a call.