Insuring Success: Benefits can keep workers from leaving their jobs

The current unemployment rate in Missouri continues to be below the national average, with more jobs available than people to fill them. Even with the economy appearing to slow, the labor market is tight, and attracting good employees is still a major concern among employers.

Employees are able to be selective when considering employment options. Once an employer has been successful in hiring personnel, retaining the new employee becomes a concern. Without incentives, employees become targets for "employee poaching" by competitors.

Pilfering

One way to stop the employee population from being pilfered is through benefits. Providing a comprehensive benefits package can provide an employee with a sense of well-being, as well as a feeling of being valued within the company.

For the employer, creative benefit packages can vary from expensive to virtually no cost, and from complex to simple. Examples of benefits on the high end of the scale are health insurance, 401(k)s, profit sharing, vacation packages, paid training, educational reimbursement and bonuses.

Of course, some of the costs associated with these programs can be decreased by having employees contribute a portion of the cost. Pay increases and bonuses increase FICA taxes for employers as well as workers' compensation costs. Employers need to consider their current situation on workers' compensation insurance before deciding on pay increases versus additional benefits.

The effect on workers compensation insurance cost is determined by the current insurance rate of the governing class on the policy, as well as the current experience modification factor. If the employer is seeing increasing insurance rates or an increasing experience modification factor, the cost to increase the pay of employees could be substantial.

Other benefits

Other benefits an employer can offer include employee discounts at local merchants, flextime, working from the home and casual dress. Voluntary and supplementary insurance products can also be offered to employees at a reduced rate. These products can be payroll-deducted on a pretax basis, saving employees on taxes as well as lowering the FICA contribution made by the employer on behalf of the employee.

A pretax flex plan can also be put into place to help an employee with copays, deductibles, and dental and optometric care that may not be covered by other insurance. These costs also can be taken on a pretax basis, saving the employee money and in turn lowering the amount the employer contributes on FICA. A recent survey by HR Focus on the value of employee benefits found that more than a 40 percent average of respondents chose increased benefits over more pay. This may apply to southwest Missouri as well.

Key issue

The fact remains that employees do consider the benefits a prospective employer is offering in making a decision to accept a job offer or to remain with an employer. The Springfield Area Chamber of Commerce surveyed its membership and found the No. 1 issue with employers was the attraction and retention of their staff.

The benefit package for a business needs to be flexible, tailored to the industry, and comparable with competitors. Some factors in determining what should be included in a benefit offering are the age of the employees, gender, marital status, children and, of course, cost. What is perceived as a benefit to some may be of no benefit to others.

(Debra Hampton is a work force benefits consultant with Ollis and Company.)