How to set up an employee benefits package
Setting up an employee benefits package can seem daunting at first, but it doesn’t have to be overwhelming if you take it step-by-step.
1. A first step in setting up an employee benefits package is to establish your goals and your budget. How much money can you dedicate to both your overall benefits program and to paying for benefits for each employee on your team? Set up a spreadsheet and dive into crunching the numbers.
2. Then, once you’ve established your goals and your budget, make a list of the benefits that you have to provide your employees based on either federal, state, or local law. You’ll need to do a bit of research to find this out, and you can tap into information from your state’s Labor Department to learn what benefits are mandated by your state.
3. After you have your list of must-have employee benefits, you can start to estimate your initial benefits program costs by shopping around for providers.
The cost of each benefit — healthcare for your employees, for example — will depend on your business’s location and the number of employees that you want to insure, among other factors. Keep in mind that medical insurance will be one of the costliest benefits that you provide.
4. Once you’ve created a budget and you’ve estimated how much you’ll have to spend on required employee benefits, you can calculate how much money you have left over to spend on additional perks.
Establishing your goals and your budget is essential to creating your employee benefits package.
5. Now comes the tough part: choosing the additional perks. One way to gauge which benefits your employees might find especially valuable is to survey them.
Send out a survey about their priorities and preferred benefits based on their own unique situation and lifestyle. The top-rated employee benefits tend to be healthcare — which can include medical, dental, and vision — and paid time off. In general terms, you can use the following as a gauge of monthly costs per covered employee:
- Health insurance: at least several hundred dollars
- Dental insurance: $15-$30
- Vision insurance: $5-$10
- Transportation costs: up to a few hundred dollars
- Life and disability insurance: $20-$40
You might also look at data from the Bureau of Labor Statistics that shows various amounts employers pay for a variety of employee benefits.
6. Once you’ve developed your full menu of employee benefits, you’ll want to think about how you’re going to run your employee benefit program. Many small businesses — and especially those with more than 10 employees — find that the best way to keep track of employee benefits is with an HR and payroll software.
A good software program will help you keep track of all of your benefits in one spot and will also help to ensure that the data doesn’t get compromised or lost. A good HR and payroll software program will include features such as:
- Benefits administration
- Reporting and analytics
- An employee self-service option
- Time and attendance tracking
- Accessible customer service
- Mobile access
7. Finally, don’t get complacent with your employee benefits program. Once you have your system in place, keep tabs on how it’s going with periodic reviews. You can run a variety of reports using your HR and payroll software to see which benefits employees are taking advantage of and how often. You can also survey your employees again to get a feel for which benefits have been successful and which have not.
If one, or even several, of the benefits you’ve chosen don’t seem to be popular with your employees, don’t hesitate to get rid of those benefits and test out another one.
Since some employee benefits are required by law, all small businesses must take the time to address the issue of an employee benefits package.
Small businesses, especially, can more easily suffer from having to replace an employee who’s left the company, so making sure your benefits package is attractive to your employees can be crucial to saving both time and money. Ultimately, a strong benefits package can help to boost the bottom line.
A comprehensive benefits package can also help you to recruit employees to your business, attracting the best and brightest. As you create your employee benefits package, consider being as generous as you can given your finances, and throwing in some unexpected, exciting perks to keep your employees happy and engaged.