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Strategies for Competitive Staffing

 

In order to remain competitive, while attracting and retaining top employees, employers are faced with the task of creating a winning compensation strategy that will not only accomplish these objectives, but will also stay in line with corporate budgeting constraints. It is a fact that employee compensation is much more than just a salary. It includes all the "perks," such as vacation and sick time, company vehicles, corporate memberships, and a variety of benefit options designed to provide employees and their families with, at a minimum, health insurance and retirement income. While employers are legally obligated to provide certain state and federally sponsored benefits, the majority of employers also offer, and often contribute to, additional employee benefits for their employees. Employee benefit plans fall into a number of categories, including:

  • State and Federally Mandated Benefits

  • Group Benefits

  • Retirement Benefits

  • Other Benefits

State and Federally Mandated Benefits

Employers are required by law to participate in certain programs, either through paying taxes or by making contributions. These benefits include workers compensation coverage, unemployment insurance taxes, Social Security taxes, Medicare contributions, and state disability laws where applicable.

Group Benefits

The majority of employers voluntarily offer health-related benefits to employees. In most instances, the cost for employee health-related insurance is shared by the employer and the employees. There are a wide range of group benefits available to employers, including:

  • Group Term Life Insurance

  • Medical Insurance

  • Dental Insurance

  • Disability Income

  • Vision Insurance

Deferred Compensation

A powerful key-employee retention tool is the implementation of a non-qualified deferred compensation plan. These types of plans are typically designed for executives and key-employees because the company can be discriminatory to whom they involve in the plan. Because of this, there are many advantages associated with this type of plan including exemption from burdensome tax requirements and some ERISA laws. However, the Jobs Creation Act of 2003 states that contributions made by the company to the plan are not deductible by the company until the employee claims them as income. It is crucial, therefore, that the implementation of a non qualified deferred compensation plan be reviewed by a tax professional to make sure that everything is in order. Our investment advisors can help you, the business owner, explore various funding options for a non-qualified deferred compensation plan.

Tax Incentives

The ultimate goal of your business is to be profitable, and employee benefits can be a piece of the puzzle. First, they are a direct expense to the business and are therefore tax deductible. In addition, there are certain benefits that you, the owner, can utilize to maximize your personal wealth. Strategies such as a pension plan or a deferred compensation plan would allow you to direct corporate dollars into an investment vehicle for yourself on a tax-deferred basis. Certain regulations do require the owner to include some or all of the company's employees into these plans.

Regulations

The majority of employee benefit plans are federally regulated and have strict guidelines to follow regarding nondiscrimination, rights and privileges for terminated employees, continuation of coverage rules for medical insurance, and rollover and distribution requirements for defined benefit and defined contribution plans. Click here to read more information about benefit plan regulations.

Reality:  According to the 2014 Training Industry Report from Training Magazine, the average cost for training an employee for small businesses was about $1,200. That doesn't take into consideration hidden costs like on the job training. 

Don't lose the difference makers on your  team.