Your workers are the backbone of your company; without them. You cannot compete in the business sector. This is why when it comes to looking after your employees. You should be willing to go the extra mile for their needs. There are numerous factors employees look for before joining any company. Including the financial perks of working for that business.
Monetary amenities are reassuring for your employees in many ways; they make them feel secure, take away their stress from working two jobs, and encourage them to continue working for you. If you don’t offer your workers anything besides a yearly promotion, don’t be surprised if they walk out on you. So what financial benefits can you provide your employees? Read on to find out more:
1. Save Your Employee’s Daycare Costs
A significant amount of your employees may be parents. As a result, a working parent’s biggest challenge is finding a reliable babysitter and daycare for their child. The cost of child care is expensive. This results in parents choosing to quit work and stay home with their babies instead. Consequently, not only do you lose a valuable worker. But it also makes it hard for your employee to rejoin the workforce after a few years.
According to a study by Bright Horizons, only one in ten men leave the workforce to focus on raising kids, but around two in five women will quit for their children. The only way you can prevent this from happening is by offering your employees daycare services. Providing child care shows you invest in your employees and makes your government look favorably at your business.
By setting up a childcare resource at your work, you qualify for Credit for Employer-Provided Childcare Facilities that can save you money and give you tax deductibles. The rules regarding this care credit are contained within Form 8882, which states that you can get 25% of childcare costs and claim 10% of childcare resources as an employer. Not only are you providing employees peace of mind by allowing them to bring their children to work, but you are also getting the money you can invest into building a better daycare center.
Additionally, having more money can give you leeway to experiment with how you want to handle the daycare situation. You can either provide your employees with an on-site care facility or give them a childcare bonus allowing them to pay for their baby’s daycare center without spending anything out of pocket.
2. Provide Employees with Paid Time Off
Employees need space to recoup and be with their families, but not if it can cost them their pay. This is what makes paid time off (PTO) important. They allow employees to take time off without worrying if their salary might be deducted. Employees cannot perform well if they’re burnt out or sick. Lack of holidays only encourages absenteeism, impacting your production timeline and delaying projects.
Moreover, if an employee is not well, they can infect others, negatively impacting your company’s performance. According to Forbes, the average American worker gets eleven paid vacation days annually. If you’re a private enterprise, employees who work for you are entitled to 15 days of paid leave after five years and 17 days after ten years.
3. Access To Retirement Plans
You should help your employees prepare for their future by giving them a list of retirement plans. The purpose of these incentives is to help employees save money for their retirement while reducing the amount of taxes they will need to pay on their saved income. There are several types of retirement plans, including 401 (k), 403 (b) plans, and pensions. But all of these plans can be sorted into two groups, that are employee-defined benefits retirement packages or defined contributions retirement plans.
Defined benefits provide your employees a source of income after they retire based on their years of service and their salary. You pay this income to them in regular monthly checks.
On the other hand, defined contributions are a type of retirement package that allows your employees to contribute some of their income into their retirement account each month. You can also contribute on the company’s behalf to your employee’s account. The latter is prevalent among most Americans.
4. Help Employees Cover Their Tuition Costs
According to the lending tree, Americans owe $1.78 trillion in student debt. This is a national crisis within the US since student debt overshadows any other type of loan. While the Biden administration is trying to forgive student loans by the billion, it’s not enough. As a result, in 2021, more than half of bachelor’s degree recipients took out student loans, placing a debt of $29,000 after graduation. But you can help.
By offering to pay for your employee’s tuition, you can make them feel more valuable to your company. Tuition reimbursement is an investment; in exchange for your employee’s services, you’re taking care of their biggest problem: debt. Likewise, if you have a skilled worker who wants to go to school but doesn’t have the funds for it, you can assist with their education payment. For instance, it’s not uncommon for law firms to pay for their paralegal to go to law schools, allowing them to become lawyers.
To get your money’s worth, you can ask your employee to work for your company for a certain number of years, ensuring your company benefits from your investment. Furthermore, under the Internal Revenue Code Section 127, as an employer, you can provide tax-free payments of $5,250 per year to your employee for their educational expenses. This means you’re deducting about $5,250 from their taxable income, making it a tax credit. Your employee will have to pay less taxes for the money they make and can easily proceed with their education.
Companies need to look after their employees well. Your employee may have too many expenses, and having a fixed income can only pay for some of them. They may be struggling as parents or students, which can force them to take a drastic decision and leave your enterprise.
Losing a skilled employee is costly, so to stop them from leaving, provide them certain privileges; these include a daycare center, a list of retirement plans, paid leaves, and tuition assistance. Access to these resources encourages your employees to continue working with you. The bottom line is if you want your employees to stay with you, give them a reason to continue working with your firm.