Regardless of the product or service you’re offering, more often, another business has already been selling the same for years. The number of businesses operating today is one of the reasons why startups will find it hard to penetrate the market and stand out from the competition. If you see yourself in this dilemma, make the most out of fringe benefits.
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What Are Fringe Benefits?
In its simplest sense, fringe benefits are benefits provided by employers that aren’t required by the law. Fringe benefits function as ‘add-ons’ to employee compensation and mandated benefits. Some of the most common fringe benefits provided by employers to their employees are medical and dental insurance, employee profit-sharing, education assistance, as well as free meals, drinks, and snacks. Some employers also offer wellness stipends and year-end and performance bonuses to their employees.
Aside from benefiting the employees, offering fringe benefits can also provide tax-advantaged benefits to the employers. For example, life insurance and health plans as fringe benefits are actually tax-deductible for small businesses and tax-free for employees.
How Do Fringe Benefits Work?
As an employer, you’re responsible for deciding what kind of fringe benefits you’ll offer to your workforce. Fringe benefits are often part of your employees’ overall compensation package, and these benefits are introduced to them the moment they start working on your company.
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However, this doesn’t mean that employers have to solely foot the entire cost of fringe benefits and salaries of their employees. In fact, some businesses would offer fringe benefits in lieu of higher wages. Implementing this strategy in your own business allows you to save more money in the long run without compromising the wellness of your employees.
What Are The Pros Of Offering Fringe Benefits?
Regardless of how challenging it is to start and run your business, you should never disregard the idea of offering fringe benefits to your employees. Contrary to popular belief, fringe benefits will not cause you to break the bank; these benefits are actually cost-effective investments that can help your business earn more profits and succeed in the industry.
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To drive the point home, listed below are some of the pros your business can experience when you start providing fringe benefits to your employees:
– Easier Talent Acquisition
Regardless of the niche of your business and the goals you want it to achieve in the future, you’ll always need to hire employees. It’ll be challenging for any business owner to succeed if they’re working alone. Do you think you can effectively manage different facets of your business at the same time? Will you still have the time and energy to accomplish your personal responsibilities if your hands are already too full?
Offering fringe benefits will make it very easy for you to acquire the top talents in the industry. Employees with several years of experience in a particular niche or industry will always choose to work with companies that will offer them more than just competitive salaries. So, when you offer fringe benefits, you’ll increase your business’s attractiveness in the market and supplement your marketing effort in hiring as well.
– Better Talent Retention
For your business to progress long-term, it’s not enough that you only hire the top talents in the industry; you should also exert effort in retaining them. Hiring and firing employees repeatedly can cost a lot of time and money from your business, and can become the reason why your business will gain a negative reputation in the public’s eyes. No single shareholder or employee would want to work with a business that doesn’t know how to keep their workforce strong.
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Fringe benefits can be a great motivation for your employees to continue working with your business. The fringe benefits you’ll give to them can also help them improve their own health, as well as that of their own families. Offering benefits that aren’t required of employers will make employees feel valued and appreciated, and this will surely inspire them to continue working with you.
– Boost Employee Productivity
Providing a conducive working environment for your employees doesn’t always guarantee that they’ll become productive. Employees usually experience problems with their finances and healthcare, which can become the reason why they’ll lose the motivation to work properly. How can an employee work properly if their tooth is aching badly? Do you think your employees can function well if they’re always sick?
Fringe benefits can boost your employees’ productivity as these can alleviate the common causes of their stress. When your employees don’t have to worry about where they can get the money to take care of their overall health, they’ll be more focused at work. Over time, this can mean better output and more profits for your business.
What Are The Potential Cons?
Offering fringe benefits can provide many benefits to your business and employees, but before you implement any program, it’s best if you consult a tax professional or accountant first. Not all fringe benefits are treated equally by the Internal Revenue Service or IRS, which is why you should consult a professional to ensure that you know what to report to the agency. Working with a professional is essential when offering fringe benefits to your employees because one small error can erase all of the financial benefits you’ve collected.
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How Can You Design Your Fringe Benefits Package?
Selecting the fringe benefits you’re going to give to your employees can be overwhelming, especially if you don’t know where to start. Although you can take note of the fringe benefits offered by other businesses, deciding which ones suit your business can still become a struggle.
To make things easier for you, take note of the following tips when designing your fringe benefits package:
– Make It Count
Only offer fringe benefits that are aligned with your business objectives. To do this, simply revisit your business strategy and study employee behavior.
– Increase Employee Choice
If you want your fringe benefits to gain the approval of your workforce, give them the opportunity to choose. Aside from offering health coverage and life insurance, consider providing educational training and caring responsibilities (to parents or guardians).
– Inform Your Employees
Planning the perfect fringe benefits package will be useless if none of your employees know that these actually exist. After designing your fringe benefit package, take the time to explain this matter to your employees and how the package fit with your business goals.
Heed Your Planning And Implementation
Once planned and implemented properly, offering fringe benefits to your employees can become your business’s ticket to success. Not every business operating in the market today offers these benefits to their employees, so making sure that yours does will help your business stand out.