Attracting (and keeping) quality employees in a tightening labor market
As the country moves toward full employment, employers face the challenge of differentiating their business and job opportunities to attract a limited number of qualified job seekers who have many employment options.
These job seekers also face challenges in finding jobs and companies offering comprehensive benefits, from retirement to health care to paid leave and more. Though some business owners are hesitant about investing in formal benefits programs, these packages are an important factor in attracting and retaining quality employees. The tightening labor market and potential for significant tax savings in the year ahead have created the perfect opportunity for businesses to reevaluate their benefits offerings. You can help your clients understand their options in reinvesting their tax reform savings into benefits policies that will grow their talent pool, and in turn, their business.
The dilution of the Affordable Care Act’s individual mandate spurred by tax reform may cause some individuals to discontinue their health care coverage as associated penalties are being phased out. However, health care benefits are a non-negotiable in the minds of many job seekers. In a recent Paychex survey, small business owners who offered health insurance benefits said their top reasons for doing so were attracting talent (23 percent) and supporting healthier employees (22 percent). Based on those positive impacts and others, 89 percent of small business owners who offered health insurance said it was beneficial to their business.
Retirement benefits also play a major role in attracting and retaining top talent. Not to mention, business owners too need to plan for retirement. In the same Paychex survey, minimizing turnover was reported as the most important reason (23 percent) for offering retirement benefits, followed closely by the business owners’ individual need for the benefit (20 percent). Business and individual savings from tax reform as well as recruitment advantages in a tightening labor market make now as good a time as ever for business owners to offer and invest in 401(k)s and other formal retirement savings plans.
If your client’s business is not in a place to responsibly offer health or retirement benefits, there are ancillary benefits that are highly valued by potential and current employees too. Parking payments, gym memberships and commuting costs all add up. Contributing even some of these costs to employees on a monthly basis can go a long way, as can flexible working hours, work from home options, and increased vacation, sick or personal time.
In addition to voluntary benefits, remind your clients to also be aware of the benefits they’re required to offer by federal, state or local law. For example, there are currently over 40 different states and local jurisdictions with paid sick leave laws applicable to private employers. Each state differs in its requirements for the sick time allotted and the size of businesses required to follow the law. Employers who do not fall under these laws should remain aware so they can gain an understanding of what is standard when it comes to these types of benefits and how their benefit offerings stack up against larger employers and those in different states.
There is a lot to consider when it comes to compiling an attractive benefits package for potential and current employees: how much benefits cost, what competitors are offering, what’s important to employees in different industries and generations, and much more. Based on their business plans, you can help your clients understand which benefits offerings work for their current situation and will help them grow in the long run.