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Using a Benefits Plan to Attract Top Talent

Posted by Corey F. Schechter | Dec 04, 2017 | 0 Comments

Benefits

The unemployment rate across the country remains low, dropping to 3.7% in San Diego County in October. This low unemployment rate has made it difficult for many employers to find the workers they need to keep their businesses growing. Employers who are unable to compete with higher salary offers may, however, be able to use employee benefit plans to attract and retain top talent.

While many applicants go for the job that offers the highest salary, more savvy job-seekers may evaluate the total compensation package to determine which job is right for them. The most important benefits for the majority of prospective employees include health care and retirement savings benefits. However, work-life flexibility and wellness are becoming more important to incoming employees.

Employee benefits allow an employer to offer something of value to the potential employee without the out-of-pocket costs of a higher salary. Retirement plan contributions may be tax-deductible to the employer, allowing them to compete with other companies with deeper pockets. Health care plan costs may also be deductible for the employer. Alternative benefits may offer something that goes beyond financial value.

Work-life balance may mean increasing the ability for employees to telecommute, reduce the number of days in the office, or provide other flexible work options. Wellness benefits include more than just health insurance, and may include proving holistic treatment, healthy food options, fitness classes, or gym membership. Beyond the financial aspects of these benefits, employers can be seen as taking a long-term position in the employee's physical and mental well-being.

Not all employee benefit packages are created equal. Younger-generation employees may be more interested in salary than health benefits or retirement options, with a focus on repaying student loans. Experienced employees may be more likely to have a spouse, partner, and children, making life insurance and health care benefits more important. High-level executives may have an entirely different level of benefit interests that look towards retirement and tax savings.

High-level employees may require executive benefit plans that focus on putting more money into their retirement accounts to maximize the tax advantages of deferred compensation. There are a number of options for deferred compensation with tax advantages, including both qualified and nonqualified deferred compensation plans.

Qualified deferred compensation plans that are subject to ERISA include 401(k)s or 403(b)s. Nonqualified deferred compensation plans may incentivize staying with the company long-term. These may include Supplemental Executive Retirement Plans (SERPs), “top hat” 457(b) plans, tax-favored life insurance plans, or nonqualified stock option plans.

While excellent benefits may help attract new talent, employers also want to retain those workers they tried hard to recruit. According to a survey by payroll provider, Paychex, a number of non-traditional benefits can also be useful in retaining employees. This includes allowing flexible scheduling to improve work-life balance, telecommuting, regular free meals, and offering employees financial counseling.

If you have any questions about how your company can utilize employee benefit plans to attract and retain employees, Butterfield Schechter LLP is here to help. We are San Diego County largest law firm focusing its law practice on employee benefits law. Contact our office today with any questions on how we can help you and your business succeed.

About the Author

Corey F. Schechter

Corey Schechter practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Employment and Labor Law.

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