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Employee Benefits
Employee benefits have a significant financial and administrative impact on a business.
The educated American work force has come to expect a comprehensive benefits program;
the absence or inadequacy of such a program can seriously hinder a company's ability
to attract and retain the best personnel. Designing the right benefit plan for your
employees is a complex task that includes taxes, legal aspects, funding, and selection
of vendors or administrators.
What is an Employee Benefit Plan?
An employee benefit plan protects employees and their families from economic hardship
brought about by sickness, disability, death, or unemployment; it provides retirement
income to employees and their families; and it provides a system of leave or time
off from work.
A comprehensive benefit plan can include health insurance, disability insurance,
life insurance, retirement plan, flexible compensation (cafeteria plans), and leave
from work. Broadly defined, a benefit plan can include other components such as
bonuses, service awards, reimbursement of employee educational expenses, and other
benefits appropriate to employee responsibility.
Why Offer Your Employees Benefits?
Here are some of the reasons employers offer benefits:
- To attract and hold capable personnel.
- To keep up with competition.
- To foster good morale.
- To provide opportunities for advancement and promotion as older workers retire.
A combination of benefits programs is the most effective and efficient means of
meeting employees' economic security needs. For many employers, a benefit plan is
an integral part of total compensation, because employers either pay the entire
cost of a benefit plan or have employees contribute a small portion of premium costs
for their coverage.