Why Benefits are Good for Business
Many employers report that they cannot attract or keep good employees when they don’t offer health insurance at their companies.
For example:
“My friend is a CPA who needed one key assistant. She went through far too many of them before adding insurance to their compensation. She thought she could find skilled housewives covered by their husbands’ insurance or smart college kids on their parents’ health insurance, but it didn’t work out that way. She discovered that the indifferent-to-insurance employees she would attract were just not reliable and dedicated. Her good employees quickly left. For her, the cost of constant interviewing and training, not to mention poor work quality, outweighed the cost of providing insurance.”
“When I was in my 20s, I was making surprisingly good money as a waitress, but having seen the cost to my family members and friends of uninsured illness and injury, I left for an office job that paid less money but provided health and disability insurance.” (Both quotations above by Lanore Larson, MBA, USC Marshall School of Business; Marketing Specialist)
Clearly, salary is not the only consideration for top caliber employees. WellPoint Research reported that:
- 83% of American workers prefer employers who offer at least voluntary benefits.
- 90% of job seekers consider employer benefits options “important” to their choice of where to work.
- 60% of workers said they’d stay put in a current job with a benefits plan, even if offered more money to work elsewhere.
In addition: there are tax benefits and other monetary rewards to employers who offer employees benefits. One example:
A Section 125 POP Plan, AKA a cafeteria plan, allows businesses to offer a range of benefits for virtually no cost. Employees buy the insurance plans of their choice by having the premiums deducted from their paychecks on a pre-tax basis. The employee’s taxable income is lower, and so are their FICA and Medicare taxes. It also means that the employer’s share of the taxes is lower. The employer’s FUTA taxes will be lower, as well.
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