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Benefits aren't what they used to be. Decades ago, many people were covered by defined benefit pension plans. Some companies might have given retirees health care benefits for life. (Computers were also the size of a room and you could buy a VW Beetle for about $2,000. Times have changed.
Years ago, people often assumed their company would take care of them. Work for the same firm until you reached retirement age and the company would thank you with a comfortable retirement. Today, employees need to be much more involved in and knowledgeable about their benefits.
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Do your employees understand the following employee benefits?
Retirement plans. They likely have a 401(k). The company probably provides matching contributions up to a certain level. It would be foolish for an employee to walk away from "free money" by opting out of their plan. In addition, the plan likely offers choices of retirement investments. If they simply let money accumulate in a money fund, they aren't earning much of a return.
Understanding health insurance. It's likely the employee is contributing towards this plan too. They might have a choice of plans offered at work. How are they different? What are the deductibles? Where does dental or vision insurance fit in?
Life insurance. Your firm might cover employees with an insurance policy through their job. Perhaps their job requires them to travel a lot. Life insurance provides peace of mind, though there are some drawbacks. Term life insurance doesn't build cash value for the employee. Term insurance costs more, the older you get. If the employee leaves the firm, they are probably leaving your company-supplied life insurance behind. Employees should look into purchasing insurance within their control.
Company stock purchase plans. This can be a great benefit. An employee might be able to put a certain amount of money aside and have it invested in the firm's stock, often at a discount. If there is no designated holding period, they could sell the stock once it's transferred to them, getting an almost immediate return equivalent to the discount. If that was 10% or 15%, it's an attractive benefit.
Matching charitable contributions. Many firms encourage employees to give back to the community. There may be a program where the employee's gift is matched dollar for dollar up to a specified annual threshold. When people are solicited for charitable contributions, the form often asks "Does your firm have a matching gift program?"
The firm's charitable foundation. Many firms have another way of giving back to the community. They have foundations awarding grants on an annual basis. Having company employees involved as volunteers is a compelling reason for the firm to provide the organization some additional support. The foundation likely produces an annual report. Seeing the types of organizations where they have already awarded grants gives an idea what types of local groups they support.
Vacation days. The employee's job often comes with a specified number of annual vacation days. These might increase over the period of several years. Are employees required to take time off? For years the banking industry operated under a similar rule. Does your company let vacation days be carried over from one year to another or is there a "use it or lose it" policy?
Corporate travel discounts. Your firm might have a large travel budget, qualifying employees for special rates at certain hotel chains when traveling on business. Are these discounts also available to employees for leisure travel? How do they access them?
It's important for employees to fully understand their benefits. It's part of their overall compensation.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, "Captivating the Wealthy Investor" can be found on Amazon.
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Bryce Sanders
Bryce Sanders, president of Perceptive Business Solutions Inc., has provided training for the financial services industry on high-net-worth client acquisition since 2001. He trains financial professionals on how to identify prospects within the wealthiest 2%-5% of their market, where to meet and socialize with them, how to talk with wealthy people and develop personal relationships, and how to transform wealthy friends into clients. Bryce spent 14 years with a major financial services firm as a successful financial advisor, two years as a district sales manager and four years as a home office manager. He developed personal relationships within the HNW community through his past involvement as a Trustee of the James A. Michener Art Museum, Board of Associates for the Bucks County Chapter of the Fox Chase Cancer Center, Board of Trustees for Stevens Institute of Technology and as a church lector. Bryce has been published in American City Business Journals, Barrons, InsuranceNewsNet, BenefitsPro, The Register, MDRT Round the Table, MDRT Blog, accountingweb.com, Advisorpedia and Horsesmouth.com. In Canada, his articles have appeared in Wealth Professional. He is the author of the book “Captivating the Wealthy Investor.”
