It’s free money! Employers need to showcase their 'complete' benefits package

Employees often think of their pay as the money they take home after taxes come out of their paycheck. When a competitor offers more money, they often pay attention. Do your employees know how much more money you hand over to them/? We are not talking about the cost of benefits –  we are talking about payments in cash they can actually see.

1. 401(k) matching contributions. This is the most obvious benefit. The employee contributes pre-tax dollars to their workplace based retirement plan. According to Fidelity, a common match is dollar to dollar up to 3% of the employee’s salary, then 50 cents per dollar for the next 2%. This means the match is capped, but is a substantial dollar amount. If the employee earns $100,000, a 3% match is $3,000. It often has a vesting schedule.
2. Tuition reimbursement. Many companies offer to pay for college courses you take in your spare time. The maximum the IRS allows companies to cover is $5,250.
3. Student loan repayment. Nor every employee wants to study towards a college degree. Many have already earned one. The downside to this achievement is carrying student loan debt. The government allows companies to provide up to $5,250 in relief for paying down student loans. Notice the amount is the same as the tuition reimbursement number. This is an either/or benefit. Employees cannot collect it twice.
4. Employee stock purchase plan. Many companies allow employees to purchase stock in their employer’s company at a discount to market value. The discount might be as high as 10% to 15%. The IRS has set an annual limit of $25,000 in pre-discounted stock. Depending on the plan, you might be able to invest 1% to 15% of your paycheck. In most cases you can sell anytime. An employee earning $100,000 and allowed to invest up to 10% of their paycheck and getting a 10% discount might be investing $10,000 annually, buying $11,111 in stock and getting a $1,111 profit, assuming they sold immediately.
5. Taxi home when working late. Employees often work longer hours. They might (or might not) be paid overtime. Some companies provide a ride home as a benefit, keeping employees off public transportation late at night.
6. Employee discounts. Does your company manufacture a product used by the general public/? Do you own a chain of retail stores? Many companies offer employee discounts.
7. Charitable contribution match. Many Americans donate to charity: 65% of Fortune 500 companies have matching gift programs. Some firms offer a program that will match an employee’s gift to a nonprofit. Most matches are dollar for dollar up to a threshold. Some companies match at a greater ratio. Let us assume an employee contributes $1,000 to a charity and gets a $1,000 match.

How much might an employee earning $100,000 in salary benefit from these additional programs? Perhaps $10,250:

 $3,000        Retirement plan match

 $5,250        Tuition reimbursement

 $1,000        Employee stock purchase plan

 $1,000        Charitable contribution match

_______________________________________________

 $10,250    Total employer contributions       

Taxi home and employee discounts would vary depending on the situation.

Related: Financial wellness is the next benefits boom for employers

Your employees are getting more than their base salary. Are they aware? Are they leaving money on the table? How can you get this point across to them? Do you hold an annual meeting where awards are presented? Do you have a “state of the firm” meeting of all employees? How about Employee Appreciation Day? These could all be good venues to showcase their complete compensation package. It might even work on Bring Your Family to Work Day. You let your employees know they are appreciated, then go into detail of the many ways you and the firm show its appreciation through benefits. This listing of benefits could also be made available online for review afterwards. This would be a good opportunity to tie into recruiting. Do the friends of your employees doing similar jobs have comparable benefits? The compensation they receive is more than the number on your paycheck.

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” is available on Amazon.