How To Use Fringe Benefits To Motivate Employees
Some jobs come with a few perks or freebies that are unrelated to employee salary. These perks or bonuses other than employee salary are known as fringe benefits. This is great when you need more commitment from your employees, seek ways to keep the best talent in your service or simply to make your business more attractive to potential employees. Here is everything you need to know about fringe benefits.
What are fringe benefits?
They are extra compensations that are not monetary, which an employer provides to employees. Salaries, bonuses, and all other forms of cash compensations are not included. Fringe benefits save employees a couple of expenses and make the job more comfortable for them. While some fringe benefits are not included in the employee's taxable income, quite a number of them are considered taxable as per IRS standards. The exempt status of fringe benefits can differ based on various factors such as the nature of the benefit, its value, and the employee's salary. There are, however, those benefits that are a legal requirement and those that are optional. The whole idea about offering fringe benefits is to increase overall job satisfaction, motivate and engage workers.The Importance of Fringe Benefits
In terms of fringe benefits, businesses may and ought to be inventive. After all, they can begin to actually compete in order to establish themselves as a desirable employer when they pay attention to their employees' needs and provide them with benefits that are important to them. Because these benefits are optional, employees (and potential hires) take attention.Consider fringe benefits to be significant instruments that firms can use to attract and retain the best personnel.Are supplemental benefits becoming more popular?
Employers understand the true worth of talent in today's environment, whether we are in the midst of or after the "Great Resignation." Top performers, leaders, and employees have never been more vital.Furthermore, it has never been more difficult to recruit and retain them, which is why fringe benefits are so vital. They are important because top talent seeks more than an interesting role and a good salary. Professionals today expect benefits to support "the full person."This became very apparent throughout the Covid-19 epidemic. According to a recent survey of hundreds of UK business leaders, nearly half (46%) claim their businesses have added additional perks as a result of the crisis.According to this survey, the most popular fringe benefits are:- Work-from-home options
- Wellness assistance
- Plan de pension/retraite
How fringe benefits work?
In today’s competitive business space, it can be incredibly difficult to retain top employees with basic salaries. That’s where fringe benefits become relevant. Even though they are designed to make workers more comfortable on the job, they also serve a company’s reputation. They help companies stand out for providing the most perks for their employees. It increases a company’s chance of attracting highly skilled and talented workers from competing businesses.The types of fringe benefits provided to workers differ from one employer to the other as employers are at liberty to choose what types of benefits to offer. Likewise, in some companies, the employee gets to choose his/her preferred benefit from available options. Options like a free gym membership, free yoga class, a company car, tuition reimbursement, child care, company cafeteria, etc.Types of fringe benefits
Two major classes of fringe benefits exist. Some perks are a legal requirement while others are optional.1. Fringe benefits that are legally required
Employers must provide health care, cushion economic hardships, and provide retirement sustenance. Examples of compulsory fringe benefits include the following:Medical insurance
Medical insurance is covered by the Patient Protection and Affordable Care Act. It states that companies with more than fifty people should provide healthcare plans. And workers should have health insurance coverage. The healthcare insurance plans cover access to primary care physicians, emergency care, and so on.Medical leave
Under the Family and Medical Leave Act (FMLA), businesses with more than 50 employees are required to provide up to 12 weeks of unpaid leave for certain medical situations for the employee or a member of the employee's immediate family. However, in many cases, this leave is not solely for 'medical leave' (as in sick leave) but can be for the birth and care of the newborn child of an employee, placement with the employee of a child for adoption or foster care, to care for an immediate family member (spouse, child, or parent) with a serious health condition, or to take medical leave when the employee is unable to work because of a serious health condition.2. Fringe benefits not legally required
These perks are left at the discretion of the employer. Some of them are taxable for the employer while some are not. Examples of optional benefits may include:- Retirement benefits
- Achievement awards
- Fitness and exercise facilities
- Health
- Life
- Employee discounts
- Elder and child care benefits
- Tuition reimbursement
- Education assistance
- Transport and commute benefits
- Paid leave or time off
- Paid vacations or holidays