Have you heard of the fringe benefits? Do you know how they help in motivating and engaging employees? Then this post is absolute personalized to you. Before delving deep into the world for fringe benefits, let us have a look upon the common definition of these benefits.
The additional benefits above the compensations, salaries, or wages given to employees or workers are considered as Fringe Benefits.
Significance of Fringe Benefits
Employee management is certainly one of the most important parts of running a company. You need to constantly motivate your employees so that they can serve your company in the best way and always remain loyal to the company too.
But how are you going to do that in the first place?
Being a company owner, your employees are the most important part of the organization that you own.
Taking care of their needs and requirements and then providing them with some benefits from time to time is the best way to make sure that they are satisfied with what they are getting at your company.
So, with the help of fringe benefits, you will be able to achieve that goal very easily. It helps in creating better public perceptions, employee engagement, and employee wellness.
Here, we are providing a detailed explanation of fringe benefits and how these will help in retaining your employees from time to time.
What Are Fringe Benefits?
It is important for people to know more about fringe benefits because, with the help of these, they can make sure that their employees are all happy with the services that they are getting right here.
To define fringe benefits, it can be said that these are basically the additions or the compensation extras that the companies would provide to the employees to give them a boost from time to time.
In some cases, the fringe benefits are provided to all the employees of the company, and then there are some cases where only the executive level people would always get the benefits and not the whole company.
There are also some other kinds of benefits that are provided to the employees in order to compensate for the costs that they had to bear for their work.
Apart from that, fringe benefits are also provided to the employees in order to ensure that they are completely satisfied with the work that they are doing.
Hence, it can be said without any doubts that fringe benefits are some of the most important tools which can be used to recruit and motivate the employees and also retain the ones which have a high quality of work and can be a benefit to the company.
How Do Fringe Benefits Work?
There are many different types of fringe benefits that might be provided to the employees of a company, and these benefits would be varying from one particular company to the other one.
That is because the employer has got the choice here to see what type of fringe benefits should be provided to the employees during a particular period of time. There are even some instances where the employees will be able to make a selection of the fringe benefit that they want to have when they are recruited for a particular company.
Now the fringe benefits could be anything from the choice of the company car to the all year gym membership, which is also provided to some of the employees. There is also some sort of financial or educational assistance that they get.
#1. Employees feel more comfortable and stay more dedicated
So, in a nutshell, it can be said that the employees are provided with all these options to ensure their comfort in the position which they have in a particular company.
In the case of the retail business, the employers would provide their workers with some discounts and other cost-related services as well.
The main goal of the benefits is to make sure that these employees are always comfortable while they are working for the company. But then the fringe benefits also provide a way for the company to stand out to their potential employees and have more and more honest and loyal workers in the team.
#2. Fringe Benefits ensure better employee retention
These are pretty competitive times that we live in, and the market is growing increasingly competitive as well.
So, the employers are currently facing some sort of troubles when it comes to retaining the employees just on the basis of their salary. So, in a way, the fringe benefits would act as the compensation that the company would provide in order to have better results in case of their employees.
#3. Your loyal Talent pool will empower your business to Beat Competitors
Hence, it is pretty essential for a company to provide proper importance to the benefits of these compensations and additional bonuses that the employees would get.
If you are providing some unique benefits to the employees, then you will truly be helping your company in getting ahead of the competition from the next company out there.
There will be more chances where you can attract potential employees with these fringe benefits, and then you will have more talent when compared to the other companies.
Now, who wouldn’t want to try it out, right?
Some Common Examples Of Fringe Benefits
There are so many different employers in public and the private sectors these days that are providing these benefits to the employees other than just their salaries. These are the additional perks that people can get as compensation for the efforts that they are making for the company success.
These might not come under the taxable income of the employee, but these are pretty beneficial for sure. To be honest, there are many different fringe benefits that exist in the industry that naming all of them and providing a description to each and every single one of them will be a pretty long stretch.
However, we are going to do our best in describing some of them so that you can have an idea of the point that we are trying to make it here. So, these are some of the very common examples of the fringe benefits that are provided by the company to the employees out there.
#1. Insurance Coverage
One of the most common forms of fringe benefits that are provided by the company to the employees is the insurance coverage that they need. The employers generally provide about $50000 for the life insurance and some other long term as well as the short term disability coverage as well.
There are also some benefits of health insurance which are provided by the company too. The employers would have to share the premium costs in order to make sure that these insurances are all properly covered in the best way.
#2. Education Assistance
This is another one of the common examples of the fringe benefits, and it is the educational assistance for the employees or basically the reimbursement for the tuition.
Also, the college fees reimbursements are a part of the benefits that are provided in case of the advanced degree that they want to have in case of educational purposes. This is in order to make sure that the employees are able to work in flexible schedules in the company without any troubles.
#3. Fitness Assistance
In case of the larger employers out there that have better space and surroundings, providing fitness centers to the employees is one of the biggest benefits that they can provide. There is also some other financial assistance that the employers can provide to the people so that their financial burdens can be decreased a bit.
#4. Cafeteria and Meal Plans
Discounted cafeteria plans and meal plans are also some other fringe benefits which are provided to the employees in the first place.
There are many employers who recognize the fact that these costs of dinners and lunches when the employers are late can actually add up to the cost for sure. So, these meals are often provided to the employees for free, and there is no additional charge that is provided to them for sure.
#5. Dependent Assistance
When it comes to childcare assistance benefits that are offered to the people out from the employers, it is done so that the people having children can work full-time.
There are many instances when people with children often tend to have some sort of scheduling conflicts within, and that is because of the high price of daycare assistance.
So, in such cases, the larger employers often tend to provide some free services at the daycare for the workers who have children. There are often some special discounts which are offered to the people as well.
So, for those who are looking for some sort of assistance on the financial side with daycare, there are many companies that offer fringe benefits.
#6. Retirement Plan Assistance
Another one of the common examples of fringe benefits is the employer’s contributions that they have in the retirement plan. There are many companies that tend to offer the matches for the paycheck deferrals to the retirement plans of people. So, this can be another one of the benefits that they can get from the people.
Fringe Benefits essential as per the Law
There are some of the fringe benefits that are essential as per the law, and employers need to offer those to their employees. Let us have a look at those as well-
- Health Insurance- Patient Protection and Affordable Care Act
- Unemployment insurance- Federal Unemployment Tax Act (FUTA)
- Medical leave- Businesses with 50+ employees need to provide medical and family leave
- Worker’s Compensation- As per the Department of Labor, federal workers deserve compensation benefits if they get injured or acquired any disease while working
Fringe Benefits excluded from Income Taxes
- Commuting benefits
- Accident and health benefits
- De minimis (minimal) benefits
- Achievement awards
- No-additional-cost services
- Educational assistance
- Retirement planning services
- Adoption assistance
- Employee stock options
- Athletic facilities
- Dependent care assistance
- Lodgings on business premises
- Health savings accounts (HSA)
- Employee discounts
- Working conditions benefits
- Group-term life insurance coverage
- Employer-provided cell phones
- Tuition reduction, etc.
Employee benefits are clearly very important tools that the businesses these days use in order to provide the people with more and more benefits.
Hence, it is important for the employers to have an idea about the benefits that they can offer to the employees so that they can dedicate their entire time and dedication to the company in the best way.
What employee benefits do you consider the most motivational and important ones for the employees? Share with us in the comments below.