This means that they will be saving money from their taxes at each paycheque and they will also save during tax season. Extra Cash In-Handįlex plans allow for employees to pay for their benefits prior to being taxed.
A traditional benefits plan does not allow for this type of choice, leading to most employees paying for a great amount more than they need. The first employee would be given the option of choosing a family plan and would likely avoid it, saving them money. For example, one employee may be single and not benefit from a family health plan but another employee may benefit greatly from a strong family plan. Control of Benefits and Expensesįlex plans give control to the employee that allows them to meet their own needs or their family needs. If the employees do not embrace the changes to their plan, the advantages mentioned above will not be seen by businesses.Įmployee Advantages 1. Businesses that take the time to explain the benefits to their employees will see a great acceptance rate for their plan, but those who simply implement the change without communicating why, may face some backlash from their employees. Employees need to have an understanding of why the plan is changing and how it will affect them. Making changes to a benefits plan is difficult enough for a business, in terms of time and money, but it also needs to be accepted by the employees. Also, a flex plan may also require some new technology to implement and keep track of your plan. The process of designing and implementing is time-consuming, which is costly for a business. Speak with your employees to see if your plan already meets their needs because changing plans will cost money and if it does not add extra value to your business, the return on investment may not exist. If your business already has a traditional benefits plan in place, there are some considerations to be made before adopting a flex plan. Your business will be able to save money through this process, showing that there are has tangible and intangible advantages to report. Additionally, these benefits are tax deductible. This control helps with budgeting at the end of the year and becomes a constant and expected expense for employers. Financial Controlįlex plans allow for the employer to set a spending limit for each month, which leads to the business understanding exactly how much they will be spending every year on their plan. Turnover is a major expense that employers want to avoid and employees will be far less likely to leave a business when they are having their needs met in a practical way that does not require much effort on their behalf. Once employers find top talent, flex plans can help keep the talent. Providing flex plans may be one way for employers to stand out amongst the competition and allow them to recruit top talent. Flexible benefits tend to be something that potential employees are looking for right now, as it allows them to have more control over the issues that they have in their lives. Recruitment and Retentionīusinesses, especially small businesses, need to find a way to stand out to potential employees and encourage them to join the business. Additionally, if an employee has their specific needs met, they will be healthier, which will reduce sick time calls. If an employer shows the effort to meet their employees’ needs, it can lead to greater productivity, improved employee morale, and reduced absenteeism. Each employee is not like the other and neither, are their needs both inside and outside of the workplace. With a diversity of employees comes a diversity of needs for employers to meet. Having a diverse workforce regarding culture, age and personality has advantages and is becoming the norm in the workplace.
As these plans do allow employees to have greater control, there are some advantages and disadvantages for both the employer and employee, which will be the focus of today’s blog.Įmployer Advantages 1. Knowing that all employees are different has led to a great deal of employers moving towards a flexible benefits plan.įlexible benefit plans, or flex plans, come in a variety of options, which allow the employee to have more control over their plan and, in turn, control their lives in a better way. Understanding that every employee is different and have different needs, using a benefits plan that blankets all employees may not be as effective as it used to be. Meeting the needs of employees is becoming one of the most important aspects of both small and large businesses. This was originally posted on Alongside's blog.