Selective Benefits as a Hiring Tool

For every business, from large corporations to family owned small businesses, hiring and retaining high performing employees is turning into a bidding war. Experienced and efficient hires are often wooed by competing businesses and offered extra benefits. How can you stay one step ahead of the competition, offer a perfect combination of additional benefits and at the same time steer clear of discrimination rules which forbid you to restrict certain perks to specific employees?

There are certain selective benefits which do not go against the IRS discrimination rules. Using a judicious sampling of these benefits will help you stand out from your competitors and attract quality individuals. Before we get to the selective benefits, let’s take note of the expected benefits which employees look for when evaluating a prospective employer. These would include health insurance, qualified plan, vacation, a flexible schedule and positive work environment.

Split Dollar Arrangements:

An innovative form of permanent life insurance for employees, where the employer offers to pay the premiums for certain employees. The employee gets some solid and additional life insurance cover, while the employer is assured of being paid back any premiums paid by the business, or the cash surrender value of the policy. In effect, the business pays the premiums and gets back the money while the employee is provide cover for the period of the policy. This is a win-win arrangement which you can offer to selected employees.

Executive Bonus Plans:

These bonus plans can be used to provide an additional bonus to selected employees, who can use the bonus to pay premiums for life insurance policies wholly owned by the employee. Amounts spent on executive bonus plans are tax deductible for employers.

Disability Income Insurance:

Other than life insurance, one of the major concerns for employees is how to maintain their lifestyle and provide for the family in the event of a crippling or long term disability. Group disability plans are either insufficient or do not cover extended periods. Offering a comprehensive and long term disability insurance cover to selected employees is an effective tool which assures employees of a secure future.

Voluntary Benefits:

These are benefits funded entirely by employee payrolls. Employers can offer a choice of additional group benefits which the employee can choose to take part in, such as dental and disability insurance. This allows prospective employees a chance to work out the possible benefit plans they could be a part of and select the ones which fit their needs. Group plans being vastly more affordable than individual plans which offer similar cover, employees stand to gain a lot if they are given access to these benefits by the employer. For the employer, these benefits are at worst an additional administrative effort, and at best, a highly flexible and effective way of hiring and retaining prized and key employees by offering selective benefits.