Now is the Time to Grow Your Business with Employee Benefits

The construction industry has historically been one of the least likely to offer benefits to their employees. Tight margins for winning bids, employees preferring higher pay over benefits, seasonality, and high employee turnover all play a factor. So why is now the time to upgrade the benefits package you are offering your employees?

Health insurance and retirement plans are becoming a necessity

Under the Affordable Care Act, employers with 50 or more full-time employees (or the equivalent in part-time employees) must provide health insurance to 95% of their full-time employees or pay a penalty to the IRS.

Even for smaller businesses, the COVID-19 pandemic has brought forth the need for a high-quality health insurance plan. Employees are increasingly asking for these benefits or seeking out employers who offer superior health insurance benefits. New HRA products have also been made available to give employers additional options in how they provide health benefits to their employees and to help participants cover the cost of medical expenses.

Retirement plans are also starting to become mandated. More than 30 states have considered legislation for state mandated retirement plans, according to the National Association of Insurance and Financial Advisors. To date, California, Illinois, Oregon, Connecticut, Washington, and Massachusetts have enacted legislation establishing a state-run plan program, with more states passing legislation. These state mandated plans may be a good option for some, however, they are limited by investment options, contribution limits, and maximizing plans for owners and executives. Doing your research and partnering with a benefits expert can help you determine which plan is best for you and your employees.

It’s more affordable than you think

One reason that employers are often hesitant in offering employee benefits plans is the perceived cost. If your company is working on prevailing wage jobs, the fringe dollars can be used towards employee benefits, greatly reducing the cost to the company.

While offering matching contributions for a 401(k) plan are a great benefit, you are not required to make any contributions to the plan on behalf of your employees. Simply providing the plan gives your employees an easy option to save for retirement at no cost to the company. Your company does have the option of offering a company match on an annual basis. This can be arranged a few different ways, but generally requires the employees to contribute a percentage of their pay to the plan and then the company matches a portion of that. There are also added benefits to the owners of the company when offering an employee match as it allows the owners of the business to increase contributions to their own retirement account.

With any of these employee benefits programs, any costs that the company does incur can also be used to help reduce your tax liability. When meeting with your CPA and looking for ways to reduce your business taxes this can be a great strategy to meet that goal while also providing great benefits for your employees.

Stay ahead of the competition

Forecasters are predicting that the construction industry will continue to grow in the coming years. As this happens, the competition for hiring quality employees will also continue to grow. As you plan for the future, the benefits that you offer your employees could be a key element in how your company grows with the times.