Employee retention rates are a common concern for many businesses, whether they are large or small. But for small businesses, employee retention is imperative because there may only be one person in each role. If an employee jumps ship, who will pick up the slack while the position is vacant?
While concerns about employee retention can sometimes end up on the back burner in the midst of the day-to-day hustle, it is an important part of business operations. Luckily, there are simple ways to keep workers happy (even when the budget seems stretched to the max). One of the things that has been proven to improve employee satisfaction is tax-free fringe benefits.
What are Fringe Benefits?
Fringe benefits are “perks” provided to employees of a company. Some examples given by the IRS are “cars and flights on aircraft that the employer provides, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events.”
Are All Fringe Benefits Tax-Free?
It is very important to note that not all fringe benefits are tax-free, but there is a large list that are. For small businesses, tax-free fringe benefits may include cell phones, dependant care assistance, contributions to health savings accounts (HSAs), meals delivered to the office, retirement planning services, or tuition reimbursement.
Why Do Fringe Benefits Strengthen Employee Retention?
Fringe benefits like education assistance strengthen your employee retention strategy because a worker feels loyal to a company that has invested in him or her. In a similar fashion, employees that receive child-care reimbursement feel as though their families are being supported, which makes them want to stay in their current role.
If you would like to learn more about offering fringe benefits in your small business, check out this FAQ page that outlines examples in further detail.
Fringe benefits can be an effective way to strengthen your employee retention strategy. It is important to read the list of tax-free benefits carefully to ensure that correctly implementing your benefits program.
What fringe benefits are you providing as part of your employee retention strategy? Let us know in the comments below!