Best Flexible Benefits to Offer Employees

Employees have little control over many aspects of their working life, so the best flexible benefits to offer them are ones they can tailor to their particular needs, desires and circumstances. A well-administered "cafeteria" program with benefits that appeal to employees can also benefit the employer both economically and in terms of goodwill. Incentives and bonuses are popular with workers and allow employers to reward top performers. But for some employees, work-life balance is the biggest benefit of all. Employers can foster this by offering flexible work schedules, extra time off and opportunities for job-sharing and telecommuting.

On the Cafeteria Menu

Cafeteria plans combine benefits required by law, like Social Security, unemployment and workers's compensation, plus those incorporated into company policy or labor agreements as well as optional benefits such as dental insurance, vision care, group-term life insurance, child care, and disability insurance. Plans that comply with IRS regulations are cost-effective because both employers and employees spend money for benefits out of pre-tax earnings and save on FICA payroll taxes. Employees may also save on state and federal income taxes. Flexible spending and health savings are two types of accounts that help employees budget their heathcare expenses.

New Contribution Limits for 2012

Tax-advantaged flexible spending accounts allow workers to automatically contribute a specific amount of each paycheck and use the money to pay for medical expenses that aren’t covered by insurance, like coinsurance, copay amounts and deductibles. Starting in 2012, plans must specify a maximum percentage of earnings or a maximum dollar amount a worker may deposit in the FSA. Health savings accounts are also popular with employees because these savings do not count as taxable income. Unused money from one year carries over to the next. New contribution limits for 2012 are $6,250 for a family and $3,100 for an individual.

Better Than Money

Flexible work topped the wish lists of employeesthe professional services company Pricewaterhouse Coopers polled for a 2010 survey in the United Kingdom. Of 1,167 participants, 47 percent said flexible working arrangements were the benefit they valued most. Performance-related bonuses placed a distant second at 19 percent. A good pension plan, favored by 15% of respondents, came in third. Other priorities were paid time off for social/humanitarian work, exposure to advanced networking/social activities, and paid training and development, favored by 7, 6 and 6 percent, respectively.

The recession has changed people's attitude toward work, said Michael Rendell, head of human resources at PwC. He observed, "Our survey indicates that employees may be feeling the pressure, with large numbers hoping for a better work-life balance in the future." 

Administering Work-Life Programs

The Big Seven public accounting firms have gone all out offering work-life balance as a perk to attract the best new talent. At one firm, employees propose the flexible schedule they want, and if management doesn't believe it will have a negative impact, it's approved. The same company offers a "flex year" option so workers can take off for several months and prorate their salary over the entire year.