1. We exist in a fragile post-pandemic environment where resignation rates are at record highs and employers must work harder than ever to attract and retain staff.
2. Non-mandatory health care benefits have virtually become the norm, are now provided by nearly 8 out of 10 US employers, and have taken on greater importance post-pandemic.
3. During the pandemic, home-working has become and continues to be one of the world’s most desired non-mandatory benefits amongst employees.
4. Non-mandatory benefits can be the difference between securing or losing top candidates.
Properly compensating employees was at one time all about the money. It’s changed now, we are in a world of total reward where salary, benefits, and even the working conditions, form part of the employer’s value proposition. Paid sick leave, paid vacations and health care benefits have virtually become the norm, being provided by nearly 8 out of 10 US employers.
Firms that fail to offer these kinds of benefits are falling behind the market curve and may begin to find it harder to attract talent due to an unappealing employer value proposition.
In fact, in this fragile post-pandemic environment where resignation rates are at record highs, (around 48 million US workers quit their jobs over the last 12 months), some optional benefits have assumed elevated importance:
As we exit the pandemic employers cannot afford to ignore their workforce’s desire for hybrid working. They must get the balance right between office and home-based working by developing a win-win hybrid working benefit in tune with the needs of the workforce.
Definition of Non-Mandatory Benefits
Quite simply, non-mandatory benefits are those employer perks that an employer chooses to offer voluntarily, and which are not required by law.
In the US, it is important to distinguish between federal and state law as while some benefits and payroll deductions may not be federally mandated, they may still be required under certain state laws.
The most prominent legally required benefits in the US include Social Care, Medicare, Federal Insurance Contributions (FICA). Additional federal or state mandated benefits include Unemployment Insurance, Worker’s Compensation Insurance, Health Insurance (under the Affordable Care Act), Family and Medical Leave Act protections and Disability Insurance.
Once legal obligations are met employers should focus on developing an attractive program of non-mandatory benefits to help position themselves as an employer of choice. For example, while it is not always compulsory to provide overtime pay or ‘comp time off‘, this can be part of demonstrating a company’s brand as an employer.
We’ve set out a list of some popular optional benefits so you can easily benchmark your own offering and highlight any strategic improvements needed to bring you up to a competitive level.
How can a global PEO help with non-mandatory benefits?
A global PEO hires international workers around the world on behalf of client companies. Many ambitious employers embark on international resourcing projects only to become beset by unnecessary hiring delays as they attempt to organize important benefits before candidates will sign on the dotted line. These frustrating and costly delays can be avoided by using a PEO, such as Horizons, who have the expertise and pre-existing commercial relationships to quickly hire international talent and ensure they have the appropriate mandatory and non-mandatory benefits for their jurisdiction from day one in any part of the world.
If you need help with an international resourcing project requiring a smooth benefits implementation in multiple international jurisdictions, please call us today.
Frequently Asked Questions (FAQ)
Mandatory benefits are those that employers are legally required to give to employees
Mandatory benefits must be provided to employees by law, while discretionary benefits are voluntary, and employers may choose whether to provide them.