For many employees, benefits and additional fringe benefits are some of the most critical factors in choosing where they work. Trends in employee compensation have highlighted the fact that people will often trade off on higher wages for better benefits. Today, employers need to offer alternative benefits—what used to be called fringe benefits—if they want to attract and retain the best people.

The alternative benefit menu can include flex scheduling and staggered hours, telecommuting, health and wellness offerings (as an alternative benefit, insurance programs can be customized to meet individual needs), and a variety of other fringe benefits alternatives. Each additional benefit may be viewed as added value by employees.

Unlike regular benefits, alternative benefits are perks that make employees feel like they’re being rewarded. To do that, you need to offer the best alternative package to meet your employees’ needs and expectations. Whatever your business, fringe benefit analysis can help you pinpoint which alternative benefit packages you should offer. Done properly, adding alternative benefits can help you to:

1. Boost morale and productivity among your staff (an important additional benefit for business growth)
2. Save time and money by retaining employees with creative fringe benefits
   
3. Give employees additional input and a stronger sense of buy-in

Action Steps
The best contacts and resources to help you get it done

Decide on alternative benefit policies according to your needs

What does your company need in the way of alternative benefits? Insurance flexibility? On-site day care? Make sure you choose benefits that your employees will make use of.

I recommend: The IRS offers information on taxable versus nontaxable alternative benefits for certain businesses. Organizations such as AON Consulting Services, Hewitt Associates, and Mercer can be valuable resources.

Find out what alternative benefits your peers are offering

If you want to remain competitive in your field, find out what kinds of benefits similar companies in your area are providing to employees. You may find that a useful guide when trying to determine what benefits you'd like to offer.

I recommend: The U.S. Bureau of Labor Statistics provides information broken down by states and regions on employee benefits. The Employee Benefits Research Institute offers comprehensive information about benefits and what companies are offering.

Seek professional business fringe benefit analysis for additional guidance

Turn to professional alternative benefit administrators for guidance in helping you choose and provide additional benefits. They can help you create alternative benefit policies and provide you with information on such areas as the latest trends in employee compensation.

I recommend: A good starting point is the National Association of Alternative Benefit Consultants, whose members provide knowledgeable advice and information about alternative benefits. The National Association of Professional Employer Organizations (NAPEO) is another useful source for information.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Find out from your employees what kinds of fringe benefits and fringe benefits alternatives they want -- there is no use offering an additional benefit that nobody wants, and that won't motivate them.
• •  When you provide additional benefits, quality is more important than quantity, so don't go overboard by offering every fringe benefit you can think of.
• •  Stay within your budget so that each alternative benefit is cost-effective -- the worst thing you can do to employee morale is to offer benefits and then take them away. Even if they didn't use the benefit, the fact that it's no longer available will have a negative impact.