In a world where large organizations have a team of recruiters to hand pick the perfect candidates, small businesses need to be strategic with the decisions they make to attract qualified talent. Evren Esen, director of SHRM’s survey programs, says, “While the competition for talented workers has heated up, there has been little change in base salaries. So HR has strategically turned to benefits to attract—and keep—skilled professionals.”
But, what specific benefits are candidates interested in? Understanding the connection between health benefits and employee recruitment is the first step in targeting prospective candidates, whether you own a company that employs 150, 50 or just five employees.
What Are FSA and HSA Plans?
Flexible spending accounts, otherwise known as FSAs or flexible spending arrangements, are employee benefits that allow your staff to be reimbursed for qualified expenses. One benefit to FSA plans is that no federal, state or employment income taxes are deducted from the employee’s contribution.
FSA plans can be used to offset medical or dependent care costs. For health FSA plans, pretax earnings can be used to pay for qualified medical expenses, such as copayments at the doctor’s office, prescriptions or the balance of a procedure, such as a root canal. Currently, the IRS allows an annual maximum deposit of $2,550 for FSA plans. In 2017, that amount will increase to $2,600.
Dependent-care FSA plans allow your employees to pay for childcare with pretax earnings. The account maximum remains at $2,500 annually for each individual employee. Married individuals can deposit up to $5,000 if a spouse has access to their own FSA through another employer.
Similar to FSA plans, a health savings account (HSA) is also a tax-advantaged employee benefit; however, this account only works in conjunction with high-deductible health plans (HDHP). If your business only provides health plans with a significant deductible, an HSA softens the initial shock some employees may feel when they hear that their annual individual deductible is $1,300, or the family’s is $2,600, or more!
According to the IRS, employees with individual HDHP plans are allowed to deposit up to $3,350 a year. Employees who enroll in an HDHP family plan have a deposit cap of $6,750 each year. Here’s what makes HSAs so irresistible. Unlike FSA plans, your employees’ HSA deposits roll over annually if not utilized, so they’ll always have access to the money in the future, even after retirement.
Health Benefits and Recruitment Needs
The Society for Human Resources Management’s (SHRM) 2016 Employee Job Satisfaction and Engagement Report reports that benefits were rated as the third most important factor of employee happiness. With the massive changes in health insurance over the past five years, candidates are beginning to expect the health insurance options available to them to be different from the plans of the past. HDHPs are becoming commonplace, especially in small businesses, but that doesn’t mean candidates aren’t hoping for more from the companies wooing them. Similarly, with the amount of out-of-pocket medical expenses your employees are spending on things such as prescriptions and copays, many candidates actively seek employers with HSA and FSA plans in their job search.
So, how can you leverage the power of your employee health benefits, and employee recruitment needs, especially when actively searching for new staff? Simple: make a big deal out of your benefit package from the very beginning. Whether you know it or not, prospective candidates are doing online searches on your business before applying. When they find your website, make sure your “careers” page details every coverage type available to them. Don’t say “competitive salary and generous benefits package” and leave it at that. Specifically note if your employees have access to an HSA, FSA and any other benefits. Then, promote your benefits again during any interviews. You’ve worked so hard to build a comprehensive benefits package, so go ahead and brag about it. It’ll resonate with potential new applicants and may lead to future star employees in your workforce.