Attract Top Talent to your Manufacturing Organization with these Popular Employee Benefits

The labor shortage in the manufacturing industry has been well documented. As of October 2021, the number of workers in the industry had declined by almost 400,000 from pre-pandemic levels. According to the National Association of Manufacturers, nearly 2.1 million manufacturing jobs could be open by 2030.

Will this worker shortage adversely affect your manufacturing organization, or has it already done so? You don’t have to sit by idly while the labor gap continues to grow. One way to attract more talent is by offering an impressive selection of employee benefits. Doing so can help you attract and retain top talent.

Enhance Your Employee Benefits Package

Compensation has always been the focus of any job offer, and that hasn’t changed. But increasingly, job seekers are focusing on employee benefits that may be available to them. This includes, but is not limited to:

Health insurance. The premiums paid by an employer under a health insurance plan are tax-free to employees — and deductible by the employer — if the plan is open to all eligible workers. Similarly, employer reimbursements for medical expenses are generally tax-free to employees as are contributions to Health Savings Accounts.

Qualified retirement plans. Like health insurance, this is a major employee benefit that often makes or breaks a job offer. Generally, the benefits provided under qualified plans, like a 401(k) plan, are currently exempt from tax and can grow without any tax erosion until withdrawals are made. Contributions are subject to generous annual limits, including potential matching contributions to a 401(k) plan by an employer. However, strict nondiscrimination requirements must be met.

Group-term life insurance. This is a prized perk for workers in the manufacturing field even though there’s a tax price attached to “excess” coverage. Only the first $50,000 of coverage under a group-term life insurance plan is tax-free. For instance, if a worker earning $80,000 is covered at three times his or her annual pay, the employee owes tax on $190,000 of coverage ($240,000 − $50,000). The tax, which is computed using an IRS table based on the insured’s age, is typically small.

Dependent care assistance plans. The first $5,000 of dependent care assistance paid by an employer under a written plan is tax-free to employees. To qualify, the dependent must be under age 13, physically or mentally unable to care for him- or herself, or a spouse who’s physically or mentally incapable of self-care. The amount of the exclusion can’t exceed the earned income of a single employee or the earned income of the lower-paid spouse if the employee is married.

Educational assistance plans. A company can provide tax-free payments of up to $5,250 annually for college or grad school tuition, books, fees, and supplies under an educational assistance plan. The courses covered under the plan don’t have to be related to the job.

Employee discounts. A manufacturing company can provide tax-free discounts to employees on its products. Note that the discount percentage can’t exceed the gross profit percentage of the price at which the product is offered to regular customers.

Employee Assistance Programs. Many organizations have started utilizing Employee Assistance Programs (EAP) to assist employees during their hardships either personally or professionally. If you are already offering medical insurance to your employees, you may want to check with your provider to see if adding an EAP is an option.

Gym membership. This is a great option to promote health and fitness in your organization. The organization can pay for employees’ gym memberships, pay for an online health and wellness service, or even provide an on-site gym at work. Many gyms offer corporate discounts to organizations, often the most popular option.

Extended parental leave. Family and Medical Leave Act provides eligible employees with up to 12 weeks of unpaid leave in a 12-month period. By offering paid parental leave, new parents can enjoy more time with their family without stressing over finances.

Free food and drinks. This is a wonderful way to offer healthy options to your employees throughout the day to keep them satisfied and focused. Offering this even once a week as a mid-week pick me up can let employees know you are thinking about them!

No stress zone. Between work stress and personal issues, having a clear and productive mindset can be difficult. Offering a place at work for employees to let go of some stress and relax can be a great perk for employees. The “no stress zone” could include games and activities such as a phone charging station, bookshelf, seating area, pool table, ping pong table, cornhole, board games, etc. Organizations show employees they value creativity and support a healthy work/life balance.

Build a Positive Corporate Culture

Last, but not least, strive to create a work environment that makes a positive first (and lasting) impression. Employees spend a lot of time on the job, and you want them to feel at ease among coworkers and supervisors alike. Project a positive attitude that will carry over to others. Conversely, a toxic workplace could lead to even more turnover and early retirements.

Contact VonLehman’s Human Resources Consulting Group at 800.887.0437 for guidance related to this topic.