Once you have great employees on board, how do you keep them from jumping ship? One way is by offering a good benefits package.

Many small-business owners mistakenly believe they cannot afford to offer benefits. But while going without benefits may boost your bottom line in the short run, than penny-wise philosophy could strangle your business's chances for long-term prosperity.

Heading the list of must-have benefits is medical insurance, but many job applicants also demand a retirement plan, disability insurance and more. Don't offer them and you are at a hiring disadvantage. Offer the right benefits, however, and your business may just jump-start its growth.

Employees who are given benefits they value, will be more satisfied, miss fewer workdays, be less likely to jump ship (especially on short notice), have higher commitment to the company and its goals.  Basically, good benefits make employees happier, happier employees are more productive.

Benefit Basics

The law requires employers to provide employees with certain benefits. You must:

• Give employees time off to vote, serve on a jury and perform military service.
  
• Comply with all workers' compensation requirements.
• Withhold FICA taxes from employees' paychecks and pay your own portion of FICA taxes, providing employees with retirement and disability benefits.
• Pay state and federal unemployment taxes, thus providing benefits for unemployed workers.
• Contribute to state short-term disability programs in states where such programs exist.
• Comply with the Federal Family and Medical Leave (FMLA).

You are not required to provide:

• Retirement plans
• Financial education classes
• Executive bonus plans
• Health plans (except in some states)
  
• Dental or vision plans
• Life insurance plans
• Disability insurance plans
• Paid vacations, holidays or sick leave

Most companies, however, offer some or all of these benefits to stay competitive.

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