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Recruiting and retaining talent isn't always about paying premium
salaries. Sometimes, intangibles address specific needs important to members of
your staff.
How can any ISP owner hope to compete when the number of workers available in
today's marketplace are ever-dwindling ? How can anyone afford the unprecedented
compensation packages being offered today? Or, more importantly, how can your
ISP operation retain essential workers that are are a big part of its success
and still afford to recruit new talent to help your ISP continue to grow?
Surprisingly, survey after survey shows that it is not money alone that
attracts new workers and keeps existing employees on the job?it's the benefits.
Sure bet benies
While stock options and big
salaries may be needed to lure high-level executives, the average ISP owner can
get good mileage out of some inexpensive perks. A few common benefits that
consistently get high marks from employees are:
- Flex-time scheduling.
- Company discounts.
- Free food and free beverages.
- Casual dress Fridays?or full time.
- Education or personal development training?on or after company time.
Notice that among the perks most often chosen by employees only one
program?education or personal development?actually costs the employer a dime.
Even with educational benefits, our current tax rules step in to provide a
helping hand.
Peripheral benefits
When education is offered
as a fringe benefit by an ISP business, the payments received by an employee for
tuition, fees, books, supplies, etc., under the employer's educational
assistance program may be excluded from the employee's income up to $5,250 each
year. Although the courses covered by the plan need not be job related, courses
involving sports, games or hobbies may be covered only if they involve the
employee's business or are required as part of a degree program.
And best of all, the ISP business may claim a full tax deduction for the
amounts paid. Drawbacks include the necessity of a formal tuition reimbursement
plan and, obviously, sufficient cash flow to fund that program.
Benefit benedictions
While each employee
has different needs, the recent trend points toward health insurance as the most
important and highly valued benefit for employees.
Health insurance is tax-deductible to the employer and tax-free for the
employee. What's more, an ISP business can frequently purchase it at a lower
cost than the employee would ordinarily pay for an individual policy.
Some ISP operators have discovered that, especially if they employ a lot of
part timers, health benefits may not be that important because the employee is
getting health benefits from another source. Whether its from another full-time
job, through a spouse's employer or through a parent's health insurance,
insurance is not a factor in the employees decision to work for you.
When it comes to benefits for part-time help, a smart ISP operator should
consider focusing on offering other, less expensive benefits, that would still
be considered valuable by employees. Or, you may find that employees would
prefer more cash compensation rather than any particular benefit package.
Keep in mind, however, that cash paid in lieu of fringe benefits remain a
legitimate, tax deductible business expense for the ISP operation, the employee
is going to have to include the amount in his or her income and pay taxes on it.
This illustrates the often-overlooked value of fringe benefits programs
offered by employers. In addition to the ISP operation's tax deduction for the
expense of providing fringe benefits, those benefits are usually tax free to the
recipient.
Caution, cheap could cost you
Bonuses and
awards must, as mentioned, be included in an employee's taxable income. Should
the bonus or award be in the form of goods or services, employees must include
the fair market value of the goods or services in their income. The same applies
to holiday gifts.
However, employees who receive turkeys, hams or other similar items of
nominal value from their employers at Christmas or other holidays may exclude
the value of the gift from their income.
On a similar note, so-called de minimis benefits may worth little or
nothing in the eyes of our lawmakers, but can go a long way toward making an
employee happy?without an accompanying bill.
De minimis fringe benefits mean any property or service that is so
small in value that accounting for it is unreasonable or administratively
impractical. Examples of de minimis fringe benefits include:
- Occasional meal money or local transportation fare
- Occasional personal use of an employer's copy machine
- Coffee, doughnuts and soft drinks, or even local telephone calls
The bottom line
After you have decided which
benefits you want for yourself and calculate in what your employees would
prefer, figure out which benefits your ISP business can really afford. Wouldn't
it be ironic in this day and age if the benefit package you build for you ISP
turns out to be the ones that cost your operation the least?
Securing a Small Business Loan by Mark E. Battersby
5 Stupid Things ISPs Do to Screw Up Their AUPs by Rachel Luxemburg
Management 101: Creating Structures by Jason Zigmont
Protect Your ISP With A Strong AUP by Christopher Knight
Self-Rental, a Tax Strategy by Mark E. Battersby
Tax-Saving Tax Strategies by Mark E. Battersby
Extremely Affordable Worker Magnets by Mark E. Battersby
Reward Yourself With Fringe Benefits by Mark E. Battersby
Turn Your ISPs Business Losses into Tax Benefits by Mark E. Battersby
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