Standing Out To Attract Talent
Top companies in the region dedicate substantial resources to their employees beyond base wages. Companies can strategically invest in these options to align with the specific talent they aim to attract.
The following 3 pages show the breakdown of benefits in Michigan.
Compensation Philosophy & Plan
A compensation philosophy formalizes a company’s approach to employee pay and benefits, outlining the reasons behind it. A well-designed compensation and benefits package offers companies the flexibility to align decisions with budgetary constraints and unique local market demands. Potential employees often consider benefits packages as a crucial factor when choosing an employer. Offering competitive benefits is key to attracting top talent to the company and retaining existing employees.
Return on Investment
Beyond offering competitive wages, a company’s investment in its employee benefits is another major budgetary consideration. The return on investment for providing quality benefits is significant. A defined compensation plan aids in talent attraction and retention by providing clarity on the company’s position in the labor market and commitment to competitive compensation packages. Competitive benefits packages reduce turnover and drive employee loyalty, which ultimately present a cost savings to the company.
Expert Insights: Total Rewards
State of Michigan Required Benefits
Winning Formula requires all of these benefits.
The Winning Formula
Companies who follow the formula below will have an increased chance at acquiring the best talent.
All of the Required benefits (pg 2)
Commonly Provided Benefits at GOOD level with a mix of 2-3 from BETTER/BEST (pg 3)
Provide 2-5 Talent Attractor Benefits at BETTER/BEST levels (pg 4)
Expert Insights: Total Rewards Commonly Provided Additional Benefits
Winning Formula suggests all GOOD with a mix of 2-3 from BETTER/BEST.
Group-Term Life (GTL)
Employer covers 100% of the associated premium costs for coverage of a flat dollar amount (avg. $25,000) or 1x the employee’s annual pay up to a flat dollar amount (avg. $50,000).
Employer covers 100% of the associated premium costs for coverage of 1x the employee’s annual pay up to a flat dollar amount (avg. $100,000) with the option for the employee to purchase additional voluntary coverage.
Employer covers 100% of the associated premium costs for coverage of at least 1x the employee’s annual pay (no limit) with the option for the employee to purchase additional voluntary coverage.
and vesting.
0%. These plans are typically voluntary.
Employer covers 100% of the associated costs. Note that the employer is only responsible for the disability insurance premiums; the actual disability benefit is paid by the carrier.
Employer covers 100% of the associated costs. Note that the employer is only responsible for the disability insurance premiums; the actual disability benefit is paid by the carrier.
$0. This plan is typically voluntary.
Employer contributes a flat dollar amount or a matching dollar amount, annually or per pay, up to a maximum dollar amount (avg. $600).
Employer contributes a flat dollar amount up to the maximum allowable under IRS ($4,150 single/ $8,300 family).
$0. This plan is typically voluntary.
Employer contributes a flat dollar amount (max $500) or a matching dollar amount up to a maximum dollar amount (avg. $1,000).
Employer contributes a flat dollar amount (max. $500) as well as a matching dollar-for-dollar amount up to the IRS maximum joint contribution ($3,200 for 2024).
$0. This plan is typically voluntary.
Employer contributes a matching dollar-for-dollar amount up to a maximum dollar amount (avg. $500).
Employer contributes a flat dollar amount and/or a matching dollar-for-dollar amount up to the IRS maximum joint contribution ($2,500 single/$5,000 family) for 2024.
Expert Insights: Total Rewards Talent Attractor Benefits
POWERED BY HR Collaborative
Winning Formula suggests 2-5 benefits at BETTER/BEST levels.
Up to two weeks of paid time off for birthing parents. Birthing parents may also be eligible for other forms of paid leave.
A typical bonus percentage for individual contributors would be between 2.5 and 7.5 percent of base pay. Incentives at this rate help increase the total employee compensation to be competitive with the midpoint (50th percentile) of the external labor market.
Observation of the six (6) major federal holidays: New Years Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas Day.
Up to four weeks of paid time off for birthing and non-birthing parents. Birthing parents may also be eligible for other forms of paid leave, which may run concurrent or in addition to parental leave.
A good bonus rate for individual contributors would be between 7 and 10 percent of base pay, increasing total compensation to be slightly ahead of the external labor market, typically between the 60th and 75th percentile.
Observation of the nine (9) most common federal holidays as well as select preceeding and following days (in addition to those in the “Good” section): Day after Thanksgiving, Christmas Eve, New Years Eve.
Is gaining popularity, but not offered by all employers. $0. This plan is typically voluntary.
Is gaining popularity, but not offered by all employers.
Paid 100% by employer, but usage/visit limits (avg. of 3 to 5 visits per service) apply before the employee is responsible for professional service fees.
Up to twelve weeks of paid time off for birthing and nonbirthing parents. Birthing parents may also be eligible for other forms of paid leave, which may run concurrent or in addition to parental leave.
A robust bonus percentage for individual contributors is 10 percent or more of the base pay, increasing the total compensation to lead the external labor market, typically at the 75th percentile or above.
Observation of the eleven (11) recognized federal holidays as well as select preceeding and following days with optional floating holidays (in addition to those in the” Better” section): MLK Day, Presidents’ Day, Juneteenth, Indigenous People’s Day (Columbus Day). Veteran’s Day.
Offered as a voluntary plan, but is offered through a group rate or discounted premium so it’s cheaper than if employees purchased the plan on their own. Some employers even offer to cover the cost with a stipend.
Paid 100% by employer, with unlimited usage.
Is gaining popularity, but not offered by all employers. If it is offered, it is voluntary and the premium is paid by the employee.
Included in the medical plan offering or paid for by the employer with reduced copays.
Included in the medical plan offering or paid for by the employer with $0 copay.
Is gaining popularity, but not offered by all employers.
Employer contributes a fixed ammount on an annual or per pay basis (avg. $600-1,000).
Employer contributes up to the maximum allowable under IRS ($2,100 for 2024).
The Winning Formula Recap
Now that you’ve had a rundown on all the benefits available to your employees, you can craft a recipe to acquire the best talent with the Winning Formula.
All of the Required benefits (pg 2) Commonly Provided Benefits at GOOD level with a mix of 2-3 from BETTER/BEST (pg 3) Provide 2-5 Talent Attractor Benefits at BETTER/BEST levels (pg 4)
We know that coming up with the total rewards package is unique to every company and navigating what is offered can be complex. We hope that this gives you a little more understanding of where to start and knowing you can access an expert to assist you with more information.
7 Essential Tips for Building The Best Benefit Plan for The Detroit Region
Offering comprehensive benefits not only boosts attractiveness, but also ensures competitiveness in attracting talent. These 7 essential market insights will help you to create the best benefit plan to be competitive in the Detroit Region.
62% of surveyed employers contribute at least 80% towards employee-only medical premiums, and 55% contribute between 78% and 80% for premiums covering employees and their dependents. Currently, only 55% of surveyed southeast Michigan employers are providing contributions towards an employee and their dependent(s)’ medical premiums. By extending this benefit, you position yourself more favorably for attracting top talent.
100% of surveyed companies provide dental and vision benefits access. To establish an organization as an employer of choice in the region, offering comprehensive dental and vision benefits is essential. By covering 70-80% of the premiums, a company will gain a significant competitive advantage in both attracting and retaining top talent.
By providing contributions towards Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRA), a company can distinguish itself from the majority of southeast Michigan employers (23% of surveyed companies currently offering). This serves as a genuine talent attraction benefit, setting a company apart. 1
5% of Michigan’s workforce identifies as LGBTQ+. 2 Ensure benefits have nondiscriminatory policies, such as including same-sex couples in healthcare, dependent care, and family planning benefit coverage.
Among America’s largest cities, Detroit has the highest percentage of singleparent households—nearly 72%. 4
Consider the benefit of structuring shift options, which allow for school or daycare drop-off or pickup. This has been anecdotally referenced by several major companies in the region to drastically increase the pool from which a company can recruit.
8% of the Detroit metropolitan area identifies as a religion other than Christian. 3 By offering floating holidays within this market, a company can demonstrate an inclusive culture that resonates with the diverse candidates they seek to attract. This simple gesture not only showcases a commitment to inclusivity, but also comes with minimal costs to an employer.
Different age groups have different benefit preferences, and certain groups may be willing to compromise in one benefit area for a higher salary. Companies that offer a flexible menu of benefits to accommodate these differences are most successful. For example, 71% of the current production workforce in the region is 35 or older; these workers may be focused more on family healthcare and retirement benefits than their younger counterparts in other industries.