You’ve developed the value proposition. You’ve put in the hours. You’ve landed the clients. You’ve even hired the key personnel. And now you’re growing. Congratulations — growth is a good problem to have! But while growth is good, there are some challenges that come along with it.
Many small business growth challenges relate to the financials: growing revenue, increasing profit and managing cash flow top the list. Others relate to employee benefits, namely health care. And right at the top is hiring new employees.1
Businesses generally must provide certain benefits: Workers compensation, unemployment insurance, Social Security, and family and medical leave, depending on the number of employees.2 Whether you offer the full menu of benefits or the bare minimum, you may want to consider additional benefits to attract the best talent and keep your business growing.
Hiring new employees
Fifty percent of small businesses cite hiring new employees as a significant concern.2 Of course, a small business runs on talent. And offering employee benefits is a good way to attract and retain top-notch people — something that’s especially important in taking your business to the next level. Why’s that? Fifty-seven percent of people report that benefits are a major factor when taking a job.3 As for existing employees, 79 percent say they’d select benefits instead of a raise.4 Further, only 3 in 10 small business workers are highly satisfied with their employee benefits package as compared with nearly 5 in 10 who work for larger firms.5
Offering workplace benefits
When you were starting out, you may not have offered benefits at all, or you may have offered discounted plans for employee purchase. Now that you’re growing, you may consider offering or subsidizing your employees’ benefits. There are many supplemental benefits like medical coverage, that can be crucial for attracting top talent as you grow your business. This often consists of retirement packages, disability insurance, life insurance, and dental and vision insurance. A well-rounded benefits menu can help attract and retain top talent.
- Retirement plans help your employees save for their retirement. This is important because Social Security only pays an average monthly benefit of $1,400.6 In addition, you also benefit by participating yourself, through a tax credit, for costs associated with starting a 401(k), SIMPLE, or Simplified Employee Pension (SEP) plan.
- Disability insurance is another attractive benefit for the employee because it helps protect a portion, typically 40 to 60 percent, of an employee’s income if he or she is unable to work due to an accident or illness. Consider offering supplemental disability insurance to cover even more of your employees’ income, often for an extra cost to them.
- Life insurance is an important benefit you can offer to talent. If employees pass away, term life insurance provides their beneficiaries with a cash benefit, while permanent life insurance lets employees build cash value (in addition to the cash benefit) that can be used during their lifetimes.
- Dental and vision insurance are often a complement to health insurance and round out a strong benefits package to attract employees. By providing such insurance benefits, you can differentiate yourself from competitors, while helping employees save money on costly services.
The extras that can add up
While offerings like life and disability insurance can be significant steps in professionalizing your business and attracting and retaining employees, they may not cover all the costs associated with accidents or major illness. With nearly half of small business workers indicating that they participate in a high deductible health plan ($1,300 individual deductible or $2,600 family),7 employers growing their businesses can consider offering supplemental insurance benefits that, depending on your plan, could help cover certain critical illnesses, cancers, accidents, and hospital stays. You can choose to subsidize these insurance benefits yourself, or offer them as voluntary benefits, meaning your employees pay for them if they opt in.
Surprisingly, only half of all small business workers surveyed believe they receive adequate information to help them understand how their benefits programs work compared with nearly two-thirds of those working for larger firms.8 When offering benefits, don’t forget to make sure your employees are aware of their full package and enrollment options.
To find out more about offering these benefits to employees — and taking steps to attract the best talent — speak with one of our specialists who can help.