While keeping tabs on benefits-related costs is a top priority for all small businesses, minority- and women-owned small businesses are more likely to have defined objectives in place around their benefits strategy. Seventy percent of minority- and women-owned small businesses aim to increase employee benefits education compared to 58 percent of all small businesses sampled. They are also more likely to have objectives around offering flexible hours and telecommuting (69 percent compared to 58 percent) and expanding their mental health resources (72 percent compared to 56 percent).
Moreover, minority- and women-owned small businesses take more responsibility when it comes to helping their employees select their benefits. More than three in four minority-and women-owned business owners prioritize helping their employees to make better benefits decisions. And enhanced resources and greater communication during benefits enrollment is in demand: two in three workers want more targeted personalized benefits communication.2
Notably, minority- and women-owned small businesses are nearly 20 percent more likely to have a strategy around offering voluntary benefits than all small firms (71 percent compared to 52 percent). These firms offer critical illness and accident insurance15 percent more than other small businesses. Moreover, minority- and women-owned firms were significantly more likely to offer hospital indemnity, life insurance, and long-term disability benefits.
And the benefit to having a voluntary benefits plan in place is clear: employees with a voluntary benefits strategy report higher benefits participation than average.3
Minority- and women-owned small businesses are more likely to utilize employee benefits technology platforms and have fully integrated systems across human resources and benefits. Three in four minority- and women-owned small businesses increased their spending on human resources technology within the past three years. More than two in five (41 percent) of these businesses also work with a Professional Employer Organization (PEO), allowing them to access a wider range of benefits and services at a more affordable price than would be traditionally offered to firms of their size. Many of these strong technology investments are tied to the fact that most (84 percent) of minority- and women-owned firms have only been in business for five to nine years.
Minority- and women-owned businesses are well-positioned to appreciate the role that benefits play in overall financial well-being. Women are more likely to emphasize the role of their benefits in their financial health, with 42 percent reporting that they would face financial hardship without the benefits they receive through work. Black Americans report higher instances of living paycheck to paycheck than white Americans (39 percent versus 27 percent). These notable differences may influence the value placed on benefits as part of the large picture around financial health.
Learn more about the trends and strategies that small businesses are adopting today in our report Inflection Point: How small businesses are emerging from COVID-19.
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