As businesses strive to stay on top, it’s important to be able to attract – and retain – a loyal and productive workforce. By some estimates, it costs more than twice an employee’s salary to find and train a replacement. On top of that, churn can damage morale in your workforce.1
A common strategy for maintaining an enthusiastic workforce is to offer better employee benefits. In a brand new study by Guardian, findings show that 74% of middle-income American workers depend on the workplace for most of their financial security.2 This category includes health care, retirement, and other financial and health benefits, such as life, disability, accident, critical illness, and cancer insurance. Moreover, four out of five employees say that employee benefits are the deciding factor when choosing whether to stay in place or leap to a new job.3 Traditionally, bigger companies have provided their employees with the most comprehensive benefits. A 2014 US Bureau of Labor Statistics report noted that 82% of workers at larger companies had access to retirement benefits, while only 50% of those at companies with 100 employees or less had access to similar benefits.4 Big companies also tend to spend more per worker. To stay competitive, look for the employee benefits plans for small businesses that workers are seeking and moreover, let your current employees know what you’re doing on their behalf.
Here are ten ways that small businesses can compete with bigger companies in the employee benefits arena:
- Learn what’s available now, and consider consolidating. You can find insurance carriers that package the kinds of benefits and services previously only available to larger firms. Some will also provide support for administration, enrollment, and employee education to explain the employee benefits options. Consider consolidating the number of providers of your benefits plans so that you can save on administrative costs while possibly being able to offer a broader benefits package.
- Better onboarding, enrollment, and education programs. Education has been shown to increase worker usage of the employee benefits plans that are available to them.5 This type of education could include better instruction at open enrollment, one-on-one visits, and more engaging support materials. Younger workers in particular may appreciate the ability to research their options and make choices online, following their own schedules.
- Wellness services and nurse hotlines. Generally offered by insurance companies and health care providers, nurse hotlines can save money for both you and your employees by enabling them to call a nurse before seeing a doctor. You can also raise awareness by adding wellness programs that include gym memberships, offering a discount to the employee for joining. Apart from perceived value, a healthier workforce can help cut the expenses related to employee absence.6
- Join forces. Smaller companies can band with others through trade organizations to offer more robust company benefits. You can also explore the employee benefits plans for small businesses marketplace, with the goal of offering employees more choice among the health plans they can select. Look up your state’s health benefit exchange online, or find a broker you trust, to explore the options.
- Offer flexible-spending accounts. Set up a Flexible Spending Account (FSA) that will enable employees to use pre-tax dollars to pay for their out-of-pocket health care costs, making the payment process not only more convenient, but also less costly due to the tax advantage.7
- Consider health-related insurance outside the norm. Employees value the concept that you’re interested in their total well-being and accordingly, they’ll value employee benefits such as health, dental, and vision insurance. Keep in mind that there are other less traditional kinds of financial protection such as critical illness, cancer, and accident insurance you can offer employees at little or no cost to you. Even if you can’t foot the bill, employees appreciate the option to purchase protection for themselves and their families.
- Simplify and automate savings plans for employees. If you’re offering retirement plans, set up payroll deductions so your employees can put the money aside more effectively. If you can afford to offer some percentage of matching contribution to their savings, they will not only save more, but there will also be a perceived alignment with their long term goals.8
- Look at self-funded health insurance. “Self funding” refers to when a company provides the financial backing for its own health insurance, rather than joining another health care provider’s plan. You can administer a plan using your own staff, or let other companies provide operational services. While formerly considered an option only suitable for firms with 1000 or more employees, the health benefits landscape has changed. Insurance products, generally known as stop-loss insurance, are now available to provide coverage for smaller employers who choose to self-insure. One advantage is that you may be able to target the specific health needs of your employee base. For example, a young workforce might not require senior-focused health care provisions, but might need stronger maternity coverage.
- Try perks beyond the usual. Look at offering employees a blend of financial benefits in combination with other quality of life considerations. Some of these you might be able to provide with relative ease, such as flexible scheduling, work-from-home options, or access to training and technology.
- Loop in your employees. Consider asking a cross-section of your workforce about what sort of employee benefits options and perks they would most value out of the choices you’re considering. When you’re deciding, think about how you’ll explain those benefits so that workers can get the most use out of them. Guardian’s Third Annual Workplace Benefits Study shows that six in 10 employees would like their employer to design benefits meetings by generation so that the information is more relevant. These would likely include a mix of in-person financial advice, online methods, and education adapted to the mobile phone.9
Knowing that 65% of employees believe benefits positively impact their overall financial security, make sure that what you’re offering will attract and hold the kind of employees you want.10