Employee benefits are perks that workers receive in addition to their normal wages and salaries. They can contribute significantly to employees’ overall well-being, job satisfaction and productivity, all of which ultimately affect an employer’s bottom line. They also play a crucial role in attracting and retaining talented workers.
Although creating a benefits package may seem daunting for small businesses competing with larger organizations, these employers can remain competitive by understanding employee wants and needs and tailoring benefits plans to meet employee desires. Our Small Business Benefits Toolkit provides an introduction to the importance of employee benefits and includes best practices for assessing and choosing benefits.
An AICPA study found that 80% of Americans would choose a job with benefits over a job that offered 30% more salary with no benefits.
The Importance of Employee Benefits
A comprehensive, impactful benefits package shows employees that their employer values them, which can help increase motivation and job satisfaction. Depending on the benefits offered, such as health insurance and wellness programs, employees may also experience improved health, translating to fewer missed workdays, increased productivity and reduced stress. These benefits may contribute to a positive company culture and happier, more focused workers.
Workers who are satisfied with their benefits packages are less likely to search for positions at other companies. This improves employee retention and reduces turnover costs. In fact, a recent Forbes survey found that 40% of employers say employees leave their jobs to find better benefits. Thus, a robust benefits package may also help employers attract new job candidates.
It’s important to be aware that certain employee benefits are required at the local, state and federal levels. Small businesses should consult a legal professional to ensure compliance with benefits regulations.
Why Employee Benefits Are Crucial for Small Businesses
Small businesses often have limited resources and budgets compared to large enterprises. For this reason, small businesses may struggle to compete for talent with larger organizations that can offer higher salaries and wages. Fortunately for employers of small organizations, many Americans consider benefits as important as total financial compensation. A study by the Association of International Certified Professional Accountants found that 80% of Americans would choose a job with benefits over a job that offered 30% more salary with no benefits.
Additionally, having fewer employees enables small businesses to tailor their benefits directly to the needs of their employees, a strategy larger organizations may not be able to implement. This presents a unique opportunity for small businesses looking to stand out in the job market.
Benefits Toolkit for Small Businesses
Our Benefits Toolkit serves as a guide to employee benefits for small businesses. It outlines benefits requirements for smaller organizations and optional benefits programs that these businesses can use to attract talent. Furthermore, the toolkit summarizes the different strategies employers can use to select, implement and evaluate their benefits packages.
The Small Business Benefits Toolkit is organized into six parts:
In certain circumstances, state and federal law requires small businesses to provide certain benefits to employees, although these requirements vary (workers’ compensation, unemployment insurance, Social Security and Medicare, Family and Medical Leave, disability insurance, and health insurance). Other benefits are not required but are often offered to improve employee recruitment and retention (PTO, retirement plans, life insurance, dental and vision insurance, and other benefits).
Learn more about mandatory and voluntary employee benefits for small businesses by requesting your personalized Benefits Toolkit below.
A study by the U.S. Bureau of Labor Statistics found that small businesses generally spend between 25% and 28% of each employee’s compensation on benefits. Since small businesses often run on tight margins, they must have strategies in place to assess their benefits needs (such as evaluating your budget, understanding employee needs and expectations, researching available benefit options, and compliance considerations).
Learn more about these strategies by requesting your personalized Benefits Toolkit below.
No matter how robust a benefits package is, employees won’t get the most out of it if they don’t understand it. This is why employers should educate workers on their benefits options and encourage them to sign up. Communications during the plan administration and enrollment process and consistent employee education have an enormous impact on how workers use and perceive benefits.
Learn more about employee benefits communication strategies by requesting your personalized Benefits Toolkit below.
Employee needs and expectations can change over time. Therefore, small businesses must continue to monitor the success of their benefits programs and make necessary modifications. Small businesses should regularly evaluate employee opinions on benefits programs and prepare to update plans to better align with employees’ desires.
Learn more about how to monitor employee satisfaction / feedback, asses benefit effectiveness, and review / modify your benefits plans as needed by requesting your personalized Benefits Toolkit below.
Creating and managing a successful benefits program takes time and effort. This can be difficult for small businesses without a dedicated HR team. Fortunately, there are alternative options for small businesses looking to create robust and cost-effective benefits packages without an expert on staff.
Learn more about cost-saving strategies / alternatives and the benefits of outsourcing your benefits administration by requesting your personalized Benefits Toolkit below.
Creating benefits plans is a complex and time-consuming task. The Benefits Toolkit Appendix removes some of that burden by offering valuable resources you can print or email to implement and improve your employee benefits plans. Resources include:
- Article & Toolkits: Common and Costly Employee Benefits & HR Mistakes, Strategies for Identifying and Resolving Gaps in Benefits Offerings, 401(k) Plans for Small Businesses, Pros and Cons of Outsourcing HR Functions for Small Businesses, Low-cost Resources for Small Businesses
- Employee Surveys: Needs and Interest Survey, Employee Benefits Survey, Post-Enrollment Survey
For access to these articles, toolkits, and surveys that are personalized for your organization, you can request your Benefits Toolkit below.
Request Your Personalized Benefits Toolkit
To receive your FREE copy of the Small Business Benefits Toolkit, please use the following form.
Conclusion
In today’s labor market, a competitive benefits package is crucial for small businesses to recruit and keep talented workers. It can also contribute to a positive company culture, increased productivity, fewer absentee days and a healthier workforce.
While there are many steps to successfully select, evaluate and implement benefits programs, small businesses that take proactive steps to understand employee needs and stay up to date on benefits trends will have a competitive advantage over similar organizations. Small businesses are uniquely positioned to provide employees with attractive benefits programs tailored to their wants and needs. By doing so, employers with fewer than 100 employees may be able to compete against larger organizations offering higher paying wages and salaries for talented workers, improve hiring outcomes and ultimately affect their bottom lines.
The resources included in the Benefits Toolkit are just a small sampling of the materials that are available to employers. By contacting Parrott Benefit Group, employers can gain access to an entire library of employee benefits-related materials. Please speak with Parrott Benefit Group if you have any questions about these materials or any other content in our Benefits Toolkit.
The Benefits Toolkit is not intended to be exhaustive nor should any discussion or opinions be construed as legal or professional advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2024 Zywave, Inc. All rights reserved.
