Small businesses make up a big part of the U.S. economy, with over 6 million and counting. According to the U.S. Census Bureau, 98% of businesses in the U.S. have fewer than 100 employees. And for many of the owners of these small companies, offering benefits to their employees feels out of reach.
With the economy recovering but uncertain, the tenuous state of the Affordable Care Act and its effects on business owners and the simple cost of doing business, some small business owners feel they can’t offer benefits. The truth is, offering employee benefits in your small business can create a powerful recruitment tool and create a more engaged and loyal workforce. Here are 5 great reasons to make offering employee benefits a reality in your company.
The truth is, offering employee benefits in your small business can create a powerful recruitment tool and create a more engaged and loyal workforce. Here are 5 great reasons to make offering employee benefits a reality in your company.
1. Employee Benefits Can Be an Incredible Value
Just because you decide to offer benefits, doesn’t mean it has to be expensive. A good rule of thumb is about 1.2-1.4 times an employee’s base salary. So the cost of a $40,000 employee would be about $48,000 annually.
While that’s not small change, it is far less than the cost of replacing that same employee, which hovers at around 20% of her base salary, along with all the training and onboarding you invested.
Keep in mind that a small business feels the impact of an empty seat far more keenly than a large corporation, so it’s incredibly important to weigh the cost of retention tools like employee benefits against other, far greater costs.
Benefits don’t have to break your heart and your wallet. See what we suggest is appropriate…
2. It Doesn’t Have to be Your Responsibility
Did you know that at least half of the workforce is willing to pay some of their own benefits package costs in order to access the kind of care they want?
55.5% of surveyed employees are willing to bear the cost of their benefits in order to have a choice of benefits that meet their needs, according to MetLife’s 13th Annual U.S. Employee Benefit Trends Study. By investing with your employees you help get them one step closer to a great employee benefits package that works for the company and the individual.
55.5% of employees are willing to bear the cost of benefits in order to have their choice of perks.
3. It’s a Great Recruiting and Retention Tool
Do you ever look at the job ads of your competitors? What do they say? Low pay, absolutely no benefits. Of course not, because that wouldn’t attract anyone. Your employees want and need benefits in order to seriously consider working for you.
Oddly, only 29% of HR pros surveyed by SHRM said they were using employee benefits to recruit! In a study from the Employee Benefit Research Institute, 76% of employees said benefits are an extremely important factor in their decision to accept an offer of employment.
And when it comes to your current employees, keep in mind that over half of them feel they could find another job within 6 months. What are you offering them to stay? In a survey of hiring managers, HR professionals and workers, CareerBuilder reports that 58% of respondents identified better benefits as the best way to improve employee retention.
Should you be using employee benefits as a recruiting method?
4. Time-consuming? Not at all!
There are plenty of consulting firms that will make it their business (and have!) to help you create the best benefits package for your employees. One that meets your budget, gives your employees the choice they want and builds engagement and excitement within your office.
You may not have a dedicated HR person to handle your employee benefits solutions, packages, options, and strategy — but you do have a choice when it comes to selecting a provider that can take the grunt work off your hands.
If you don’t have an HR pro to handle your benefits, this doesn’t mean you can’t implement a plan.
5. You’re Not Alone
If you’re used to handling all aspects of employee management yourself, get ready for a pleasant surprise. We can help! From setting up employee benefits from scratch to ensuring that your employee benefits plans are compliant and efficient.