Employee benefits are crucial for attracting and retaining employees. However, offering competitive benefits is often a difficult balance between keeping employees content and reducing costs. For small businesses, offering benefits can be a challenge.
Despite the costs, employee benefits are essential. According to Aflac, 49% of employees will look for another job within 12 months of beginning after they’re unhappy with the benefits that you provide.
Furthermore, as employees leave jobs in record numbers due to the Great Resignation, having competitive benefits is more important than ever.
With this tight economy, offering benefits is essential in attracting and keeping talent, especially for small businesses. It is important to keep in mind that an investment on your workers is an investment in your business, with huge results in retention as well as productivity and morale.
Starting with perks, to the value of providing health benefits to employees, let’s examine why offering employee benefits is vital for small companies.
Five benefits of providing employee benefits
Let’s examine the five primary benefits of offering employee benefits.
1. Recruit and retain key employees
Today’s workers appreciate and expect employers to provide excellent benefits. Results from Glassdoor’s Employment Confidence Survey show that 4 out of 5 employees would rather receive more benefits or new ones than a pay raise.
This could give small businesses the chance to compete with bigger companies with the resources to pay for more. Even if you can’t afford to pay a substantial paycheck, offering an attractive benefits package can get the best candidates in the door and will help keep your top talent for the long haul.
2. A healthy workforce is a productive workforce
Employee benefit services can provide your employees with resources to stay healthy and productive that can create an ideal win-win for your company and your employees. Wellness resources can include health benefits and other general wellness perks such as gym memberships or support for mental health.
By providing access to quality healthcare and wellness programs for employees–and providing the costs, eliminates an expense for the employees and their families. On the other hand, offering health and wellness benefits could be a key factor in reducing absenteeism and sick days. It’s a quantifiable return on your investment in your employees.
3. Culture and morale
As a small organization is commonplace to have close relationships with your employees. With regards to morale and culture employees appreciate this gratitude. Knowing that their employer is concerned about their health and well-being increases employee satisfaction and retention.
In a study conducted by Science of Care, 60 percent of those who claimed being cared for by their employers also stated that they intended to remain with their companies for a period of three or more years in comparison to 7% of the workers who claimed they weren’t appreciated by their employers.
Also, offering employee perks such as remote work could increase the morale of employees. In an Owl Labs survey, 22 percent more workers reported that they’re satisfied with their work from home as compared to those who work remotely.
4. Tax benefits
Many employee benefits can be tax-deductible to both your company as well as your employees, and not just the ones that you usually think of, like contributions to retirement and healthcare plans.
Other types of employee benefits are tax free, including:
Healthcare reimbursement
Life insurance
Tuition reimbursement
Child care reimbursement
Cafeteria plans
Employee discounts
Personal use of a company-owned vehicle
Cell phones provided by the company
Meals provided at the workplace
5. A solid foundation for expansion
A final advantage to employee rewards is the fact that they can set your company’s foundation to grow and scale. When you add more employees, having a distinct and attractive employee benefits plan assists you in attracting, hiring, and keep the best employees.
According to research done by LinkedIn, organizations rated highly on compensation and benefits from their employees experienced an average of 56% lower loss to attrition than organizations that were not rated highly.
What benefits are most important to employees?
The selection of the best benefits to your employees is vital to the successful implementation of your benefits program. In deciding what benefits to offer to your employees an employee benefits survey is a good way to begin. Find out what your employees would like to see added to your benefits package.
In reality, there are some benefits that employees are more interested in than others. According to an Gallup poll, well-being is the most sought-after benefit in the workplace among employees who are younger. This covers health and wellness benefits, as well as flexible working hours.
Some of the most-wanted workplace benefits are:
Healthcare benefits
Wellness programs
Remote job opportunities
Flexible work hours
Unlimited paid sick time and pay-for-sick leave
Parental leave
Retirement benefits
Career development
Tuition reimbursement
Disability insurance
Let’s explore how you can provide a few of these benefits that are top in the sections below.
How can you provide health insurance on a budget?
As per the Society for Human Resource Management the majority of employers believe that healthcare is the most important employee benefit. While the value of benefits for employees can’t be overstated but it’s a struggle for small-scale businesses to find a plan that is affordable.
The cost of traditional group health insurance policies are often too expensive for small-scale businesses. the increasing costs for healthcare has led to group health policies becoming more difficult for businesses to manage.
Health reimbursement arrangements (HRAs) are a wonderful health benefits option for small and large businesses alike. With an HRA it provides the employees you employ with a monthly allowance for healthcare expenses. Your employees submit their qualified expenses for reimbursement and then be reimbursed tax-free.
You are able to choose the allowance amount that is available to your employees every month. The best part is that when you have an HRA the allowances that are not used at the conclusion of the benefit period remain with you. So, you’re just paying for the health benefits that your employees actually need.
There are three main types of HRAs for small-sized firms. These include:
A qualified small employer HRA (QSEHRA) – An HRA created by the Affordable Care Act (ACA) that’s specifically designed for small-sized businesses with less than 50 full-time equivalent employees (FTEs). Annual allowances are capped according to the IRS.
Individual coverage HRA (ICHRA) A HRA for businesses of any size. Employers can design employee classes, and offer the amount they want without limits. Employees must have their own health insurance that meets MEC. (MEC).
A group coverage HRA (GCHRA) – Also called an HRA that is integrated, it is specifically designed to be used alongside an insurance plan for group health, such as a high-deductible health plan (HDHP).
A health stipend can be a flexible solution to help employees pay for health-related expenses. Health stipends operate similarly to an HRA in that you are able to determine monthly allowances for employee reimbursement. However, unlike an HRA, health stipends are tax-deductible.
Like with an HRA health stipends could be used to pay health insurance premiums and out-of-pocket expenses. With less regulations in place than HRAs or health insurance plans, health stipends give your employees more control over their health affairs.
How to provide employees perks for their work? enterprises?
Stipends for employee perks, also called fringe benefits can also be used to offer competitive employee benefits for small-sized companies.
Stipends allow you to give your employees monthly allowances for various costs which include wellness as well as remote work. Similar to an health stipend. employees submit a request for reimbursement for the expenses that you allow.
It is possible to reimburse employees for gym memberships, fitness classes, fitness trackers, meditation and mental health apps, and many more, in the event that you provide an employee wellness reward. Flexible employee benefits improve your employees’ overall health and lead to increased productivity.
Keep in mind that wellness is the most-desired perk among young employees. The wellness stipend lets you to compete against larger corporations that might not provide flexible wellness benefits.
If your employees are remote, you can also offer them a remote-based stipend. When employees work in-person at work, they utilize computers, equipment, and other amenities. When they work from home the broadband, internet connection and space for their work. Employees can use these monthly allowances to pay for office expenses like Internet and phone costs.
A remote work stipend ensures all employees adequately prepared to work at home. It is a tempting offer for prospective employees.
Conclusion
Benefits for employees are important even for small-scale businesses. Since the Great Resignation inspiring millions of people to leave their jobs in search of greater opportunities, benefits are a great way to attract and retain employees.
