Small Business & The Value of Comprehensive Benefits
Small businesses are an important client sector for HR professionals and consultants. In fact, 70% of small businesses have formalized their HR structures. In a tight labor market, small businesses are increasingly looking to HR consultants and professionals for advice about, and implementation of, the strategies that attract and retain a top-tier workforce.
This article highlights the current state of employee benefits that small businesses provide and offer HR professionals insights into the goals of small businesses.
- While the job market has been somewhat strong, many companies are having difficulty filling open positions with high-quality employees.
- To recruit and retain the best talent, small businesses must offer competitive compensation packages that help them to stand out from competitors.
- According to various sources, more than half of small businesses (56%) plan to offer new benefits to their employees in 2019.
- A robust benefits packages reduce turnover and is less costly than recruiting and training new employees.
Small Businesses Offer Benefits on Request
- Small businesses are responding to the job seeker’s desire for more and better perks. Nearly one-third of job-seekers begin a job search to find better pay and benefits, demonstrating the vital role of benefits in attracting and retaining a high-performing workforce
- Small businesses are starting to understand the importance of providing substantive benefits packages.
- Job-seekers expect businesses, especially larger ones, to offer top level benefits. In response, 30% of small businesses are offering benefits in 2019 to fulfill employee requests. They recognize that employee benefits can improve morale and reduce turnover.
Primary Reasons Why Small Businesses Plan to Offer New Benefits in 2019
- Employee Requests: 30%
- Turnover Reduction 27%
- Financial Growth 17%
- Legal Requirements 13%
- Union Negotiations (when/where applicable) 9%
- Benefits indicate that your company is durable and treats its workers fairly, both of which are attractive traits to potential employees.
- Companies committed to attracting top talent should also consider robust benefit offerings as an extension of offering a livable wage. For example, if your business does not offer quality health insurance, your employees are subject to significant out-of-pocket expenses. Providing effective health insurance will help augment employee salaries.
- Integrating salary and perks can help your company attract the talent it seeks, and will help improve company morale, as well.
- It costs less to offer benefits than to recruit and hire new employees.
- To recruit and retain a talented workforce, your business should offer the benefits their current and future employees desire.
- Small businesses most commonly provide health benefits, retirement and 401k plans, and paid time off (PTO).
What Benefits Do Small Businesses Offer?
- Health: 69%
- Retirement: 52%
- Family Leave: 48%
- Paid Time Off: 45%
- In-Office: 33%
- Student Loan Repayment: 17%
- A generous PTO policy helps small businesses attract talent. On average, private industry workers received only 10 days of vacation in 2017, which sets the bar incredibly low for your small business to supersede.
- An above-average allotment of vacation can result in happier, more motivated, and more productive employees.
- Unsurprisingly, nearly 20% of small businesses plan to introduce more flexible PTO in 2019.
- One creative approach to PTO is to combine vacation, sick, and personal time into a single, all-encompassing designation. This approach offers employees more flexibility and can be positively pitched to job-seekers.
Small Business Benefits in 2020
- Employees want their perks to match their paycheck. Given this reality and in an employee-friendly job market, small businesses will want to expand their benefits packages to attract top talent.
- Specifically, they should focus on providing PTO benefits above industry standards and health insurance options.
- HR professionals should advise growing companies on how to design compensation packages that best attract and retain top talent.
Want to Learn More About HR for Small Business?
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