Running a small business can be one of the most rewarding career paths, but it poses challenges. A tight budget means employee satisfaction and retention is more important than ever, but it can be difficult to compete with the resources of a much larger company. This is especially true when it comes to benefits.
A healthy benefits package may be difficult to pay for, but it’s essential to retention. A 2018 study by Randstad found that 63% of employees wouldn’t consider job offers for a company offering less than fifteen paid vacation days and over 36% were considering leaving their jobs due to an inability to work remotely.
Considering this study was done before The Great Recession, it’s safe to say that the need for good benefit plans for small businesses has only increased. Let’s explore how your small company can boost its benefits plan without breaking the bank.
What employee benefits am I required to offer?
Before we talk about the benefits you’ll have to make decisions about offering, let’s start by outlining the ones that are legally required. Knowing your obligations will help you budget for the total cost of employee benefits for a small company.
- Medicare and Social Security matching – You must withhold social security and medicare taxes for the first $137,700 you pay an employee. The required rates are 1.45% for Medicare and 6.2% for Social Security. You must contribute an equal share.
- Unemployment insurance – The Federal Unemployment Tax Act requires companies to pay unemployment taxes on behalf of employees.
- Overtime – The Fair Labor Standards Act requires overtime pay for employees working beyond 40 hours per week. You can avoid paying for this by keeping employee hours below the threshold.
- State dependent benefits – Some states require employers to offer additional benefits. These can include disability insurance, worker’s compensation, paid jury duty leave, and more. Be sure to check your state’s individual labor laws.
Offer a flexible work schedule
Let’s start with workplace flexibility, because it’s one of the few benefits that may actually save you money rather than cost anything. It’s also one of the most effective ways to keep your employees happy. A 2021 study found that the ability to work from home increased the likelihood of job satisfaction by 65%. The same study found that letting employees set their own hours increased satisfaction by 62% and reduced overall workplace stress by 20%.
In the last few years especially, companies all over the world have found that they can switch to a remote, hybrid, or flexible schedule without harming productivity. It’s a win-win benefit. Physical workplaces are expensive, and they limit your hiring pool to those who can commute. For these reasons, every small company should strongly consider offering flexible work schedules if your business model can support them.
Offer a healthy amount of paid leave
The United States is one of the few developed countries in the world that doesn’t require companies to offer paid leave to employees, but even so, it’s essential that you do. In a recent study of most valued benefits, job seekers reported more vacation time and unlimited vacation time to be ranked third and fifth overall. If you want to attract great talent, it’s important to give them the time off they need.
More paid time off seems expensive on paper, but the positive effects it can have on the workplace counterbalance that expense. An SHRM study found that employees who use most or all of their vacation time were more productive than their non-vacationing counterparts.
Maternity and paternity leave are important too
If you want to attract and retain young talent, it’s important to remember they may be planning on having children in the near future. Women in particular have been having a difficult time in the workforce recently. March of 2021 saw a 33-year low in women’s labor force participation. This creates a massively reduced overall hiring pool.
You can take advantage of this situation by offering a healthy amount of parental leave for potential employees. This will open your hiring pool enormously and provide stability to talented young professionals trying to balance family life with careers. While it might be expensive, it’ll likely pay off as a win-win for everyone involved.
Boost your healthcare benefits
Healthcare benefits are notoriously expensive, but they are absolutely essential if you want to retain employees. Over half of all Americans rely on health insurance through their employer, and if your company doesn’t offer any plans, it will be to your own detriment.
As a small business owner, you might feel like you’re stuck between risking losing good employees and breaking the bank to provide high-quality insurance. Luckily, you have a few options to consider.
- High deductible insurance with a health savings account – High deductible health plans are the most affordable, but it isn’t the best option for employees who actually need to utilize its benefits on a regular basis. To combat this, you can also offer a health savings account, which allows you to set aside pre-taxed income for employees to be used on medical expenses.
- Traditional group health insurance – Traditional health insurance is typically the best option for larger companies, but given the variety of plans available, they are worth looking into for companies of any size.
- Buy insurance through SHOP – The Small Business Health Options Program offers affordable insurance plans to companies with 50 employees or less. If your company qualifies, you might be able to find a much better deal than you would otherwise.
- Health reimbursement arrangements – The Small Business Health Care Relief Act recently reintroduced the legal use of healthcare reimbursement for companies of 50 or fewer employees. Your business can contribute up to $4,950 per employee, pre-taxed. Your employees can use this to buy their own insurance or pay for expenses directly.
Don’t forget one of the basic needs of employees: Meaningful Care
Many leaders want to know how to drive positive employee engagement while offering comprehensive care beyond traditional healthcare. Jane Miller, President and CEO of Gallup, recently said, “Wellbeing is a significant component to any strong culture. It’s a foundational element. It impacts how a person shows up at home, how they show up at work—and really, it’s about their capacity for what they can accomplish every single day.” Creating a culture of care has many positive impacts on your company, including improved employee retention, reduced absenteeism and increased productivity.
Let Corporate Chaplains of America care for your employees
Corporate Chaplains of America has over 25 years of workplace care experience. We provide whole-person care with a team of highly trained and certified chaplains who offer voluntary, confidential, and permission-based care.
Corporate Chaplains of America offers in-person and 24/7 virtual support to you and your team members, so everyone can get the care they need when they need it most. Contact CCA today to learn more about what we can do for your company.