Providing employee benefits can be tough on many small business owners. Benefits packages are costly, and many small business owners are already struggling to make ends meet. Some choose to provide the bare minimum, while others forgo benefits altogether. To attract the talent that will help you compete effectively, however, you should offer a benefits package that meets employees? needs and is competitive with what other small companies offer.
With the large number of employees needed to negotiate good deals that result in affordable benefits, small companies can't usually offer what large companies can. Though the costs my be a huge burden, small companies that offer attractive benefits packages have to deal with the cost and annoyance of employee turnover significantly less.
Start the process of creating a benefits package by breaking the benefits down into three main categories: health care, retirement and other fringe benefits.
Health insurance is the number one benefit you can offer your employees. It's the one that most of them can't or won't do without.
Small companies have many options when choosing health benefits packages. For example, they can look into HMOs, PPOs, HSAs and all the various options within each. If you're on a strict budget, look into offering a high-deductible plan. This will save you money on premiums because employees will handle more of the upfront costs before insurance kicks in. Whatever you do, you'll want to be sensitive to your employees? lifestyles and needs. Older workers might want greater flexibility in choosing their own doctors, while younger workers will want to reduce their out-of-pocket expenses.
Dental and vision coverage are both added bonuses and will aid in attracting quality, so if you can find a way to afford them, then try. They are not standard like regular health coverage, however, so if you can't afford them, that's OK too.
A retirement savings plan is the second most sought after benefit following health insurance. To stay competitive, small companies need to offer one.
There are two basic routes when it comes to retirement plans:
Regardless of the type of retirement plan that you choose, try to establish eligibility requirements. An example of this might be not matching part of an employee?s contribution to their retirement plan until they have been with your company for a certain period of time, typically a year.
Health insurance and retirement plans are must-haves for attracting and retaining key talent. All other benefits fall under the category of ?nice-to-have? and are not necessary. These nice-to-haves, however, are usually fairly inexpensive and can only bolster your benefits package to make it that much more enticing.
To make sure that your benefits package is really meeting the needs of your employees, talk to them and find out which benefits are most important to them and are going to keep them with you for the long haul.
