When it comes to benefits, small business employers have a sea of options. With a limited budget, however, it is vital to be strategic with benefit dollars. Which benefit options are a smart investment? Which benefits are best for employees?This small business guide breaks down benefit options for employers and how to determine which options are best for employees.
Benefit Options for Employers
Talk to any colleague, advisor, or team member and the list of common employee benefits will sound similar. Here is a list of popular small business benefits examples:
- Paid time off such as PTO, sick days, and vacation days
- Health insurance
- Life insurance
- Dental insurance
- Vision insurance
- Retirement benefits or savings accounts
- Healthcare spending or reimbursement accounts, such as HSAs, FSAs, HRPs, and HRAs
- Long term disability insurance
- Short term disability insurance
- Tuition reimbursement
- Childcare benefits
- Gym memberships or discounts
- Wellness programs
- Relocation assistance
- Commuting/travel assistance
- Telecommuting options
- Workplace perks such as recreation activities, food and coffee, and flexible work schedules
For small and medium-sized employers with lean operating budgets, some of these examples may seem out of reach. But before you dismiss offering big-ticket benefits because of cost, consider different benefits structures and contribution strategies which help control cost. We’ll cover this next.
Benefits Structure Options
Here’s something to consider - how you offer benefits is just as important (if not more important) as what you offer. In other words, the way you structure, contribute, and offer the benefits is a big contributor to the success and affordability of the program.
In general, companies have two different ways to structure, contribute, and offer employee benefits:
1) Organizational-oriented benefits: Offer employees a specific or defined benefit. Benefits are employer-owned and employer-selected. Examples include a traditional health insurance policy, retirement pension or 401(k), or formal wellness program.
2) Consumer-oriented benefits: Offer employees employer-funded dollars to customize their benefits using technology. Benefits are employer-funded and employee-selected. Examples include defined contribution healthcare, defined contribution retirement plan, or allowances for wellness activities.
For America’s small business employers, the consumerization of employee benefits creates a game-changing advantage. Unlike traditional benefits that attempt to provide a universal solution for the group of employees, a consumer-directed approach enables small businesses to offer true benefits, customized to the unique needs of each employee - all at a cost determined by the company.
With this approach, the benefits expectations of employees are met in ways that are much more manageable for the employer - leveling the employee benefits playing field for small employers.
Conclusion - What are the Best Benefits for Employees?
As we wrote about last week, benefits matter to employees. Recent studies suggest employees of small businesses choose and stay with companies because of the benefits they offer, and yet employees crave benefits with increased value and choice. This may sound like a balancing act too difficult to achieve on a small business budget, but it is not.
First, identify the benefits and perks that matter to your unique workforce. Survey employees to find out what is important to them. You might find employees are already covered with personal health insurance they like, and would prefer a company contribution to help with the cost rather than switch to an employer health insurance plan. Or, you might find out employees love “Fun Shirt Friday” but could do away with the ping pong table.
These are just examples, but you get the idea. The best benefits for your employees attract the right type of employees to your company and support a healthy, productive, loyal workforce.
What benefit options for employers are you seeing? What do you think are the best options for employees? Join the conversation with a comment below!