HR and Benefits for Your Small Business: What You Should Consider
As a small business owner, if you have employees then you know that they are interested in what you have to offer in terms of benefits. Not only do your employees want these benefit options, but the right benefits packages can also attract better employees and ensure that they stay with your company for longer. There is no requirement by law to offer benefits if you have fewer than 50 employees, but you may still want to consider it and include some key benefit options that people look for.
Why You Need to Offer Benefits
If you do not meet the legal threshold that requires you to offer healthcare options, it is still in your best interests to at least consider this for your employees. These are some of the main reasons you should offer benefits and how your company will benefit from the offerings.
- You will be able to attract better employees and keep the best ones you have – You want your business to thrive, and to do that you need to have the best employees working for you. The employees that will do the most for you often also have higher standards in terms of what they require in return from the company. In terms of benefits, this means they want to have some options to enroll in key offerings. If you offer high-quality benefits, then you will be able to attract and retain the most qualified of candidates. This also keeps your employees happier, so once you have them in the door they will be less inclined to leave because another company offered them the same pay but better benefits.
- You can increase your bottom line – There are some employees or potential employees that will be willing to accept a lower pay if they have better benefits offered to them. This will need to be worth it for them, but there are many benefits for employees in this situation. Not only do they get to have better benefits, but they can also lower the amount that they pay in taxes over the course of the year. For the right employees, having a great health insurance plan means more than an extra $200.00 every pay period, because with that plan also comes peace of mind. This is especially true for employees who have children that they are taking care of.
- You can boost employee morale and create loyalty – When you offer a good benefits package, you are showing that you care about your employees. This will promote a better level of morale within your company and will result in your employees being happier and healthier. As a result, you will notice that there is less staff turnover within your business. By offering insurance and other options, you are essentially telling your employees that you care. They feel as though they are a valued asset and they will be more loyal to your business in the long run.
- You can ensure employee wellness and health – By providing options for health care, you are essentially ensuring that they have access to health care and can take better care of themselves. This includes going to preventative doctor visits, getting help faster when sick, and more. When your employees are healthy, then your overall business environment is better. By having access to preventative care, you will also find that there will be fewer sick days that your employees take and less people coming into the office sick. This creates an increase in productivity and profitability within your business.
What Kinds of Benefits Should You Offer?
Now that you understand how important and beneficial it can be to offer insurance and benefits options to your employees, it is now time to figure out what you will be offering to them. This is a list of options to consider for your benefits package. You can offer as little or as much as you want. Keep in mind that the more you offer, the richer the package will be. If a package is rich, that means it will cost more for you to provide, but it will also offer you many more of the benefits that are listed in the above section and further entice a candidate to accept your job offer letter.
- Health Insurance – This is likely the biggest thing that many job candidates are looking for. They want to not only know that they have the option of getting health insurance through their employer, but also that they can get a good deal on the plan. If you want to offer more than one option to your employees, that is even better. In addition to offering a health insurance plan to your employees, you should also consider whether or not you are willing to pay for a portion of the premium for them every month. This is not a requirement, but there are many companies that choose to do this in order to make their benefits options more attractive than their competitors in the market. Another thing to consider in terms of health insurance is that if you have 50 or more employees, you are required by law to offer health insurance to your employees. Once you hit that threshold, it is no longer an option but must be included in your benefits package. If you are not required to offer it, you may find that some candidates may not even consider the position if health insurance is not an option in the benefits package.
- Dental Insurance – After health insurance, the next thing many people will look for is dental insurance. It is almost as though the two go together for many people. However, it is not often offered by smaller businesses. If people are going to take care of their health, taking care of their teeth and mouth is part of that and a big reason why you should offer it. Just like health insurance, you can choose to not pay for any portion or choose to pay for part of it if employees wish to enroll. A big dental expenditure can really set someone back, but having dental insurance is a great way to avoid that, making it a big reason people look for it.
- Vision Insurance – To go along with dental insurance, many people also want vision insurance. This is especially true for people who already have glasses or contacts and will need to get their vision checked every year for a new prescription. Vision insurance is usually fairly inexpensive in the market, making it a great benefit for you to add to your package for your employees.
- Flexible Spending Accounts – Even with health, dental, and vision insurance, there are still many things to pay for out of pocket. This is why offering a flexible spending account option is attractive to many people. Your employees can put money into these accounts tax free to pay for these expenses. They will save money in taxes over the course of the year and can pay for their health costs more easily and in larger chunks. There is a legal maximum of $2,650 that individuals can place into these accounts, so you will want to ensure that you set these maximums up if you offer this to your employees.
- Paid Time Off – No one wants to work all the time, which is why many people look for how much time they can get off when considering a new role. You can offer paid time off in a number of different ways including paid holidays, paid vacation, sick day banks, and more. However you want to organize it, it is still important to offer it to your employees. There is nothing better to reset an employee and revitalize them in their role than to let them have some time for rest and recovery. Paid vacation and holidays are usually the most common ways of offering paid time off. You do not have to offer this immediately if you do not want to. You can require that they make it through the first 90 days before they are eligible to have a paid vacation day or start accruing paid time off. As long as it is offered and it is a reasonable offer for your employees, they will be happy that they have the option and will be able to reset from time to time.
- Retirement Options – Many people want to make sure they have retirement options before they accept a position with a new company. They want to ensure that they can put away some of their own money so that one day they can retire. As an employer, this is something that you should definitely offer so that you can help your employees set themselves up for the future. Just like many of the other benefit options, you can set this up in a number of ways so that both your employees and the business benefits. The two main ways is through a defined benefit plan (better known as a pension) where the business contributes all of the money, or through a defined contribution plan (better known as a 401(k)). These days, the most common method for businesses is the defined contribution plan where the employee contributes their own money and the company can choose to match a specific percentage if they want to. This is more common now because a pension-type plan costs the company more in the long run. You can choose to do whatever works best for your company. You will want to shop around to find the best provider for both your needs and the needs of your employees. Not all of your employees will take advantage of this benefit as much as the first two mentioned, but those that do will be thankful that they have this option. Employees like this because it is easy to set up and they can set it and forget about it while their retirement money continues to increase.
- Life Insurance – Life insurance is not always something that people think about, and they may even put it off. For many people, the only life insurance that they have is through their employer. The way many employers set this up is by offering life insurance at no cost to the employee in a specific amount. It may be $25,000 or $50,000 and it is completely paid for by the company. Another option is to require that the employees pay part of the premium. You do not have to offer it for free if you do not want to, but it is a popular way of setting it up for your employees. In addition to this amount, you can offer supplemental insurance that they can pay for on their own and add on to the policy. The advantage of this benefit for your employees is that they can get a type of insurance they may not be considering yet and they can enroll during the new hire enrollment period without having to undergo medical underwriting in many cases.
- Disability Insurance – There are two main types of disability insurance that you can offer your employees: short-term disability and long-term disability insurance. This type of insurance is a great way to reduce the loss in income if your employee is hurt, whether it is on or off the job. Short-term disability insurance is set up to provide financial assistance for a specific period of time if the insurance claim is approved. Once short-term disability insurance cuts off, long-term disability insurance will kick in. This is a great benefit to offer your employees so they can help prepare for their financial future in case they get hurt and cannot work for some time or for the rest of their lives. Many businesses choose to offer this as an option that the employee must pay for completely out of pocket, but you can also choose to pay for one of the two as part of your benefits package. If you are going to pay for one, the most commonly chosen one for businesses is short-term disability.