Benefits for employees are essential to keeping and attracting employees. However, offering competitive benefits is often a difficult the needs of employees and managing expenses. For small businesses, offering benefits can be difficult.
In spite of the expense, employee benefits are essential. According to Aflac 49% of employees will look for another job within 12 months of starting if they aren’t satisfied with the benefits offered by your company.
Additionally, with people leaving job vacancies in record numbers due to the Great Resignation, ensuring that you offer competitive benefits is more crucial than ever before.
With this tight economy and the need for benefits, it’s essential to provide them in attracting and keeping employees, particularly for small businesses. It is important to keep in mind that an investment on your workers is an investment into your organization, with significant returns on employee retention, productivity, and morale.
from perks and benefits to value of providing health benefits to employees, let’s take a look at why offering employee benefits is important for small-scale businesses.
Five benefits of providing employee benefits
Let’s take a look at five of the major benefits of offering employee benefits.
1. Keep key employees and recruit them
In the modern workplace, employees want and demand excellent benefits. The Glassdoor Employment Confidence Survey show that 4 out of 5 employees would prefer to have an additional benefit or a new one over a pay increase.
This can give small employers a way to compete with larger organizations that have the resources to pay for more. Even if you’re not able to shell out a big pay check, offering a competitive benefits package can get the best candidates to apply and help you retain them long-term.
2. A healthy and happy workforce is a productive one
Employee benefits can supply your workforce with resources to be productive and healthy which is an excellent win-win situation for your business and your employees. Wellness resources can include health benefits and other well-being benefits like fitness memberships and psychological health assistance.
For example, providing access to top-quality healthcare and wellness programs for employees–and contributing to the cost–removes the financial burden for families of employees. On the side of the employer, offering health and wellness services can result in fewer absences and sick days. It’s a quantifiable return on investment for your employees.
3. Culture and morale
For a small company it is normal to maintain close relationships with your employees. When it comes to culture and morale, employees feel this gratitude. Knowing that their employer cares about their health and wellbeing increases employee satisfaction and retention.
In a survey conducted by Science of Care, 60 percent of those who claimed feeling cared for by their employers also indicated they would stay at their employers for a period of three or more years, as opposed to only 7% of the workers who felt they were not valued at work.
Additionally, offering employee perks such as remote working can increase the morale of employees. As per the results of an Owl Labs survey, 22 percent more workers reported that they’re content with their work from home as compared to those who work remotely.
4. Tax advantages
Many employee benefits are tax-advantaged for both your business and your employees, and not only those you’d usually think of, like contributions to healthcare and retirement plans.
Several other types of employee benefits solutions are tax-free which include:
Healthcare reimbursement
Life insurance
Tuition reimbursement
Child care reimbursement
Cafeteria plans
Employee discounts
Private use of a company owned vehicle
Company-provided cell phones
Lunches are provided by the workplace
5. A solid foundation for expansion
A final advantage to employee rewards is the fact that they can set the foundation of your company to expand and grow. As you recruit new employees, having a distinctive and appealing employee benefits package helps you attract, hire and retain the best employees.
According to studies done by LinkedIn and LinkedIn, companies that scored highly on compensation and benefits from their employees had 56% less turnover as compared to organizations that were rated poorly.
What benefits are most important for employees?
Selecting the right benefits for your employees is essential to the success of your benefits package. In deciding what benefits to provide your employees, the employee benefits survey is an excellent place to begin. Ask your employees to share their ideas on what they’d want to see in your benefits package.
That being said, there are certain benefits that employees would like more than others. According to an Gallup poll, well-being is the most desired workplace benefit among younger employees. This includes wellness and health benefits and flexibility in working hours.
The most desired workplace benefits are:
Healthcare benefits
Wellness programs
Remote job possibilities
Flexible work hours
Unlimited paid time off as well as sick leave
Parental leave
Retirement benefits
Career development
Tuition reimbursement
Disability insurance
Let’s dive into how you can offer a few of these benefits that are top as we go through the section below.
How can you provide health benefits while on a tight budget
As per the Society for Human Resource Management, 90% of employers view healthcare as the top employee benefit. While the value of health benefits to employees can’t be overstated However, it can be a difficult task for many small companies to implement an affordable plan.
The costs of traditional group health insurance policies are often too expensive for small companies, and the increasing costs for healthcare has led to group health policies becoming more difficult for companies to manage.
Health reimbursement arrangements (HRAs) are an excellent health insurance option for large and small businesses alike. With an HRA that you offer to your workers a per-month allowance for health expenses. The employees submit their qualifying expenses to you for reimbursement. They then get reimbursed tax-free.
You can choose the allowance amount you offer your employees each month. The best part is that with an HRA, any unused allowances at the time of the benefit year’s end will be yours. So, you’re just spending money on health costs the employees actually use.
There are three main types of HRAs accessible to small enterprises. These are:
Qualified small-sized employer HRA (QSEHRA) is an HRA created by the Affordable Care Act (ACA) that is designed specifically to cater to employers with less then 50 equivalents of full time (FTEs). Annual allowances are restricted in accordance with the IRS.
The HRA with individual coverage (ICHRA) An HRA that is available to companies of all sizes. Employers can design employee classes, and offer any amount of allowance without caps. The employees must be covered by individual health insurance that provides minimum essential coverage (MEC).
Group coverage HRA (GCHRA) – Also known as an HRA that is integrated, it is designed to work as part of an insurance plan for group health like an HDHP or high-deductible health program (HDHP).
Furthermore, a health stipend could be a cost-effective method to assist employees in tackling healthcare costs. Health stipends operate similarly to an HRA in that you can determine monthly allowances for employee reimbursement. However, unlike an HRA health stipends, they are taxable.
Like with an HRA health stipends could be used for health insurance premiums and out-of-pocket expenses. With fewer regulations that HRAs and medical insurances, health stipends offer your employees greater power over their healthcare affairs.
How do you offer employee perk stipends to small enterprises?
Stipends for employees, also called fringe benefits are another method of providing employees with competitive benefits for small-sized enterprises.
Stipends can be used to give employees monthly allowances for various expenses that include wellness and remote work. As with a health stipend, your employees can submit a request for reimbursement for expenses you permit.
You can reimburse employees for their fitness classes, gym memberships as well as fitness trackers or meditation apps, as well as other things when you provide an employee wellness allowance. These flexible employee benefits improve your employees’ overall health, which leads to more productivity.
Keep in mind that wellness is the most desired perk for young workers. By offering a wellness stipend, you to compete against larger corporations that might not provide flexible wellness benefits.
If your employees are remote You can offer them a remote work stipend. When employees work in-person at the office, they utilize computers, equipment, and other amenities. When they work at home it is their own broadband connection, internet, and space to work. Employees can avail monthly allowances to pay for office expenses such as phone and internet bills.
Offering a remote-based pay stipend will ensure all employees adequately prepared to work at home. It could be a great incentive for prospective employees.
Conclusion
The provision of benefits for employees is important even for small companies. With the Great Resignation inspiring millions of people to leave their jobs to pursue greater opportunities, benefits are an excellent way to draw and keep employees.
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