How to Choose the Right Benefits for a Small Business
Between the pandemic, the Great Resignation, and quiet quitting, HR teams have witnessed a complete transformation in how employees’ needs and priorities have changed. Much of that change has impacted how HR departments are thinking about employee benefits. With the pandemic spurring a revolution in digital healthcare solutions, great benefits are no longer exclusive to big companies and are now within reach for employers of almost any size, at a price point that won’t scare your CFO.
The key to offering the right benefits for your company? Setting your small business benefits strategy. Here are some tips to choosing the right benefits plan for your business.
What types of employee benefits do small businesses usually offer?
Post-pandemic, the big three - medical, dental, vision – are considered tablestake offerings. These benefits keep your employees healthy, which helps them bring their best and most productive selves to work.
Retirement benefits in the form of an IRA or 401(k) are another offering that’s increasingly important to employees (especially with today's market headlines). With options like the Savings Incentive Match Plan for Employees, or SIMPLE IRA & SIMPLE 401k, more small businesses than ever are able to offer this to employees without burning through their limited budgets.
Have a company full of pet lovers? Everyone commuting with public transit? Ancillary benefits are excellent incentives that can be especially beneficial if aligned to specific pockets of your employee population.
There is a lot to choose from, but don’t get benefits FOMO yet. Before throwing down on extra benefits, first gather insights from your benefits broker. Your broker can provide insight to your employees’ needs based on benefits usage in previous years while working within your overall budget to determine which ancillary benefits are best for your business.
What's the difference between benefits and perks?
Another important point: Perks, like vacation and paid time off, are not the same thing as benefits. Benefits are usually employer-sponsored services or insurance administered through external vendors, whereas perks are usually extra rewards or company policies that aim to make working there attractive and enjoyable.
Benefits are considered part of the overall compensation or total rewards. For instance, benefits might include:
- Health insurance
- Vision insurance
- Dental insurance
- Pet insurance
- Commuters benefits, etc
While perks might include:
- Generous Paid Time Off (PTO) policy
- Free bagels and coffee
- Free dinners
- Flexible working hours
First, make sure you have a benefits broker who can support the process
Your benefits broker will guide you through the process of creating and implementing a benefits package that meets your needs, which is why a strong partnership with your broker is a must-have for this process to be successful for you and your employees.
Your benefits broker can help you determine what type of coverage best suits your business, as well as provide advice on compliance with local, state, and federal regulations.
As benefits experts, they can also help give guidance on benefits trends and benchmarks in your geography or industry, helping you to stand out from the competition with exemplary benefits offerings.
Determine what benefits your employees need most
To do this, simply look at your employee population and their demographics. Based on their demographics, consider what types of benefits will be most beneficial to them.
For example, if you have mostly millennials on your staff, a robust retirement plan may not be as attractive as a Health Savings Account (HSA) plan or student loan repayment benefits.
Try distributing an employee benefits survey to get feedback on their needs and values. Also, consider prior utilization. Examine how much your employees are using and taking advantage of their current benefits. This can help you pinpoint what areas need to be improved or expanded on, and which ones can be cut back.
Study benchmarking data
These data points are key to understanding what else your employees are evaluating when deciding to stay or join your company. This data should include not only what other companies in your industry are offering their employees, but the overall value of the offerings.
For example, imagine that you’re in a competitive talent market and had a few candidates decline their job offers. When looking at similar sized employers in your industry, a benchmark report shows that those companies index high on 401(k) matches and fertility support. Combined with employee survey data, you now have enough insight to create a compelling business case to your executive team on how to reconfigure your benefits plans.
Don’t know where to start? Ask your broker. They should be able to provide you with detailed benchmarking data specific to your geo, employer size, and industry vertical.
Assess your current offering (if you already have one in place)
Consider all the information you have now gathered. Look at utilization, employee survey data, and benchmarking data to determine what’s working and where you can improve.
And a reminder: offering every benefit under the sun does not necessarily mean your employees will be satisfied if the value and quality of services is poor. If the benefits you provide aren’t being utilized, you’re potentially wasting your company’s money when it could be redirected somewhere else internally.
Employers can do really remarkable things for their employees when they take steps to do more with less, and your broker can and should take the lead on this, helping you to develop a strategy to improve upon what you’re currently offering.
Look to your broker for guidance early and often
As your business grows, it's crucial to have a reliable benefits broker by your side. Your broker should be your go-to guide for everything related to benefits and help you build and manage them while staying within your budget.
Ready to find a broker that feels like another member of the team? Talk to one of our benefits experts today.