Offering employees the benefits they truly want can make a big difference when recruiting the quality talent your small business needs to succeed. In fact, 60% of job applicants report that benefits are a major deciding factor when considering any job offer.
Considering that they play a decisive role, providing attractive employee benefits will require a not-insignificant amount of financial investment and time. On top of the normal, everyday pressures of running a small business, you can easily find yourself overwhelmed with options and decisions.
So how do you decide which benefits are the best ones for your small business to offer? Where will you see the biggest return in employee loyalty and retention? You almost certainly won’t be able to offer your employees every benefit you would like to include. Every small business operates with a finite amount of profit margin, so discernment will be needed.
As a general rule, try to pick the benefits that add the most value for your employees. Choose the ones that make them feel appreciated and respected. Not all of the options are as expensive as you might think, but you will need to budget time to shop around.
Here are some of the most highly sought-after benefits to consider, along with suggestions for weighing the costs against ROI. By considering these categories, you can zero in on where you think your dollars and effort will make the biggest impact.
Few employees intend to work forever. It’s no surprise, then, that some form of retirement plan is high on their list of priorities. Many employers hear “retirement account” and wrongly assume that offering any type of plan is financially out of reach.
It might be, but do your business and your employees a favor by conducting just a little bit of due diligence. Look at some of the newer options that have come out for small business 401(k) plans. Make sure that you are making a well-informed decision.
Can your company afford to offer a 401(k) where employee contributions get matched by the company? If doing so puts too much of a strain on your budget, a simple 401(k) offering might be within reach. Since this is a high-priority item, follow the old adage that something is better than nothing.
Giving prospective employees the option of pre- and post-tax deductions could also tilt their decision to accept your job offer. Before you nix this category altogether, ask about the possibility of offering a Roth 401(k) instead of, or in addition to, a traditional account.
Health, Dental, Vision, Disability, and Life Insurance
Prospective employees invariably worry about their continued ability to provide for themselves and their families. No wonder another huge consideration when job hunting is the availability of various forms of insurance. Health insurance is the biggie, and it can include medical, dental, vision, and prescriptions.
For many small business owners, this category requires ongoing diligence to balance costs against employee needs. Check for different rates and options each year. Oftentimes a high-deductible plan with a health savings account (HSA) option is the most affordable route.
After health, maintaining some income in case of long-term disability or death is something of great concern to most employees. While these two don’t typically carry the immediacy associated with health insurance, they are important categories all the same.
Many small businesses that are able to provide health insurance will offer their employees long-term disability and/or life insurance as a la carte items. Yes, it will require some of your time to set these options up with a reliable provider. And you may find that few of your employees choose to pay for them. Nevertheless, you will still have demonstrated to job applicants that you possess a caring attitude.
Sweeten the Pot With Less Expensive Ingredients
Retirement accounts and insurance coverage are, without doubt, the two biggest categories of benefits job seekers are looking for. They also tend to be the most expensive. Small business owners who assess these two major categories may decide they’re financially out of reach — or all they can handle. Maybe so, but they should not stop looking for ways to provide benefits that will attract new employees.
Certain of the “smaller” benefits listed below might actually be deal-makers or deal-breakers for some of your best candidates. After all, the hiring landscape has changed dramatically since March 2020. What was once seen as a nice perk might now be the highest-priority item for an applicant. It pays to ask and to have some other benefit options available.
Paid Time Off
Who doesn’t enjoy a day off with pay? While paid time off will obviously cost your business money, it won’t put nearly the dent in your budget as retirement and insurance plans. Common forms of PTO include paid holidays, vacation days, sick time, and personal days.
Some small businesses will use additional time off as an incentive for exceptional job performance. The key is to come up with a combination that keeps your business at least on the same level as your competitors. Ideally, you might use this category creatively to put your business at the head of the pack.
Tuition Assistance and Mentorship
Depending on the type of business you operate, offering some form of tuition assistance and/or help to obtain certifications can be a big draw. Investing in your employees in this way can lead to loyal workers who choose to keep growing with your company. It also benefits your business to have well-trained staff!
Many businesses also offer low-risk internships or modest stipends to attract promising job applicants looking to break into their field. The time you spend mentoring these young aspirers could pay itself back in a — now qualified and experienced — full-time hire.
Assuming you have reliable employees, the ability to work from home (WFH) is low cost and adds much to work-life balance. Whether you decide to offer fully remote positions or in-office/WFH hybrid roles, this benefit has become a crowd favorite. Working from home offers the ability for employees to control their commute, schedule a needed repair, or put the kids on the bus.
The landscape of work has likely been forever impacted by the Covid-19 pandemic. That means failing to offer any WFH options could be well a sticking point for new hires. It could also potentially affect the retention of current employees.
Offering flexible hours is an inexpensive way to help your employees better achieve a healthy work-life balance. Some employees like to come in early. Others are better prepared to work hard when they can roll in at 10 a.m. Offering flexible hours or early-out Fridays can sway a qualified job seeker even if the salary you’re offering is lower than what they can make elsewhere.
Benefits that recognize people have commitments other than work don’t have to cost your business much — if anything. Yet they go a long way toward helping employees create a career and lifestyle they will stick with.
When it comes to deciding which benefits you will offer, you’ll need to keep an eye on multiple criteria. Cost is a big one, for sure. Just be sure to include what your employees say they find most motivating and what job applicants can get elsewhere. You might be pleasantly surprised to find that some of the biggest draws don’t cost nearly as much as you first thought.