4 benefits small businesses should prioritize
Business owners want to provide the best working experience for their employees, and benefits can be a significant part of a competitive compensation package and sustainable recruitment and retention strategy. Great benefits can help keep your employees happy, productive, and healthy, which can only be a boon to your business. However, even given the significant upside of a strong benefits package, many small business de-prioritize it, leaving both employees and employers dissatisfied and feeling stuck. Why?
Small businesses rarely have a devoted HR or operations person, and even if they do, they can be managing a lot of responsibilities at once, with not much time for vetting and managing benefits. With health insurance and retirement accounts, it can feel like there’s a substantial amount of specialized knowledge and research that are necessary to make an informed decision, and given many other competing business priorities, decisions about benefits can often be put on the back burner indefinitely.
I’ve been the founder of two startups and regularly work with many small business clients. I’m familiar with the suite of benefits options available as well as their costs, maintenance, and how in-demand they are from an employee standpoint. I’ve ranked the most common benefits below, according to what I generally recommend to small companies. There are certainly industry-specific exceptions and norms, and while this ranking won’t work for all small businesses everywhere, I suggest using it as a general set of guidelines in terms of what to prioritize.
Basics for full-time employees:
● Livable salary for your metro area
● Baseline health insurance
● Non-matching 401(k)
● Workers compensation
● Premium health insurance
● Dental and vision insurance
● 401(k) match
● Flexible Savings Account (FSA)
● Disability insurance
● Commuter benefits
Dependent on your industry and employee demographics:
● Relocation expenses
● Life insurance
● Child care subsidies
● Tuition reimbursement
● Gym membership subsidies
● Healthy snacks and drinks
Additionally, I recommend these action steps as well:
● From a recruiting and retention standpoint, take a look at what your competitors and comparables are offering to see what’s standard in your industry and for your employee demographic.
● When polling your employees about benefits, it can be time-consuming to offer them a full-suite of benefits and discuss each one, especially ones that are further down your roadmap. Ask more general questions like, “What is most important to you in a benefit?” (Personal cost, short-term or long-term gain, relevance to your work, etc.) and “How much does our benefits package impact your overall job satisfaction?”
● While some employees may request higher pay instead of additional benefits, you should critically consider what you’re trying to achieve: Is it healthiness and happiness at work? Is it highly competitive salaries for your team? Can you do both? If you can only do one or the other, what’s more productive for your business?
While I certainly don’t believe there’s one benefits package or set of rules regarding benefits that would be relevant and helpful to every employer, I hope these general best practices based on my experiences helps you move forward with providing a great set of benefits for your company (and yourself – don’t forget that you’re an employee, too!).
By Roger Lee
Roger Lee is the CEO of Captain401, an online 401(k) tool and investment advice service for small businesses and startups.