When employers talk about their "compensation packages," they don't mean just salary. Typically, this package includes an employee's pay, plus a number of other perks like health insurance, retirement plans and paid time off.
But a truly impactful employee benefits program goes well beyond medical coverage, said Alex Shubat, CEO at work-life balance platform Espresa. It's a tool you can use to engage and retain your workforce.
"I believe that benefits are all about employee recruitment and retention, which comes from people feeling valued," said Shubat. "They want to know that their employers care about their well-being and respect their time."
Most employers seem to agree with this perspective: A 2017-18 research report by Thomsons Online Benefits found that about 80 percent of employees said their top objective for building a benefits package was to attract and retain talent. The other top objectives included enhancing employee engagement and promoting employee health and well-being, which has risen in recent years.
Employees polled about their priorities ranked "health" (61 percent) as number one. Behind it was "wealth" (23 percent) and then "career" (16 percent). With employee and employer benefits priorities becoming more aligned, it's important for employers to offer fulfilling benefit packages by listening to employee needs and using technology to make it a better experience for all.
If you're looking to build a comprehensive, cost-effective and engaging benefits program for your small business, here's what you need to know. [See Related Story: Quitting Your Day Job? The Basics on Benefits Coverage for Entrepreneurs]
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Here are some key perks that many businesses offer, according to Money-Zine:
- Health insurance, including medical, dental and vision
- A retirement savings plan such as a 401(k)
- Additional insurance, like life and disability
- Paid time off for vacation, sick days and personal days
- A pre-tax commuter benefits program if your company is in a major city. For example, New York City requires all employers with 20 or more full-time, nonunion employees to offer this type of program.
- Flexible and/or remote work options to help employees save on commuting costs and achieve better work-life balance
Of course, these are just the basics. To stand out and make your company more attractive to employees, you'll need to go above and beyond, within your small business budget.
"All companies wish they could spend more on benefits, but it is a balancing act," said Jeff Yaniga, chief channel officer of Maestro Health benefits enterprise company. "It's been hard for smaller employers to offer choice. Voluntary benefits continue to improve and evolve.
Employers must budget benefits with the same rigor by which they budget payroll, innovation, and building great products and services."
Benefits don't have to eat up your whole budget, though. Small perks like free food or discounted services can go a long way in keeping employees happy.
"Something as simple as free drinks in the kitchen may only cost a few hundred dollars a year, but it's amazing how much the 'little things' affect morale and performance," Shubat said. "A soda machine ... free massages or onsite dry cleaning ... aren't going to break the bank, and the value they generate in terms of retention is unbelievable."
Some wellness related perks can include gym memberships or discounts, smoking cessation programs, subsidized health food markets and childcare benefits.
Other low-cost perks include employee-recognition programs (with small rewards or prizes), points-based programs that let employees earn discounts or cash, gift cards and drawings/raffles. According to the Thomson report, businesses should be shifting to making benefits part of the everyday experience of working for the organization, and not just a reward for finishing their work.
Making your program work
According to a blog post by Thomsons' managing director Chris Bruce, 67 percent of 26- to 35-year-olds have the goal of buying a house. However, most benefit packages don't support this. Meanwhile, older generations are focused on saving for retirement, so not every benefits package is a one-size-fit all solution. Allowing employees to personalize their package to meet their own goals is a big part of increasing satisfaction with your benefit offerings.
High-deductible health plans can be supplemented with voluntary benefits, such as low-cost loans, Yaniga said.
"Empowering employers with the best benefits options will put them on a path toward higher retention rates, greater employee engagement and a more thriving workplace," he said.
Other popular voluntary benefits include wellness plans, telemedicine, pet insurance and financial advisory tools.
Use technology to your advantage.
Finding an intuitive, online portal that's easy for you and your employees to access and navigate is important to help them understand just what they can do with their benefit package. Making it easy to enroll and make changes down the line help employees feel in control of their benefits.
"Most traditional benefits, like medical and retirement plans, can be viewed and managed through online portals," said Shubat, whose company helps small employers digitize their benefits management. "The next wave is making all benefits and services available through digital platforms. Most companies don't have those tools in place right now, but it's becoming more and more common every day."
Technology can help employers' endpoints as well, by gathering analytics to better understand your employees needs and what's working, something that most companies aren't doing, according to Bruce.
Ask employees what they want.
About 76 percent of employees with benefits that meet their goals and priorities become advocates for their organization, according to Bruce. That's why Yaniga emphasized the importance of knowing your employees and finding out what benefits they really want.
"The more we understand about the benefit priorities of our employees, the more we can meet them at their priorities," Yaniga said. "Best-in-class companies build a great culture by applying all they know about their employees' priorities to their benefit structures."
Additional reporting by Nicole Fallon. Some source interviews were conducted for a previous version of this article.