Small Business Employee Benefits: How to Stay Competitive

January 26, 2024
Small Business Employee Benefits: How to Stay Competitive

In the fiercely competitive modern job market, offering employee benefits is more of a necessity for small businesses than a strategic advantage. Employee benefits play a crucial role in attracting and retaining top talent.

Small businesses are finding ways to provide health insurance as well as dental and vision coverage and other fringe benefits. It’s become increasingly common to offer options like:

  • 401(k) plans
  • Paid family leave
  • Flexible or remote working options
  • Fitness or healthy lifestyle incentives
  • Childcare benefits
  • Student loan repayment aid

Small business employee benefits have become more accessible, in part because of the development of HR outsourcing. In this article, we’ll look at:

  • Mandatory employee benefits
  • Dental and vision insurance
  • Retirement plans
  • Disability and life insurance
  • Work-life balance benefits
  • Tuition reimbursement
  • Strategic approaches to offering benefits

Types of Employee Benefits Small Businesses Can Offer

Small business owners can consider a long list of options when it comes to employee benefits. While companies can pick and choose what benefits they’d like to offer, some may be mandatory. These can include:

  • Medical insurance, for companies with 50 or more full-time equivalent employees, to avoid potential Affordable Care Act penalties.
  • Unemployment insurance, which supports employees who lose their jobs through no fault of their own
  • Workers’ compensation, which helps employees unable to work due to a workplace injury or illness
  • State disability insurance, which supports an employee who cannot work due to disability

Many small businesses elect to go beyond these requirements and offer benefits that cater to a wider range of needs. Here's a look at some of those benefits:

Medical insurance

Medical insurance is the foundation of any comprehensive benefits package. It provides employees with some protection against high medical expenses and helps them access quality healthcare. Small businesses may offer group health insurance plans. These generally are affordable health insurance plans that safeguard employee well-being and strengthen their financial security.

Dental and vision insurance

Dental and vision insurance have become essential components of employee benefits packages. They help cover routine check-ups and procedures as well as serious problems, promoting overall health and wellness. Including dental insurance and vision insurance in a benefits package demonstrates a commitment to employee well-being.

Retirement plans

Offering retirement benefits, such as a 401(k) plan, is a powerful tool for attracting and retaining employees. It allows workers to save for their retirement years and secure their futures. Small business owners can choose to match employee contributions. Not only does this support employees' financial security, but it also aids in long-term workforce retention.

Disability and life insurance

Disability insurance ensures that employees are financially supported in case of unexpected problems that hinder their ability to work. Life insurance, on the other hand, provides financial security to the beneficiaries of an employee in the event of their passing. Both offer peace of mind to employees, helping them secure their loved ones' futures.

Work-life balance

In today's hybrid working world, work-life balance is a crucial consideration for all employees. Small businesses can offer flexible work schedules to help employees manage their professional and personal lives effectively. This flexibility helps reduce stress and promote overall well-being.

Including benefits like paid time off (PTO), sick days, and vacation days is routine. It’s important to consider your industry and your employee’s workload when determining the appropriate amount of time for PTO.

Additionally, employee assistance programs can be offered to address mental health concerns, offering counseling services and support when needed.

Tuition reimbursement

Tuition reimbursement programs are an investment in employee development. Small businesses empower their employees to improve their skills and knowledge by offering to cover a portion of their educational expenses. This benefits the individual while building the company's skill set and competitiveness. It also instills a sense of loyalty among employees who appreciate the support in advancing their education and careers.

A strategic approach to small business employee benefits

To create a comprehensive benefits package that aligns with the changing trends in the industry, small business owners should follow a strategic approach.

First, consider surveying employees on their needs and wants as you develop a small business benefits package. Then see if you can go a bit beyond that. The more well-rounded the benefits package you create, the better you’ll be able to attract and retain satisfied employees.

It’s also possible to limit costs when assembling and administering an employee benefits program. Here are four things to look into:

  • High deductible health insurance coverage, where employees have more responsibility for medical expenses, can help balance affordability with quality coverage.
  • Health savings accounts give employees a way to save money tax-free for medical expenses. They also require enrollment in a high deductible health plan.
  • Telehealth options give employees a more convenient, less-expensive way to obtain care.
  • Business owners can factor in the payroll tax implications of health coverage as they try to optimize the overall cost structure.

Benefits and the bottom line

In today's competitive job market, employees actively seek out employers who offer comprehensive benefits packages. An investment in employee benefits can translate into a healthier bottom line for small businesses.

As you consider offering employee benefits, check out the exceptional health and retirement coverage options a small business can offer through TriNet. As a professional employer organization (PEO), TriNet's scale means your size no longer limits your benefits. Access top insurance carriers with great options for employees, their spouses and even their pets, plus perks.

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