Paid vacation time continues to be the most widely offered benefit by small employers, hotly followed by personal time off and health insurance. But are these the benefits that employees truly favor?
Employee needs are changing — baby boomers are no longer dominant in the workplace, the recession has placed new impetus on financial security, and traditional benefit packages aren’t necessarily cutting it anymore. That’s the takeaway from a 2012 survey (PDF) of small business employees by MetLife titled, “Are You Listening? What Small Business Employees Want From Their Benefits, and How Employers Can Show They’ve Heard.”
So how can you ensure you’re on the same page as your employees and are offering benefits that reflect their wants and needs?
Tune In to the Generational Needs of Employees
Although younger employees now outnumber boomers in the small business workplace, it’s important to listen to the needs of all generations so that you can deliver a benefits package that is both relevant and provides value to all generations. Conventional employee benefits tend to reflect the needs of the boomer generation, yet a younger generation represents your employees of the future. According to the MetLife survey, only about a third of small business owners strongly agree that they strive to understand and meet different generational benefits needs.
On the other end of the spectrum, senior employees are increasingly delaying retirement. Sure, you get to hold onto that valuable talent a little longer, but this group will increasingly demand more robust healthcare plans and disability or critical illness insurance.
Talk to your staff to see what matters most to them, and don’t forget to make compensation for age, sex and other factors.
Don’t Overestimate Employee Loyalty
Assuming that your employees are happy and loyal to your small business is a huge mistake and puts your business at risk for one of its most expensive challenges – turnover.
MetLife reports that over a third of the small business workforce surveyed plan on moving to new pastures fairly soon, a percentage that rises to 42 percent for younger workers.
A strong and well-attuned benefits package can have a massive impact on worker loyalty — especially among younger employees.
Don’t Ignore the Impacts of Recession
The effects of recession can have a big influence on how an employee weighs their benefit priorities.
Whether they’ve experienced job losses, stagnant compensation, or just worked harder during the height of the recession — these experiences shape how they feel about their employers and their benefit packages. Likewise, as a result of economic conditions, employees are counting on benefits more than ever — and they’re willing to pay for them. According to the MetLife survey, younger employees (a group that has been hit hard by unemployment and under-employment) are willing to bear more of the cost of benefits rather than lose them entirely.
Build a Portfolio of Voluntary Benefits
While it’s unrealistic to expect small employers to compete with a Fortune 500 benefits package, there are a number of things that you can do to marry your workforce’s need for generational-specific benefits, financial security and the flexibility to customize and contribute to their own benefits plan.
A great way to do this is to offer voluntary benefits. These desirable programs are a great way to differentiate your business and give employees the option to build a package that meets their needs –- at no cost to you.
Voluntary benefits include options for life insurance, retirement, dental coverage, and short-term disability. But they can also get creative and include options for pet and home-owners insurance or legal services such as will writing or identity theft resolution.
Voluntary benefits work by giving employees the option to buy into these products through their employers at a lower rate than they could get on their own. They are also available at no cost to the employer. The employer simply acts as a channel between the employee and the insurance carrier or legal service provider.
Voluntary benefits are a great way of allowing employees to customize their plan to suit their circumstances and age-specific needs. Be sure to market them properly so that employees understand and appreciate what they’re getting. For example, bring in benefits counselors from insurance carriers, host lunch and learns, and make information available to employees online.
Get Affordable Healthcare Insurance through the SHOP Marketplace
If you’re a small business with fewer than 50 employees and want to offer health insurance as part of your benefits plan, take a look at the SHOP Marketplace. Brought about by the Affordable Care Act, SHOP offers you options for controlling the coverage you offer and how much you pay toward employee premiums. If you have fewer than 25 employees, you’ll also qualify for a tax credit when you buy insurance through SHOP. Learn more on Healthcare.gov.
Talk to Your Employees About Government-Backed Retirement Plans
We all want to build a nest egg, and later this year the Department of the Treasury is making it a lot easier for middle- and low-income individuals who don’t have access to employer-sponsored retirement plans to start investing. With the launch of government-backed retirement accounts – called MyRA – employers will be able to offer employees the equivalent of a Roth IRA which allows savers to invest after-tax dollars and withdraw the money tax-free after retirement. However, unlike traditional Roth IRAs, the accounts are invested only in government savings bonds. They are also backed by the U.S. government, so your employees will never lose their principal investment.
Employers aren’t required to contribute or administer the plan and employees can contribute as little as $5 at a time through payroll deductions.
If you’re interested in offering your employees the opportunity to save for retirement, but don’t want the cost or hassle of administering a plan, take advantage of the numerous resources on the MyRA website to help promote the program to your employees.
Get Help Fine Tuning Your Benefits Program
Aside from voluntary benefits, there are many non-traditional benefit packages that small businesses can offer at a relatively low cost. From supplementing tuition costs to employee discounts — talk to your employees about their needs. Then spend time with a benefits or insurance broker to find the right packages for your workforce and budget. Make a pledge to promote and keep the lines of communication with your employees and prospects open. Benefits are a big deal. Treat them that way.
And, don’t forget…
Whatever benefits you put in place, remember that employee loyalty doesn’t entirely hinge on vacation days or a low healthcare insurance deductible. The number one reason for employee loyalty continues to center on manager-employee relationships – so be sure to invest in those too.
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