Larger organizations have already been using the lure of better benefits to attract candidates. A new study shows that small businesses are joining the fray of the talent war by rolling out the best benefits they can muster.
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The physical, health, and financial security of 60 million Americans is linked to small businesses or firms with less than 50 full-time, permanent employees. More than four in 10 small business workers say they depend on their workplace benefits for financial security and agree their benefits positively impact their overall health, according to the 5th Annual Workplace Benefits Study, “Small Business, Big Benefits,” by The Guardian Life Insurance Company of America® (Guardian). With unemployment at its lowest levels since 2008, competition for talent is fierce—61% of small businesses aim to offer a better benefits package than competitors with this increasing even more among start-ups (70%) and high-tech firms (81%).
“The ability for small businesses to stand out in today’s marketplace is essential for growth and this study confirms that small businesses are using flexible work arrangements, wellness initiatives and benefits technology as important recruitment and retention tools,” said Marc Costantini, executive vice president, Commercial and Government Markets, at Guardian. “Creating a benefits experience that employees value allows small business owners to demonstrate they care about the well-being of their employees—which leads to stronger employee loyalty.”
Creating a Culture of Well-Being
Over the past 5 years, more small businesses have established flexible work schedules, telecommuting, and wellness programs to help employees improve their work/life balance. For small businesses already applying these practices in the workplace, the study confirms it makes a difference—55% of workers who feel their employer cares about their well-being want to stay at their company for 10 years or more compared to 33% who don’t believe their company cares. Women and Millennial small business owners placed even more importance on benefits that support workforce health, financial, and emotional well-being. For example, 66% of Millennial small business owners agree their company creates a culture of well-being versus 51% of Baby Boomer owners.
Benefits Boost Employees’ Financial Security
Small business owners are in a unique position to identify the needs of their workers on a more personal level. The study shows small firms know that workers rely on their workplace benefits for financial security, and that often money is a top source of stress for their employees. For a growing proportion of workers in high deductible health plans (HDHP), out-of-pocket medical costs are near the top of that list.
To help workers pay for expenses not covered by their HDHP, more employers are offering supplemental health coverage, up 20% since 2015. Additionally, since many employees feel their benefits are important to their household’s financial security, small businesses are responding with two of the top five benefits strategies including helping workers make better benefits decisions (53%) and increase employee financial education (44%) over the next 5 years.
Benefits Technology Makes it Possible
Cloud-based software has made human resources and benefits technology more accessible and mainstream to small businesses. In fact, the Guardian study found more than 50% of small businesses have digitalized a majority of their benefits process. Technology not only enables small businesses to enhance the employee experience but to help improve efficiency and compliance. Outsourcing benefits administration has also become an important benefits strategy for small firms. Roughly 30% of small business owners have increased their level of administration outsourcing in the last three years, and the trend shows no signs of slowing down. Twenty-four percent of small firms believe outsourcing will be a top benefits strategy in the next 5 years.
Adds David Poirier, national director of Small Group Sales at Guardian: “More and more people are looking to work for a company they feel cares about their well-being. As small businesses rethink their employee benefits strategy, we recommend evaluating what motivates their employees and work closely with a trusted advisor who is knowledgeable in key areas like benefits technology, voluntary benefits and compliance.”