Health and safety concerns, the high costs of medical care, and labor challenges across all industries have put health coverage and other benefits in the spotlight, especially as finding (and retaining) employees becomes a challenge.
In fact, 43% of companies with fewer than 50 employees and 64% of companies that have between 50 and 499 employees agreed that finding qualified employees was a top challenge, according to research from ADP. Of this group, about 18% said putting together a competitive offer package is a primary reason why they can’t win over top talent.
Compelling benefits programs can go a long way toward making employees feel supported and valued. They also can be a magnet for attracting top talent. While small businesses do not face the same mandates regarding health coverage that large employers (those with more than 50 full-time or full-time equivalent employees) do, the payoff from offering benefits can be well worth the cost.
John Pask, Co-founder and Managing Partner at GoBenefits, a Dallas-based firm that provides insurance for restaurants, has seen this firsthand. “Operators come to us every day looking to offer benefits because they understand employees have a choice on where they can work and they see they need to offer benefits to recruit and retain employees,” he said.
Knowing the Job Hunters
Clinton Wolf, Senior Vice President of Health and Insurance Services with the National Restaurant Association, explained that smaller companies need to remember that they’re competing in the talent pool with larger employers. “You might be able to match on salary, but the large employer is offering benefits, too.” Management-level employees, in particular, frequently list competitive salary and benefits atop their priority list when job hunting.
Increasingly, though, part-timers are also seeking benefits, keenly aware of the leverage they wield in the labor market. Pask reported an uptick in part-timers seeking health coverage as well as vision, dental and even supplemental life products. “Offering a comprehensive package to every employee is taking on a lot more precedence these days,” Pask said. “The focus is no longer on the manager level and above.”
That reality leaves smaller employers in a notable quandary: either invest in a health coverage program that boosts one’s profile amongst job candidates or risk losing qualified talent to larger employers.
Understanding Options
Some small business owners may not fully understand what’s involved in setting up a health insurance program. For example, some assume they must pay 100% of every employee’s insurance when, in fact, the minimum is generally 50% per employee. In addition, not every employee needs to enroll.
“I talk to operators all the time who say, ‘I’ve got 20 employees and can’t afford to give them all healthcare,’” Wolf said. “Once they learn that only seven of their employees would even want to enroll and that they share the costs, they realize health insurance is more affordable than they thought.”
Operators should survey their staff and discover how many people would be interested in enrolling in a health plan, Pask recommended. If only a small number express interest, it’s unlikely the business would meet participant requirements for a group plan. “If you have a lot of 18- and 19-year-olds and a small management team, then health insurance might not be in high demand,” Pask said. “Those individuals might be looking for alternative perks or benefits beyond healthcare and competitive compensation.”
However, if there’s greater appetite among staff members for health coverage, then investigating a group plan would make sense. Businesses might look for programs offered by a local chamber of commerce or professional association. “These programs allow employers to band together and look like a much large employer to get better rates and plan options,” Pask explained.
Many of these organizations will offer many different health plan designs. Pask noted that this variety is important because employees will inevitably have different healthcare coverage needs and priorities based on their unique circumstances. “Much like ordering a pizza, some want anchovies and others want pepperoni,” he said. “You don’t want to offer just one plan because there’s no universal solution for everyone. Offer multiple plans and give employees a defined contribution alongside a digital platform that makes it easy for them to shop.”
How to Get Started
Wolf suggested that small business owners get a quote from a broker and make sure the required employer contribution is feasible before revealing potential options to staff. “Find out what it’s really going to cost you and make sure that’s doable,” Wolf said. He added that purchasing employer health insurance is a business expense that will reduce one’s taxable income.
And remember, you can set up a health coverage program at any time; you don’t have to wait for the start of the year. “In fact, you’ll probably get more attention creating your program later in the year when fewer people are looking to get programs going,” Wolf said.
Explore Perks Beyond Health Benefits
As important as health insurance remains, other benefits can help small business owners attract and retain team members. “People always like getting something extra,” Pask noted.
For example, employers can add dental and vision as well as basic life insurance packages to healthcare programs, along with 401k retirement savings plans, retention bonuses and parental leave to woo talent.
Financial wellness programs can also be a draw, with employers providing access to financial coaching, student loan assistance, education reimbursement or emergency savings help to drive employee health, engagement and loyalty.
