Written by: Mike Alexander, Jr. – ABM Insurance & Benefit Services, Inc.
As a business owner, you probably understand that attracting and retaining talented employees is important to your company. Your employees are the life-blood of your business, and in order for them to be as productive and committed to their work as possible, you need to keep them satisfied.
It is easy to understand how things like the work environment you have fostered and the core values your company stands for can be selling points for potential employees, or how employees are attracted to competitive salaries, among other things. What you might not be aware of, though, is the importance of an employee benefit plan (EBP) in attracting and retaining workers. In fact, according to a recent study highlighted in Forbes, “increased recruitment competition” has created conditions where “organizations must leverage the benefits package they offer to their employees” in order to find the best talent.
Below is a quick explanation of EBPs and why they are important to a business, followed by a guide that will help small to medium-sized business owners develop competitive EBPs of their own.
What is an employee benefit plan?
Put simply, employee benefits are any compensation that employees receive for working that does not include their normal salary or pay. These benefits can comprise a range of services and provisions, but they are most easily understood as falling into 1 of 3 broad categories:
- Health coverage plans. Among the benefits you can offer your employees, health coverage is possibly the most important: One recent study, in fact, found that “over half of employees have said health insurance is the most important benefit that impacts their job satisfaction.”
A health insurance plan is a way to offer employees protection from the costs that a hospital visit or surgery might mean. Health insurance is a complex subject which requires expertise, however, and it is governed by specific laws and regulations. Especially if you are a small or medium-sized business, talking to an expert in health insurance plans for employers is recommended when crafting a health coverage plan for your employees.
- Ancillary health and disability coverage. Things like dental, vision and life insurance fall under this category of benefits. These kinds of insurance cover less frequently needed types of care, like a biannual visit to the dentist or a yearly eye exam. Nevertheless, ancillary health coverage is important, as the costs of dental and vision care can be prohibitively high for employees. When evaluating health benefits plans, prospective employees will certainly be aware of the ancillary insurance you offer. A comprehensive EBP also usually involves disability insurance, which is a benefit that can provide employees peace of mind should they be injured at work.
- Retirement plans, paid time off, and other benefits. You are probably aware of what a retirement plan is and what paid time off means. It is important for employees to feel secure in their jobs and incentivized to continue working, and these 2 kinds of benefits help provide that security.
Employee benefits can include a range of things in addition to those mentioned here. A gym membership you offer to employees would be considered a benefit, for instance, as would contributions you make toward an employee’s student loans.
Why should you prioritize creating an attractive EBP?
Now that you know what an EBP is, you may be wondering why you should bother offering one to your employees. In simplest terms, you should: Offering an attractive EBP is one of the most effective ways for your business to recruit and retain talented employees, among other advantages it represents. Here are 3 reasons why:
- Boost employee morale. As the adage goes, a happy employee is a productive one — and offering an attractive EBP is one of the best ways that you can keep your employees happy. According to a study from the Harvard Business Review, about 80% of surveyed employees said that they would choose an upgraded benefits package over an increase in salary, in fact.
Generous benefits will show your employees that you care about their well-being, and that you understand their needs outside of a basic salary. A retirement package is a powerful incentive for an employee to remain with your company, for example, and a simple perk like child care support can make a world of difference to an employee’s attitude and morale.
- Attract top talent. What do prospective employees look for when deciding where to make a career? Recent research has shown that, more so than even salary, prospects are concerned with the benefits they will receive — a 2016 Glassdoor study found that 60% of employees consider benefits a “major factor” in whether they accept a job.
Put simply, you want the most talented employees working for you, and one of the best ways to attract them is by offering a generous benefits package.
- Stand out from the crowd. As a small business owner, you certainly aren’t able to offer the salary incentives that a Fortune 500 company can — but that doesn’t mean you should resign yourself to running a less attractive workplace than those companies. One way to stand out from the competition is with your benefits package. An appealing EBP will not only help you stand out in your own market, but it might allow you to steal a top recruit from a much larger company — EBPs are simply that important to prospective employees.
Health benefits and legal compliance
Apart from the other advantages that an EBP offers your business, you need to be sure that your package is in compliance with state and federal law. Companies who don’t comply with laws like the Affordable Care Act can face fines or other penalties, like an audit by the Department of Labor.
Since health insurance laws are complex, consider contacting an expert in employee benefits for help. An expert will ensure you are offering health benefits in compliance with the law and at the lowest possible cost.
An attractive EBP doesn’t have to break the bank
As a small or medium-sized business owner, you may be thinking that the benefits of an EBP are well and good, but they aren’t affordable for a company like yours. This simply is not true. Not only will offering at attractive EBP save you costs in the long run by improving your employee retention and making your recruitment efforts more profitable, but the changing business landscape has made offering a benefits package affordable for even small businesses. You shouldn’t let the size of your company stop you from reaping the benefits of an attractive EBP.
ABM Insurance & Benefits can help
So, now you understand the importance of your employee benefit package: It is a major factor in attracting and retaining talented employees, and it helps you stand out from your competition, among other things. Moreover, the health insurance benefits you offer are governed by laws and regulations you need to be sure you are complying with.
Looking for help with crafting a benefits package, or ways to save money on insurance you already offer? ABM Insurance & Benefits has years of experience with saving owners like you on the costs of their benefits plan. Check out testimonials from owners we have helped, and contact us today for a free quote!