Small businesses want to do the right thing by their employees when it comes to benefits, but… it’s a challenge. Between the health inflationary rate of 11 to 15 percent, and the cost to implement and keep the program going, some business owners conclude that employee benefits is not a sustainable proposition.
Are you on the fence about offering benefits to your employees? Here are a few things to think about.
- Start with the obvious: A competitive benefits package will help you attract and retain employees.
- You can create a tax advantage by deducting plan contributions (including health and life insurance and pension plans) and generating tax free dollars for employees.
- If you give employees better benefits, studies show they’ll forego higher salaries – and the business will save.
- Your business will improve as a function of decreased absenteeism and better employee health and morale – not to mention the greater likelihood that your employees will seek preventative care and take better care of themselves.
- Fallacy #1: It costs more for a small business to offer employee benefits. It doesn’t have to. For example, flexible plans – think Health Care Spending Accounts (HCSAs) – are increasingly popular among small businesses. A company can budget exactly how much they want to spend and allocate these dollars accordingly.
- Fallacy #2: administrative costs will limit your choices and add to your overhead. Benefits providers understand the burden a healthy benefits plan can put on small employers – it’s led many to cater to them with HR and other support tools and services that remove some of the pressure. Technology, in and of itself, can also create tremendous efficiencies and cost savings.
- Fallacy #3: Rising health care costs make it impossible to sustain a benefits program. You can cap your contribution and control your overall expense. There are flexible options even for small businesses which allow employees to choose from various benefits that meet their needs. There can be a fixed dollar contribution from employers. The richer the benefits desired by employees, the more of their own money they contribute.
There’s no time like the present for small businesses to get off the fence about their employee benefits plans. Doing the right thing for your employees will ultimately pay off with returns you can bank on.