Advice for Small Businesses on Adding Employee Benefits for the First Time
To provide the best advice for small businesses venturing into offering employee benefits for the first time, we sought insights from ten industry leaders and professionals. From executive coaches to CEOs, their diverse perspectives offer a wealth of knowledge. From asking employees about preferred benefits to controlling costs with creative benefit solutions, this article provides a comprehensive guide for your journey.
- Ask Employees About Preferred Benefits
- Start Small with Benefits
- Tailor Benefits to Employee Needs
- Consider Unique and Supportive Benefits
- Take a Democratic Approach
- Seek External Help for Benefit Introduction
- Prioritize Tax Advantageous Benefits
- Focus on Basic Benefits First
- Choose a Scalable Benefits Plan
- Control Costs with Creative Benefit Solutions
Ask Employees About Preferred Benefits
One of the considerations that I advise my clients to think about is asking their employees what benefits they would prefer. Often, I experience a business owner making decisions without considering what the staff would appreciate.
For one client, I surveyed the staff, and the owner was surprised at what the employees really wanted. What they said they would find useful was much less expensive than what was being recommended by a benefits company. “Ask” is a powerful word when put into practice.
Lorraine Lane
Executive and Business Coach, Lane Business Consulting
Start Small with Benefits
As a small business, we’ve definitely had these conversations over the last few years. We wanted to offer benefits to our contractors and employees but knew that we didn’t have the budget to do so.
So, we started small. We started with PTO, and over the years, as our business became more financially stable, we introduced private healthcare stipends, 38 days of paid time off, and occasional equipment stipends.
Gordana Sretenovic
Co-Founder, Workello
Tailor Benefits to Employee Needs
The best piece of advice for small businesses looking to offer employee benefits for the first time is to truly understand the needs and preferences of the employees. Engage with the team, survey them, and have open discussions about what benefits would most appeal to them.
Tailoring the benefits package to match the unique needs and demographics of the workforce ensures that the benefits are meaningful and appreciated. Beyond health insurance and retirement plans, consider benefits that align with the company’s culture and values, such as flexible work hours, professional development opportunities, wellness programs, or even pet insurance.
A well-designed benefits program is not just an expense, but a strategic investment to attract, retain, and motivate talented individuals.
Derek Sall
Founder of Life and My Finances and Financial Expert, Life and My Finances
Consider Unique and Supportive Benefits
Offering employee benefits for the first time is like navigating a bustling bazaar. It’s vibrant and chaotic, and without careful consideration, you might not get what you need. Don’t just follow the crowd. Traditional benefits are crucial, but they’re just the start.
Consider your benefits package as a mixtape for your employees. Include the classics, but also the deep cuts that show you understand your team’s needs. Consider financial-wellness programs, teaching employees to manage their money, reduce debt, and save. It’s a benefit that keeps on giving.
Also, think about unique benefits like backup care for employees with dependents. This can reduce absenteeism, boost productivity, and improve loyalty.
The goal of your benefits package is to create a supportive work environment. So, don’t be afraid to think outside the box. The best mixtapes aren’t just top 40 hits; they’re the ones that surprise and delight us.
James Allen
Founder, CPA, CFP, CFEI, Billpin.com
Take a Democratic Approach
For startups and small-business owners, polling your team is recommended. Harness the power of your employees’ voices and let them decide what benefits matter most to them. This approach offers a twofold advantage: it demonstrates your genuine value for their input and shows that you prioritize their well-being.
This strategy has been found effective for startup companies. Simply ask your team what benefits they would like to have. Even if you can’t provide every benefit immediately, this democratic approach helps you understand the future benefits that would be most appreciated when your resources align with those possibilities.
Samantha Hawrylack
Founder, How To FIRE LLC
Seek External Help for Benefit Introduction
Managing all aspects of payroll and HR might seem a bit daunting at first. A benefits consultant or a professional employer organization (PEO) can really come in handy here. Such resources not only save you time but also alleviate a lot of uncertainty.
It’s like having a guiding hand to navigate the complexities. So, definitely consider external help when introducing employee benefits for the first time.
Amar Ghose
CEO, ZenMaid
Prioritize Tax Advantageous Benefits
Prioritize benefits that provide a tax advantage and add value to your employees, regardless of participation.
One example of a huge benefit to owners of a small business is a retirement savings plan, such as a 401(k), SIMPLE IRA, or Individual Retirement Account (IRA). This benefit not only helps employees secure their financial future but also serves as a valuable tool for attracting and retaining talented individuals. This is also a significant wealth-building tool for the business owner.
Allison Dunn
CEO, Head Business and Executive Coach, Deliberate Directions
Focus on Basic Benefits First
It doesn’t make sense to get too creative with benefits if you can’t get the basics right. In a U.S. context, that means focusing on the healthcare offering, which is the closest thing to a universal expectation. From there, focus on optimizing vacation, sick, and bereavement time. If you can nail these basics, you’ll be much more credible in proposing creative benefits, because your team will already know you have their best interest in mind.
Trevor Ewen
COO, QBench
Choose a Scalable Benefits Plan
There are quite a few offerings on the market for small businesses, but significantly fewer ones that are able to grow along with your company.
Often, this means that you will have to switch providers or plans, which can be both confusing and expensive. By doing your research in advance and finding a plan that can scale for at least a little while, you are going to save yourself a lot of hassle in the long run.
Kate Kandefer
CEO, SEOwind
Control Costs with Creative Benefit Solutions
The costs associated with employee benefits are one of the areas that small businesses struggle with the most. It impacts their bottom line, and they compete for talent against bigger companies with a robust benefits package. Employees want to have benefits available to them, even if they must share in the cost. Health insurance is one of the highest costs, but a business owner can control the cost-sharing.
Consider offering supplemental benefits such as life insurance, accident insurance, and short-term disability, which can be at no cost to the employer. A business owner can also be creative in partnering with local businesses to provide discounts to their team. Lastly, highlight all the benefits offered, including paid time off for holidays, sick leave, jury duty, bereavement, and any other paid time off offered.
Kimberly Bogues
Founder/CEO, Flourish Business Consulting
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