Smaller businesses and entrepreneurs with budding startups usually struggle with day to day operations of running their company. The idea of offering an excellent benefits package and voluntary benefits isn’t a priority since their goal is to hit growth milestones instead. Running a small business usually involves cutting costs here and there to make do with limited capital – additional incentives such as voluntary benefits sound too expensive on paper… until you sit down with a benefits consultant to learn that it’s simply not true.
Voluntary benefits provide your small business with a cost effective solution to attract top talent from competitors with deeper pockets. In other words, voluntary benefits actually even out your odds against larger companies that provide ludicrous benefits, i.e. a free hair cut at Google.
We’ve rounded up 4 reasons why you should start offering voluntary benefits to overhaul your overall package to attract employees.
1) It Won’t Cost You – the Employer – a Thing
The idea behind voluntary benefits is that they are paid for by employees, in part or fully. Employers don’t have to worry about committing financially committing to something they can’t afford. This can be a very advantageous feature for employers. Any administrative costs are usually offset by the tax savings made through the IRS Tax Code.
2) Minimize Health Insurance Costs for Employees
Because they tend to have smaller budgets, small businesses constantly worry about health care costs. Besides, health insurance costs tend to rise each time Washington passes a new legislation, further destabilizing the healthcare market. But small employers can still provide their employees cost effective health insurance in a way that their benefits package appears more attractive. They can provide high-deductable plans such as long and short term disability, vision and dental coverage and hospital indemnity – all of which can be seen as extra bells and whistles that can sweeten their overall employee package.
3) It Is Good for Productivity
Happier employees are more productive because they have access to more benefits at lower premiums than if they tried availing on their one. Voluntary benefits eliminate the lingering worry in every employee’s head about an uncertain future, such as an accident, life threatening illness, and long term disability.
Free of such worries, employees have an elevated sense of security and reduced stress. This leads to being happier in life and of course, higher productivity.
4) Higher Retention
It is more costly to hire and train a new recruit than to retain an employee with a consistently good record of productivity. Worse still is the fact it can take a long time to fill a recently vacated position, almost to the tune of 40 days. The higher cost and complex rehiring process means that you’re better off retaining your employee in the short and long run. Higher retention rates can be extremely important small business owners because top talent is hard to come by. Voluntary rates increase the perceived benefit of an employee’s overall package, increasing retention rate.