When running a small business, you’re competing with corporate companies who have it all – a large HR department, higher salaries, and a richer benefits package. Some days it may feel like you just can’t compete. On those days, keep this statistic in mind:
99.7% of employers in the U.S. are small businesses.
Without you, it wouldn’t be the same.
How the right benefits offering can help you recruit and retain top employees
Worried your most valued employees are about to jump ship to a larger corporation with a richer benefits package? How will you compete?
Even if you can’t offer as high of a salary as a big company, you can attract and retain top talent with a great benefits package. In a recent survey, Glassdoor found that 80% of employees would choose additional benefits over a pay raise.
What benefits are employees expecting their employer to provide?
In a July 2016 study of 2,000 employees, Fractl found that better Health, Dental and Vision benefits are most important to job seekers.
Second in line comes more flexible work hours, followed by more vacation time and work-from-home options. The good news is these secondary benefits don’t cost you a fortune. If you’re worried that giving higher flexibility to employees will mean a loss in productivity, think again. When employees are happy, productivity increases and turnover decreases.
“Engaged employees make it a point to show up to work and do more work — highly engaged business units realize a 41% reduction in absenteeism and a 17% increase in productivity. Engaged workers also are more likely to stay with their employers. In high-turnover organizations, highly engaged business units achieve 24% less turnover. In low-turnover organizations, the gains are even more dramatic: Highly engaged business units achieve 59% less turnover.” Gallup
Aside from health insurance and flexible hours, employees also value benefit offerings such as a 401k, life insurance, telemedicine, an employee assistance program, and supplemental benefits.
This all sounds great – but what does this mean for employers who are struggling to afford benefits? The fear of losing valuable employees increases as more small business owners are having to cut benefits due to extremely high rate increases year after year.
Dealing with the rising cost of healthcare
Recent studies have shown that healthcare is one of the highest expenses, if not the highest expense, for small business owners. Here are some of the challenges:
- The small group marketplace has less buying power than large corporations.
- It’s getting to the point where small business owners can’t afford to offer benefits.
- Because of increasing healthcare rates, small business owners are offering employees a less rich benefits package and it’s costing them more money.
Every year, the rates go up and the cost of supplying benefits to your employees puts more and more stress on your bottom line. You may have considered removing employee benefits all together.
“Healthcare is the most out of control cost for any business. It is also the number one reason for a person to file bankruptcy, and 75% of these people who file have health insurance. There are no benefits in healthcare anymore. The longer you are on your plan, the coverage only gets worse under the current model.” Bob Kohnle, CEO & Founder, Aliat
So how do you save your business from drowning in the cost of employee benefits?
The one thing that helps any successful small business stay ahead is the ability to think outside the box. You started your business because you are inventive and proactive. You’re an entrepreneur. You also know that to have a successful business, you must attract the right employees.
A better option for struggling small business owners
There’s an innovative solution to the small business healthcare epidemic, and it’s sweeping across the United States. Over the past 30 years, the use of Professional Employer Organizations has grown substantially. An estimated 2.7 to 3.4 million employees benefit from their services.
So what exactly is a Professional Employer Organization (PEO) and how does it work? It’s a fairly simple concept.
Think of a typical day at the office. Two types of tasks come across your desk. Profitable “money making” tasks and administrative “time sucking” tasks. When you partner with a PEO, you offload certain administrative responsibilities – like employee benefits, HR, risk and compliance – so you have more time to focus on the profitable parts of your business.
A PEO is essentially a large company that pools together small and midsized businesses to make them an administrative powerhouse and give them the buying power of the big guys. Imagine if you had 1,000 employees. Would your benefits offering be different? Would your HR practices improve? Would you have better technology systems in place? You bet you would.
When small businesses outsource to a Professional Employer Organization (PEO), employees gain access to Fortune 500 benefits at a price that doesn’t kill the business’ bottom line. Small business owners gain back more time in their day and see reductions in total operational costs. According to a study by noted economists Laurie Bassi and Dan McMurrer, companies working with a PEO “grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business.”
Aliat is a PEO that guarantees the highest quality healthcare and the most affordable rates for small to mid-sized businesses, and provides additional health and wellness resources for both employers and employees. Their mission is to help business owners provide better benefits packages so they can attract and retain top employees, and keep them happy, engaged, and heathy. No matter what challenge you’re facing, we’re your small business ally. Request a consultation and we’ll help you find a benefits solution that works for your business.