Last updated on March 25th, 2024 at 05:04 pm
The average small business hires fewer than 20 employees, which is far below the employee threshold for most federally-mandated benefits. However, to remain competitive and reduce turnover, small business owners should still offer attractive benefits packages to their employees. Companies can choose from a range of financial and creative perks to show their appreciation for their workers.
Ownership Interest
Small businesses need committed and passionate employees. One way to increase engagement is by connecting an employee’s compensation directly to the company’s revenue.
For example, businesses may opt for a profit-sharing plan that distributes a portion of the company’s earnings as bonuses or retirement plan contributions. Since profit-sharing plans are often allocated based on tenure, employees are incentivized to stay with the company and contribute to its growth.
Many early-stage startups also offer stock options to attract top talent. Knowing their hard work could potentially result in a multi-million dollar payout will inspire employees to build the business into the next Facebook or Amazon.
Wellness Programs
While businesses employing fewer than 50 employees are not obligated to provide health insurance, many do. However, if offering a fully-funded or self-funded health insurance plan isn’t viable, companies can still give benefits and incentives that support their employee’s health. Wellness programs are also a supplement to health insurance plans, as they can reduce medical costs for both employees and their employers, and even be funded by a lifestyle spending account. Click here for more information.
Small companies can collaborate with local gyms to offer discounted memberships or host in-office or virtual classes. Employer wellness programs can also focus on preventative care by enabling employees to purchase in-home diagnostics exams. With these programs, employees can request multiple types of medical screenings, such as a FIT test for colon cancer, from the comfort and privacy of their homes.
Other wellness benefits include offering free healthy snacks at the workplace or paying for subscriptions for health apps like the meditation tool Headspace or the fitness tracker app, Welltok.
Flexible Workplaces
Since the pandemic made remote work mainstream, flexibility has become one of the most desired benefits amongst employees. While small businesses must consider their business models, most companies can give employees some kind of autonomy over their work process.
Allowing employees to select their start and stop times is a simple way to increase flexibility without making large structural changes. For example, employees can start anywhere between 7 and 10 am as long as they complete their assigned work hours.
The ability to work outside of the office is another highly popular benefit. Companies can invest in project management tools and software that enable employees to conduct their work from anywhere. Not only will this boost productivity and morale amongst current employees, but it also allows the company to search for new hires from a wider talent pool.
Professional Development
Employees are more likely to remain with an employer that offers paths for promotion. While it can be difficult for a small business to offer the kind of career progression common in large corporations, companies can offer competitive professional development opportunities.
Establishing an internal mentoring program to connect new and experienced employees can educate workers while strengthening the company culture. Likewise, small businesses can open a corporate account for an online learning platform and allocate work time for employees to earn industry-relevant certifications.
As employers are increasingly aware of the magnitude of the student loan crisis, a growing number of small businesses are now offering tuition reimbursement plans that include loans for completed degrees. Thanks to the 2020 CARES Act, employers can pay up to $5,250 per year of their employees’ student loan balances tax-free until 2025.
Give Back Programs
Not all employee benefits are monetary or tangible. In fact, employees care just as much about a company’s values and community contributions as they do their compensation package and benefits.
Small businesses can showcase their values through give back programs. For example, companies can encourage their staff to volunteer by offering paid time off to do community service. Small businesses can also support their employee’s causes by matching donations.
Employers can also incorporate service and giving back into the company culture by arranging group volunteer activities. Many small businesses organize teams for fundraising events like charity runs or golf tournaments.
As not all nonprofits have the capacity to host fundraisers, companies can also develop grant programs that donate a set contribution for every hour of volunteer work their employees perform.
