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As a small business, you may operate with a smaller budget and fewer resources. But how you care for your employees is just as important to the overall success of your business as it is to a large enterprise.
In a 2020 survey, seven in 10 employees said they needed their employer’s help to ensure their health and financial security. Offering a comprehensive benefits package can alleviate many of the concerns your employees may have and add a critical sense of security to their lives. Benefits also show how much you value your employees and their well-being. Just as important, it can help turn your business into a more desirable and competitive place to work.
As you weigh your options, here are some of the most important reasons why you should offer benefits, along with a summary of the benefits every business is legally obligated to provide. We’ll also talk about how an HR partner can help you come up with a benefits plan that’s right for your business and employees, and ensure you meet your legal obligations.
Your employees lead complex lives. They have multiple responsibilities — at work and at home, to other people, and to themselves. And they have to navigate change and uncertainty just like the rest of society. When your employees have what they need to function on the job and at home — no matter what life throws at them — they become healthier, happier, and more productive.
But providing employee benefits isn’t just about helping your workforce. It also helps you as a business leader.
The type of employee benefits you offer can help make your business more attractive to job candidates. If you’re trying to build a new team from the ground up, or add to your existing team, a good mix of relevant benefits and value-added perks — such as flexible work hours, remote work options, student loan or tuition assistance, and/or a fitness and wellness allowance — helps bring quality workers in your door so you can meet your business goals. With a talented team on hand, you can raise the stature of your business in your field or industry, which further attracts top talent and keeps the cycle going.
Having access to good benefits makes your employees feel valued and more satisfied at work. Satisfied employees are more loyal to your business and less likely to leave. And when you have a whole team of satisfied, loyal employees functioning well, your business achieves a level of stability and low turnover that’s key to efficiency and growth. New and experienced employees aren’t suddenly quitting and causing disruptions to workplace dynamics and productivity. Instead, employees want to stick around for each other and teams are able to collaborate effectively.
When your employees aren’t constantly worried about what’s happening outside work — whether they can afford a medical procedure or if they’re saving enough to buy a house — they have more focus and dedication to give to the job. A good benefits package frees employees to become more personally invested in their day-to-day responsibilities and the overall success of the business. Some benefits can even have a direct impact on how well employees perform, such as providing an office supply stipend or childcare assistance specifically for remote workers. Invested, productive employees are also likely to see opportunities for improvements and innovations that can take your business to the next level.
The needs of employees might appear vastly different today than just a few years ago. Coming out of the pandemic, traditional benefits like health insurance and 401k plans are still tremendously valuable, but the last couple of years have uncovered new demands and priorities that are increasingly important to working people. For example, if your employees are struggling with work-life balance and asking for more flexibility, coming up with benefits that address this need shows that you’re willing to adapt your business to the current reality. Recognizing, instead of ignoring, the challenges that exist today and responding to them can help reduce the stress and burnout that eventually lead to poor employee morale and high turnover.
Before you consider perks like pet insurance or financial planning assistance, remember that there are basic employee benefits that your business is legally obligated to provide its employees. Make sure you factor those into your discussions first so that you’re meeting compliance requirements.
Here’s a quick review of required employees benefits at the federal level:
And if your business has 50 or more full-time employees, you must also provide:
Here in Colorado, you are obligated to provide paid sick leave to all employees regardless of the size of your business, as well as a special provision of two weeks of paid sick leave if there is a public health emergency that involves the closure of schools, workplaces, and childcare facilities, such as what occurred during the COVID-19 pandemic.
Laws and regulations that impact benefits obligations can change often at the federal, state, or local level, so it’s critical to stay on top of what’s happening and implement new or changing laws correctly and by the stated deadlines.
Part of any discussion about employee benefits for small businesses has to include a financial component. Depending on your resource and budget constraints, it may not be financially feasible for your business to offer every trendy or desirable benefit. And some perks — such as flexible work hours and remote work options — may not be conducive at all to your particular business. Delineating between the must-haves and the nice-to-haves is important so you can settle on a cost-effective, competitive benefits package that makes sense for your business, while still offering value and relevance to your workforce.
Working with a local HR partner like Obsidian HR you get expertise in benefits administration and employment laws. For example, we can strategize with you and help put together a comprehensive benefits package. We can also help you understand, set up, and administer mandatory state and federal employee benefits. Our experts can also keep you informed about new and changing regulations that could impact the benefits you offer. With our support, you can ensure you’re covering all your bases when it comes to taking care of your employees.
Ready to learn more about how Obsidian HR can help you? Reach out to us, or download our comprehensive benefits guide below.