Small businesses play a crucial role throughout the United States, often being called the backbone of the American economy.
And the success of these small employers is often tied to the workers they choose to hire, which has become increasingly more difficult as competition for talent has grown fierce.
Additionally, small companies face the challenge of having their best employees taken away by growth-oriented small businesses and even large, national organizations.
These are why the pay and benefits small employers offer
have never been more important, and a report from QuickBooks uncovered some important findings that small business owners and their benefits brokers will want to see.
The Small Business Pay and Benefits Report 2018
Earlier this year, Intuit/QuickBooks surveyed more than 1,000 employees of companies with 20 or less workers for their Small Business Pay and Benefits Report 2018
The goal of the survey was to uncover data and findings to help small businesses better recruit and retain talent in 2018 and beyond.
The first statistic from the survey showed that 43% of small business employees
want to change jobs within the next 2 years. This is interesting when looking at job satisfaction data that was found:
- Very satisfied with current job – 25%
- Satisfied with current job – 51.30%
- Dissatisfied with current job – 17.50%
- Very dissatisfied with current job – 6.10%
Additionally, just 12.9% of respondents said they would like to stay with their current employer until their retirement. This further shows how hard employee retention is today
and will likely only become more challenging in the coming years.
Next, employees were asked why they wanted to change jobs within 2 years. Here are their top 6 responses:
- For better career opportunities – 18.04%
- Currently underpaid – 16.34%
- To reduce stress levels – 12.77%
- For a more flexible work schedule – 9.46%
- Currently undervalued – 9.11%
- Current benefits are not competitive – 7.59%
Employee Compensation in the Small Business Market
We have written before about just how important compensation is for employees today, especially when it comes to retention. In fact, a different survey by QuickBooks showed that 74% of employees prefer getting more money over more paid time off.
In the Small Business Pay and Benefits Report 2018, employees were ask how they felt about their current compensation:
- I am overpaid – 4.20%
- I am fairly paid – 48.30%
- I am underpaid – 47.50%
It could be a cause for concern for small business owners than almost 48% of employees feel underpaid, especially when compared with the next statistic. When asked if their pay is keeping up with the cost of living, 64.80% said no
This concern plays a large part in the decision for employees to seek new job opportunities, as they feel switching roles is the best way to increase
Additionally, when asked why they were underpaid, employees listed these as the 3 main reasons:
- Skills aren’t recognized and rewarded properly
- My employer purposely keeps low wages
- High-paying jobs are scarce
Despite these concerns, 74%
of small business employees said they did receive a raise this year.
Employee Incentives and Benefits
Some smaller employers aren’t in a position to hand out significant raises to all their employees. However, there are other, more cost-effective options available to incentivize employees
. Here are the top five according to employees:
- Flexible work schedules – 76% want this, but just 18% receive it
- Performance-based raises – 73% want this, but just 10% receive it
- Discretionary bonuses – 66% want this, but just 7% receive it
- Recognition awards/prizes – 63% want this, but just 7% receive it
- Ability to work from home – 57% want this, but just 8% receive it
Next, the survey dove into employee benefits and found that 54.70% of small business employees would accept a job without benefits.
Employees were also asked if certain employee benefits were important to them or not. Here are the percentage of respondents who said they were important:
- Healthcare – 61.40%
- Flex working schedule – 53.10%
- Dental – 48.30%
- Retirement – 47.60%
- Sick leave – 45.70%
- Vision – 38.60%
- PTO – 33.50%
- Working from home – 31.00%
- Paid leave – 26.50%
- Wellness benefit – 26.10%
- Spouse/partner benefits – 23.50%
- Career development & training – 19.00%
- Childcare support – 13.60%
Additionally, the survey uncovered the most popular benefits that small business employees are currently receiving. Here are the top benefits, along with the percentage of employees who say they are offered them:
- Flexible working schedule – 81.90%
- Healthcare – 80.10%
- Dental – 72.30%
- Sick leave – 71.20%
- Vision – 70.30%
- Retirement – 68.10%
- Paid leave – 62.90%
- Wellness benefits – 62.80%
- PTO – 62.20%
- Childcare support – 45.50%
Small Employers Need to Carefully Examine Compensation to Compete for Today’s Talent
Employees are aware that it is currently a job seekers market. This means that those looking for jobs have more power and options than ever before.
For employers, this shift has caused a lot of disruptions to recruiting/retention strategies
as what worked in the past no longer meets the expectations of top talent.
Continuously re-evaluating compensation and benefit packages is incredibly important, especially for small business leaders.
Doing so can help to spot areas that can be enhanced to keep up with the demands of today’s workforce, and ultimately lead to higher retention and better recruiting results!
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