How Important Are Benefits to Small Business Employees?

Nov 19, 2019
| Michael Altiero
How Important Are Benefits to Small Business Employees

How impactful are employee benefits and perks when workers are deciding on a potential employer? Various studies have shown that benefits do play a critical role with job seeker decision making and can even cause employed individuals to seek new opportunities.

As the modern workplace continues to change, emerging employee benefit trends become necessities for employers looking to remain competitive for top talent.

But small employers often face greater challenges when exploring strategies to enhance benefit offerings, especially with determining which perks to add.

A new survey by QuickBooks provided insights into which benefits small business employees want and how they currently view workplace perks.
 

Which Benefits Do Small Business Employees Want?

The results show that the most common employee perk is paid time off, with 57% of workers using PTO for vacations. However, just 48% get paid sick leave and only 14% are allowed paid time off to bond with a new child.

Another interesting finding is that among small business employees, it appears years of service play a role in PTO offerings. Employees 39 and older were more likely to get PTO perks than those who were 18-38 years old.

Next, the survey reveals some of the more popular benefits offered by small employers:
 
  • Health insurance – 56%
  • Dental insurance – 41%
  • Vision insurance – 35%

A majority of employees (66%) say they enjoy the health benefits their employer offers. However, many wish they had access to retirement benefits. According to the survey, just 41% of small business employees were provided with a 401(k) or pension. 

Adding retirement benefits are one strategy that small business owners can explore to help stand out to job seekers and boost recruiting strategies.

The survey also showed the modern benefits and perks that employers are offering to keep up with employee expectations:
 
  • Free food and drinks – 36%
  • Flexible hours – 23%
  • Remote working – 13%
  • Childcare assistance – 12%
  • Paid expenses and fitness stipends – 9%
  • Student loan reimbursement – 4%

The reason this is important for employers is that 61% of small business employees said they feel cared for by their employer if provided these types of benefits and perks, which helps to lower turnover.
 

What Do Small Business Employees Think of Their Employer’s Benefit Offerings?

The competition for job candidates is at an all time high, which is why small employers have to offer high-quality benefits. But are businesses successful at this?

The survey showed that the majority of small business employees are happy with their benefits, but some concerning results were revealed:
 
  • 39% are not satisfied with their current benefits
  • 29% say their company provides the bare-minimum benefit offerings
  • 39% believe their benefits are better than the majority of their peers
  • Just 6% say their company’s benefit package goes above and beyond

And if small employers aren’t offering any common benefits, they could be in trouble. 41% of employees said they wouldn’t work for a business that didn’t offer health insurance, paid vacation, sick days, retirement plans, or dental insurance.

Last, the survey asked employees how they would view an employer who didn’t offer must-have benefits. Here are some of the top responses:
 
  • The business does the bare minimum – 48%
  • They don’t care about their employees – 44%
  • This employer is cheap – 44%
  • I wouldn’t work for this employer – 41%
  • The business is behind the curve – 34%
  • The company has a poor culture – 31%
 

How Do Benefits Impact Retention and Recruiting?

The next part of the survey explored the role that benefits play in an employee’s decision to seek new employment. 41% of small business employees said that benefits are crucial when accepting a job offer, while 75% said a good benefits package would make them choose one job over another.

Additionally, small business employees who looked for a job last year were asked to list the top factors they were looking for in a new employer:
 
  • Better benefits package – 35%
  • More PTO – 22%
  • New job title – 16%
  • Increased autonomy at work – 12%
  • New job before the next recession – 11%

Not surprisingly, benefits are a major factor when a small business employee looks for a new job. However, a more eye-opening finding is that 87% of employees would take improved benefits over a 5% pay raise.

Employees were also asked what they would do if their benefits were taken away:
 
  • Look for a new job – 39%
  • Talk with my boss – 31%
  • Ask for different benefits – 19%
  • Ask for a raise – 18%
 

Small Employers Cannot Overlook Employee Benefits

Recruiting and retention are poised to once again be two of the biggest business challenges in the coming year, and small businesses are more susceptible to them.

But enhancing benefit packages are one way to boost recruiting and retention strategies and remain competitive for top talent.

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