With recruiting and retention more challenging than ever, companies have had to make significant changes in order to remain competitive for talent
Small employers in particular face additional difficulties as they have to compete with larger organizations and growth-oriented startups who are often able to offer more to candidates.
However, a new report from Guardian Life Insurance revealed one way small businesses are trying to win over new talent – by enhancing their employee benefits
How exactly are small employers doing this? Let’s take a look at the data to find out.
Staffing Is a Top Challenge for Small Businesses
In mid-October, Guardian Life Insurance released the results of their 5th
Annual Workplace Benefits Study, “Small Business, Big Benefits
.” The survey was taken in the Spring of 2017 and was taken by 2,000 benefits decision-makers and 1,700 working Americans.
One of the first statistics shown in the survey is that staffing comes in as the second biggest challenge facing small business owners and leaders
, behind only revenue growth and ahead of competition and legal requirements.
It is also shown that 61% of small businesses
plan to offer more generous benefit packages than their competitors. This number is even higher for start-ups (70%) and high-tech organizations (81%).
This goes to show just how competitive the recruiting market has become and will continue to in the near future.
Small Employers Are Turning to Outsourcing to Improve and Manage Benefits
The last decade has seen HR became much more difficult for small employers to administer on their own, which has led to a significant increase in the usage of outsourcing solutions.
According to the report, more than 50% of small businesses currently feel that administering benefits is overwhelming.
Additionally, the survey showed various aspects of benefits and how many small employers rated them as highly important:
- Providing employees with affordable benefits – 79%
- Controlling benefits-related costs – 79%
- Increasing employee productivity – 76%
- Maintaining benefits plan compliance – 74% (+14% from 2015)
- Improving employee experience/satisfaction – 71%
- Improving employee health and wellness – 71%
This has caused smaller employers to seek outsourcing solutions, such as professional employer organizations (PEOs)
, to help enhance their benefit plans.
The report showed that 34% of employers strongly agree that outsourcing is a very important benefits strategy.
Also, 64% strongly agreed that outsourcing has been successful in controlling benefit costs. This is one of the main advantages to using an outsourcing solution, as rising HR costs is a main driver to seeking this type of service.
Additionally, 25% of small employers ranked outsourcing
among the top benefits strategies in the next 5 years
Wellness is Critical to Small Business Employees
The report reveals that small business workers, like employees of larger organizations, are placing increased importance on their work-life balance and overall wellbeing.
And it appears employers are taking the steps necessary through their benefit offerings to improve in this area.
Here are the percentages of employees who strongly agree with the following statements, and the percentage change compared to 3 years ago:
- My employer cares about my overall well-being – 50% (+9%)
- My benefits positively impact my personal health/wellness – 42% (+35%)
- I wish my employer did more to address work-life balance – 37% (+9%)
The survey also revealed the importance of employers showing empathy for their employees
55% of workers
who believe their employer cares about their wellbeing want to stay for more than 10 years
. On the other hand, only 33% of employees would do the same if
they felt their company didn’t care about their wellbeing.
How Are Employers Meeting Worker Expectations about Wellness?
The Guardian report shows that more than 50% of small businesses say creating a culture of well-being is important. Additionally, 25% of small employers offer some type of wellness program
and 33% allow for flexible schedules and telecommuting
The data also shows the top 5 benefit strategies for small business owners over the next 5 years:
- Help workers make better benefits decisions – 53%
- Make plan design changes – 52%
- Expand wellness & prevention initiatives – 49%
- Offer more flexible work schedules/telecommuting – 46%
- Increase employee financial education – 44%
When it comes to how younger and older business owners view their company efforts, there is a slight difference. 66% of millennial owners
believe their company creates a culture of wellbeing. Meanwhile, 51% of baby boomers feel the same way.
Brokers Play an Important Role in Small Businesses
The report also revealed that brokers continue to play an important role for small businesses
. Around 90% use a benefits broker or advisor, while 6 in 10 use a traditional broker to help with their benefits needs.
One finding in particular shows just how valuable a broker can be for a small business. Here are some examples of employee benefits, and the percentages of small businesses who offer them with and without the help of a broker:
- Medical – 96% with a broker, 71% without
- Dental – 72% with a broker, 50% without
- 401(k) – 71% with a broker, 58% without
- Life insurance – 59% with a broker, 34% without
- Disability – 57% with a broker, 41% without
These numbers go to show how valuable benefits brokers are in helping small employers offer improved benefits to their employees.
With outsourcing solutions growing in popularity, these can pose a challenge for small businesses (who want to keep their benefits advisor) and benefits brokers (who risk losing clients).
However, working with a Broker-Only PEO can alleviate these concerns
, as the PEO sells their services through the broker who stays involved with the small business.
Offering Better Benefits Helps Small Employers Compete for Top Talent
With recruiting expected to remain a challenge for employers of all sizes, small businesses will be forced to make changes to compete for job seekers.
One such example is the need to offer enhanced employee benefit packages that help attract and retain talent in today’s competitive market.
While this can seem difficult, small business owners and brokers can turn to PEO solutions to overcome benefit challenges.
Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!