How Do Employee Benefits Help Small Businesses?

By Maria Valdez Haubrich

If you offer benefits to employees at your small business, you should be pretty proud of yourself. Benefits aren’t cheap, and they’re a great way to attract and retain satisfied employees. But a new survey from insurance provider Aflac shows that business owners aren’t necessarily getting all the benefits they think they’re getting from employee benefits.

The 2011 Aflac WorkForces Report surveyed employers and employees at companies in of all sizes. Small business owners reported their main goals when offering benefits are:

1. taking care of employees;
2. doing the right thing; and
3. retaining employees.

How good of a job do small business owners think their benefits packages are doing at keeping employees happy?

What challenges are small companies facing when it comes to benefits? Not surprisingly, understanding health care reform was the top benefits challenge for 64% of small employers, while offering quality benefits within a budget was the second-largest benefits challenge for 63% of small companies.

However, employees were less satisfied with their benefits than small business owners think they are. About half (51 percent) of small business owners say their benefits packages meet employees’ needs “extremely” or “very” well. However, only 37 percent of small business employees agree.

There are some reasons for this discrepancy. The study found that small companies are less likely that midsized or large ones to give employees a voice in choosing benefits that will be offered. They are also less likely to provide voluntary benefits (extras, such as life insurance, that employees can choose to buy on their own).

But part of the problem is not what small businesses are offering, but simply the way they’re communicating about it. Almost half (46%) of small company employees say their companies don’t communicate enough about employee benefits packages. And 39% of employees “strongly agree” that better communication about their benefits would make them more loyal to their employer.

What’s the lesson for you? First, consider offering your employees some input into the benefits you provide. Of course, let them know that you can’t satisfy everyone – but getting their input could make them feel better and even save you some money if, for instance, you find out that no one really cares about having vision insurance or some other benefit you’ve been offering.

Second, let employees know what you’re doing for them. Many workers don’t realize how costly insurance and other benefits can be. Explain your benefits programs, how employees can get the most from them, and how much your company is contributing toward them. It’s likely to make everyone feel a bit more appreciative—and that will pay off in greater loyalty.

Image by Flickr user Ano Lobb (Creative Commons)

This entry was posted on Tuesday, July 26th, 2011 at 6:00 am and is filed under Small Business, small business, Workforce. You can follow any responses to this entry through the RSS 2.0 feed.


You can leave a response, or trackback from your own site.