While employees are looking for jobs that they are passionate about (not to mention pay the bills), they also care about the benefits that business owners can offer them. Today, perks like free snacks or lunches, pet-friendly offices, flexible hours, and work from home options, are common, which means more employees are expecting them in their job search. We have previously talked about 10 things that make up an ideal workplace, but for this post, we are focusing specifically on benefits, including why benefits matter, which benefits are mandated, and optional benefits to consider as a small business owner.
Benefits = Employee Retention
While offering a high salary can be great if you don’t provide any additional benefits, employees may not stick around for long. In fact, salary doesn’t always equal engaged employees, as we learned in our employee engagement article. There is a “salary sweet spot” of $75,000, to be exact, that seems to be the threshold for which employees will stay engaged. After that, even if they make more money, their engagement likely won’t change much, which is why you need to consider more than just salary in your benefits package.
When employees have extra options, like the ability to work from home one day a week or work flexible hours so they can pick their children up from school, those little benefits can mean more fulfillment stemming from work/life balance. It’s also important to note that not all of your employees are going to want the same benefits. For example, millennials are looking for benefits that focus on learning and career development, student loan repayment assistance, and more holiday time-off, while Gen X is looking for benefits focused on retirement, health expenses, and flexible time for family.
For small business owners, some benefits are legally mandated based on your workforce and business. These benefits typically include Social Security, Medicare, and Federal Insurance Contributions Act (FICA) taxes. As an employer, you are required to withhold these taxes from your employee's paychecks. The amounts can change annually, so make sure that you’re staying on top of those if you’re doing payroll yourself.
Your small business may also be required to offer benefits like unemployment insurance and workers’ compensation insurance. These requirements often vary by state, so you’ll want to know what the rules are for your state to ensure you remain compliant.
Optional benefits are where you have the opportunity to create, and offer, the benefits that you think would be a fit for your business and employees. One optional benefit you should consider adding is a 401(k) plan. A 401(k) plan is a solid benefit to offer because it shows your employees that you care about their future. Offering a plan on its own is great, but if you can, offering a company match is even better. In terms of financial perks, offering a Flexible Spending Account (FSA) is also a nice benefit because it allows your employees to use their pre-tax dollars towards health-related items like co-pays, prescriptions, and glasses.
Optional benefits can also be some of the more fun perks we mentioned earlier, such as a pet-friendly office, casual dress certain days (or every day), free snacks, or catered lunch. Some of these benefits can get expensive, like offering lunch every day, so set a budget for your business, and also remember that some of the best perks, like jeans every day or flexible working hours, won’t cost you anything and often have the most value to your employees.
The more options you offer benefits wise, the greater your chances of attracting, and retaining the right talent for your small business. Finding a way to seamlessly blend traditional and non-traditional benefits can make your business stand out and remain competitive for your industry. If offering fun benefits seems overwhelming, you can always ask your current employees what benefits they would like to have or reach out to other small business owners to see what they offer their employees.