A new Seattle start-up will pay up to $10,000 for employee weddings. Multiple companies offer tuition assistance to pay for college. One even pays employees to sleep. Stories of over-the-top benefits like this are fun and often garner publicity, but benefits like these, particularly for the mass of small businesses, are unrealistic. Small businesses simply can’t afford such perks.
But not all hope is lost. Many small businesses owners mistakenly believe they cannot afford to offer any benefits, but this simply isn’t the case. There is a lot you can provide your employees, and it is important that you do. There are certain benefits that good employees feel they deserve, and going without any at all, though seemingly good for your bottom line in the short run, will strangle your business' chance for long-term prosperity. Tell too many qualified applicants that no benefits are offered at your company, and you’ll see them quickly head for the door. On the contrary, offer them the right benefits and you’re suddenly positioned for growth. Satisfied employees are more productive, miss less days of work, remain committed to company goals, and stay with you long-term. It’s a fairly simple equation, really.
The latest survey from the Society for Human Resource Management reveals that the top three benefits employees say matter most to their job satisfaction are paid time off (63%), healthcare/medical benefits (62%), and flexibility to balance life and work issues (53%). With that in mind, consider the following trends in employee job benefits. Bonus: Most are doable even on a modest budget.
Flexible work arrangements are especially valuable in attracting Millennials and 55+ year old employees, two desirable groups for many businesses. Young and seasoned employees alike want work-life balance, and telecommuting can be a great (and often easy) solution. The number of companies offering telecommuting as a benefit has tripled over the past twenty years, up from 20% to 60%. Other benefits like flextime and compressed workweeks are also good option, though they haven’t changed in popularity much. Job sharing is pretty much out (just 10% of companies now offering it compared to 24% in 1996).
Bonuses can be a great way of controlling payroll costs and employees really respond to them. More than half of companies surveyed offer non-executive bonus plans. There have also been increases in the number of companies offering spot bonuses or signing bonuses for both executives and non-executives, as well as retention bonuses.
We know employees want health insurance and companies are generally responsive to that. More than 95% of companies surveyed offered it, along with dental and prescription drug coverage (87% also provide vision and 85% mental health). But beyond traditional healthcare coverage is wellness coverage. Some 72% of companies now offer it. The most common wellness benefits are wellness resources and information, and programs like on-site flu vaccinations. A good wellness program can help cut the cost of healthcare benefits, which is typically the most expensive component of any benefits program.
Everybody needs a little time away. Paid vacation leave or paid time off plans that combine vacation time, sick time, and personal time are offered by a huge majority of companies (97%). In addition, 97 percent offer paid holidays. Less popular PTO benefits include paid maternity leave beyond what state law or short-term disability benefits mandate (26% of employers offer it), and paid paternity leave (21%). Unpaid sabbaticals dropped in popularity, offered by just 12% of companies, down from 27% in 1996.
Nearly four out of 10 companies have an on-site lactation/mother’s room, one-fourth let employees bring their children to work in an emergency, and one-fourth provide benefits other than health insurance to same-or opposite-sex domestic partners.
Nine out of 10 companies have a 401(k) or similar defined contribution retirement plan; of those, 74 percent offer an employer match. There has been an increase in the number of companies offering a Roth 401(k) plan in the past few years.
New benefits measured in the survey for the first time this year include executive coaching (offered by 16% of companies), a stipend or subsidy for using employee-owned technological devices for work (12%), and automatically enrolling employees into a defined contribution retirement savings plan (21%). Almost nine out of 10 companies surveyed now pay employees’ professional membership dues, up from 65% in 1996. Providing such career development benefits not only attracts and retains employees, but can also help your staff members build critical skills.
You need good benefits, so consider these options when developing your benefits plan. Even on a small business budget, you can design a plan that’s attractive and reflects a commitment to your employees.