Benefits are a common, expected perk for many employees — especially when they’re working at a larger company. The ability to have good healthcare, retirement options, and so on carries a lot of weight for many professionals.
But that doesn’t change the fact that benefits aren’t free. On the contrary, they often signify large investments on the part of employers.
This can make benefits a difficult thing for small-and-medium-sized (SMB) employers to offer. However, there are several reasons that SMBs should take investing in benefits seriously.
1. Investing in Benefits Shows That You’re Invested in Employees
First and foremost, investing in benefits is a clear vote of confidence in your employees. We live in a freelance-first world these days, with tens of millions of individuals working as contractors that come and go. If you aren’t careful, this fleeting mentality can have an impact on the full-time employees that you hire.
Benefits offer a way to bring your team together and show that you’re interested in their individual success. For instance, a good healthcare plan shows that you care about the health of your team and their families. A competent small business 401(k) plan demonstrates that you’re vested in your employees’ long-term financial success, as well.
Quality benefits can also impact your team in multiple ways beyond bringing a sense of loyalty and unity:
- Good benefits boost employee morale as everyone feels cared for and secure in their employment situation.
- Good benefits help with engagement by feeding into the camaraderie aspect of an organization and encouraging employees to reflect on the care that they’re receiving back from their employer.
- Good benefits improve company culture by cultivating an aspect of quality and long-term care for everyone involved.
There are many reasons to invest in benefits, some of which will be covered below. However, the way that benefits impact your employees and overall company culture is one of the most important aspects of them all.
2. Investing in Benefits Attracts and Retains Talent
Investing in benefits can have an impact not just on your current employees but on your future ones, as well. According to the Bureau of Labor Statistics, the median number of years that wage and salary workers remain with their current employer was down to 4.1 years in 2020.
This rapid turnover has become a chronic issue for employers, who find that quality talent is difficult to retain once they have someone “in the building.” Even worse, the ongoing shortage of quality talent continues to be an issue in finding qualified employees in the first place.
This makes any tool that can help with finding and retaining talent a key part of long-term success. And it just so happens that benefits are one of the best recruitment tools out there.
Investing in quality benefits has a two-fold impact on the kind of talent that you hire. First, good benefits make you competitive compared to other companies (and even your competitors.) When a talented individual considers where to work, they’ll look further than the salary. Seeing that an offer is backed by a solid set of benefits can be a great way to attract quality talent to your enterprise.
The other side of the equation is the reduction of turnover. As we already discussed, by having good benefits, you show that you’re invested in your employees. This serves as a natural barrier to resist any temptation for them to leave your company. Knowing that they’re being paid well and have competent benefits can reduce turnover and keep essential talent within the ranks of your staff.
3. Investing in Benefits Helps Your Bottom Line
So far, we’ve primarily discussed how investing in benefits can help your employees. Granted, as a business owner, you will also benefit from things like employee engagement and retention. Nevertheless, there’s another aspect of good benefits that is all about the business: it’s good for your bottom line.
It can seem like a contradiction to say that spending money on benefits ends up making you money. But the keyword here is “investing.” This isn’t just a way to spend your company’s hard-earned dollars. It’s a legitimate investment that yields profits in the form of, well, more hard-earned dollars. This happens in several different ways.
For instance, most benefit packages include good healthcare. When your employees have good healthcare, it enables them to take care of themselves more effectively. This, in turn, translates to better health.
A healthy employee won’t need to take as many sick days. They also won’t need to make as many expensive trips to the doctor and will be able to spend more time working. All of this equates to more income for your company.
Employee wellness programs are another growing benefit. These are known for improving employee morale, boosting productivity, and reducing absenteeism. Once again, this means more time spent working in a motivated and positive mindset.
Benefit programs also often come with tax advantages attached. These can apply to employers and employees alike. From retirement contributions to HSA savings, being able to reduce tax burdens is another great cost-saving aspect of good benefits.
4. Investing in Benefits Sows Long-Term Hope
Benefits provide a sense of consistency for your company. They demonstrate a belief in the longevity of your enterprise and the fact that you’re going to be around for a while.
This may seem like a minor perk. But it can have a huge impact on areas that we’ve already covered, such as retention and your company culture. When your employees know that they’re operating in a business that is willing to invest in benefits, they’ll feel confident that they’re working in a healthy, forward-thinking organization. They’ll also be more willing to pour themselves into the success of your company over time.
As a final, nuanced note, having good benefits also gives you peace of mind as a business owner. You and your loved ones will be able to participate in many of the same benefits that you provide for your staff. This offers a further sense of stability as you lead your team into the future with confidence.
So, if you’re a business owner that’s on the fence about benefits — or even if you have them but see them as an expense or a bother more than anything else — take a minute to reconsider your position. Benefits can impact a company, great or small, in a variety of positive ways that should never be taken lightly.
So review your current benefits policy and consider if you’re taking full advantage of all that benefits have to offer. If you’re not, it may be time to steer a bit harder into offering (and capitalizing on) those perks that your employees have been seeking.