For startups and small businesses, it’s not always possible to pay employees competitive salaries. However, you must remember that you have other things that appeal to top talent. You’re small, nimble, and can offer things not available to other organizations. With that being said, make sure you nail the employee benefits package.
Five Tips to Attract and Retain Employees With Your Benefits Package
The key to attracting and retaining talented employees is not offering the highest possible salary. Once a salary hits a certain threshold, it doesn’t have as much weight on the decision. What employees and their families really want are benefits that improve work-life balance and make the job more enjoyable.
Remember the Law
Under the law, businesses are required to provide employees with a number of basic benefits. These include the following:
These are non-negotiable benefits. Since every other business is doing the same things, you aren’t going to gain a competitive advantage here – but you will stay above the law.
Start With Health
Start by focusing on health benefits. These are seen as most valuable in the eyes of employees – especially those with spouses and children. Specifically, studies show that 88 percent of American workers believe that employer-provided health insurance is either “extremely” or “very important.”
With rising premium costs and the health care reforms of recent years, it’s becoming impossible for many businesses to offer health insurance at a competitive price. However, if you can afford it, you can definitely create a competitive advantage.
Make Retirement a Priority
After health insurance and related benefits, most employees turn their attention toward retirement benefits. Savvy employees will carefully analyze your retirement benefits and often make decisions based on what you’re offering. As a result, you need to be careful with the programs you choose.
For example, if a pension is in the picture, “Employers will need to ensure that the pension scheme they choose will invest employees’ pension contributions in reasonable and profitable avenues for the duration of the scheme,” Smart Pension points out. “This will mean ensuring pensions are invested sensibly both now and in the future. The pension scheme will also need to offer investment options that are conducive to the needs of your employees.”
For contribution plans, you’ll need to weigh the pros and cons of going with a SIMPLE IRA versus SIMPLE 401(k) versus regular 401(k). There are differences in the cost (on your behalf), contribution limits, and tax stipulations.
Flexibility Over Money
All over the world, there’s something people care about, yet few employers truly prioritize: flexibility. If you can include flexibility in your benefits package, you’ll be able to establish a true competitive advantage. Here are just a few ideas:
Time off to volunteer with approved charities and community programs
Paid maternity/paternity leave
Ability to work from home one day a week
Ability to extend business trips into personal vacation time
On-site child care for young children
Opportunity to leave early on select days (for family commitments)
A high salary is great, but flexibility in terms of work-life balance is even more attractive to many employees. Keep this in mind and be sure to throw in some of these small (yet effective) benefits.
On a related note, make sure you’re actually living up to these claims if you include them as part of a benefits package. Employees talk and you’ll create some bitterness if you don’t fully support these things. If you’re going to let employees work from home one day a week, don’t make them feel guilty for doing so. In fact, you should encourage it.
Use a Software Tool
For small businesses, trying to stay on top of benefits can be stressful and time consuming. And if you don’t have the resources to hire a full-time HR person, you’re probably going to spend some sleepless nights at the office just trying to sort through logistical issues. Thankfully, there are some handy software solutions.
Zenefits is well-established in the market, allowing you to easily and effortlessly handle everything from health insurance and payroll to PTO and retirement. Perhaps most attractively, it’s totally free for small businesses.
Don’t Make Benefits an Afterthought
A lot of small businesses make the mistake of looking at benefits at the last minute – after everything else has been figured out. This can be dangerous. The average employee is looking at more than just salary. They want some balance in their career and will often prioritize benefits over everything else.
Keep this in mind as you attempt to attract and retain your talent.