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Competitive Benefits Small Business Owners Can Offer Their Employees
February 10, 2023
After several interviews with a great prospective employee, you may be ready to extend an offer of employment. Job seekers may be excited about the new role, but if the employee benefits are not competitive with other offers, they may decline the job and move on. Small businesses must find the balance between competitive employee benefits that keep employees satisfied and committed to the company but don't break the budget. Finding this balance will help your small business improve employee retention and reputation.
Retirement Plans
As excited as your employees might be about working for your small business, most people don't want to spend their entire lives in their careers. Having competitive retirement packages is essential to attracting and retaining employees. Even though there are many options for retirement plans, such as 401(k), Roth IRA, SEP IRA, and more, these options have been traditionally challenging for small business employers to offer.
Recently, the SECURE 2.0 Act of 2022 received bipartisan support and was signed into law by the Biden Administration. This legislation would provide flexibility for retirement savings by providing significant tax benefits to small business employers, increasing the age for taking RMDs, automating 401k enrollment, and more. Small businesses of less than 50 employees who sponsor a new defined contribution plan for their employees can receive tax credits for employer matching contributions for the first few years: the credit will cover 100% of employer matches for the first two years since the plan's creation, 75% of employer matches for the third year, 50% for the fourth year, 25% for the fifth year, and tapers to 0% in the sixth year. The various aspects of the SECURE 2.0 Act will take effect between 2023 through 2025.
Health Insurance Packages
The ACA requires that small businesses offer health insurance to employees who work at least 30 hours a week. Small business owners should look at their budget to see which coverage options will best fit themselves and their employees – group health insurance plans are more common for larger businesses but can still be used for small businesses with proper planning.
Dental and vision plans are often separate from health insurance plans and can be a great additional benefit to attract employees (they typically have much lower monthly premiums). Small businesses can also deduct some of the cost of dental and vision plans from federal business taxes since they fall under healthcare-related expenses for employees.
Fitness and Lifestyle Incentives
Another benefit small businesses can offer employees to increase employee satisfaction is fitness and lifestyle incentives. Your employees will be more likely to be productive and thrive when caring for their mental and physical health. Larger businesses often create more complex corporate wellness programs. For a small business, supporting your employees' wellness could be as simple as partnering with a gym, yoga studio, or community center to offer your employees a discounted rate. Informally, you can opt for a healthy catered lunch for your employees once a month or quarter.
PTO Packages
Hard-working, quality employees need their time off. Although PTO is not mandatory for small businesses, most will offer a plan to their full-time employees. For part-time employees, many companies opt for pro-rata PTO hours they can accrue as they work. There's no magic number for PTO; every small business must assess what works best for them. That said, many small companies offer between 10 to 20 days.
Professional Development
Employees who feel that their employer is not investing in their professional skills and providing development opportunities are more likely to leave the company. Adding professional development opportunities can increase retention and attract top talent. Professional development can be anything from webinars, guest speaker series, a convention, training classes, leadership conferences, skills workshops, and more. Larger gatherings, like conventions or conferences, may not be the right fit for every company, but any company can start with a video series, workshops, or webinars.
Keeping Employees Happy
The bottom line is that employees who feel supported by their employer are more likely to be productive, be satisfied, stay in their role, and speak well about their work to their friends and family. In competitive job markets, comprehensive and innovative employee incentives will help your business stand out and attract the right talent. Small business owners should also ensure they rework employee benefits programs over time/as needed to keep their current team in place.
Connect With The Alexander Group
Creating an employee benefits plan that fits your budget and keeps employees happy is one of the many issues business owners must navigate. At The Alexander Group, we coach business owners on running their businesses in line with their vision and exceeding their goals. Our one-on-one coaching will help you reduce stress by balancing your business and personal lives.
Having a group of individuals with similar goals is also vital. Our group of Greater St. Louis area business owners collaborates, discusses everyday issues, and develops dynamic solutions. When business owners pair this with our one-on-one coaching, they set themselves up for success. Contact us today if you're a business owner ready to commit to improvement!
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