While we’ve thankfully seen small businesses continue to recover, they’re now faced with another challenge—hiring and retaining employees. Every day we hear stories from our small business customers that align with the data and headlines about the hiring crisis in the United States. As of September, the number of open jobs in the U.S. reached over 10 million. However, despite the unemployment rate remaining above 5%, many businesses have reported difficulty finding workers. A large portion of small businesses fall into that category – according to the latest NFIB Small Business Optimism Index, 50% of small businesses have jobs that they can’t fill. While some businesses are utilizing creative methods to attract talent (such as sign-on bonuses, increased flexibility, etc.), there are other, more cost-effective opportunities that business owners can unlock. One little known fact is that a well-optimized approach to insurance can help business owners maximize resources and better attract talent.
Here are a few tips we share with our clients to help small business owners save money and boost the attractiveness of their employment offers:
- Protect your people: Understanding what matters most to your prospective employees is really important to successfully hire and retain talent. New hires want to know they’re walking into a safe and stable place of work. Ensure you are up to date with all local and state requirements and create a plan for potential changes like mask mandates, COVID-19 testing requirements, etc. To maintain a competitive edge against other small businesses fighting for talent, prioritize employee safety by holding regular training and workplace safety inspections. Every industry poses a unique set of risks which can become expensive problems for small business owners. Depending on your industry, ensure there is a plan in place to reduce potential risks, and all employees are trained properly.
- Triple check your selection: Do you know what kind of insurance your business actually requires? A great first step is to research this and confirm you’re using the right type of insurance, especially if you are going to take on risk—e.g., open second locations or expand to new areas. If you don’t have the right insurance, the financial and safety concerns surrounding your small business can increase significantly. No one wants that after the long year-and-a-half we’ve had! The security of insurance—the right insurance—enables small businesses to grow and hire safely.
- Shop around and explore your options: Supply and demand is no secret and as a consequence talent costs have gone up. Finding ways to save money elsewhere can make a real impact on your business’ bottom line. One option is to seek out alternative insurance providers that could help you immediately save money. For example, with workers’ comp insurance, there is a common misconception that insurance costs are fixed, but it’s actually variable and by shopping around you can unlock more affordable rates. You can compare rates among insurance providers on your own or work with an agent. At Pie, we’ve found many small businesses overpay by up to 30%. Take the time to ask, you could find crucial savings.
- A little organization…a lot of saved $$: It’s important that your insurance approach remains organized and accurate. For example, correcting simple inaccuracies can protect you from taking a financial hit at your annual audit. First, confirm your provider has accurate payroll information. Second, ensure your employees are properly classified by class code. Additionally, hit deadlines for workers’ comp notification and claim forms. Lastly, remember to stay vigilant and keep an eye out for fraudulent workers’ comp claims. Having more money and security will provide you with the cushion to grow.
While it’s certainly a competitive time for small businesses, it’s also an opportunity to build a repeatable strategy that uses creative ways to attract and retain employees. Communicate to your team, let them know how you’re protecting them and don’t let your insurance fundamentals get in the way.
Pie Insurance Co-founder, Dax Craig. Pie is one of the fastest growing insurtechs on the market – the company raised $118 million in series C funding earlier this year, experienced record-breaking growth in Q2, and recently expanded its executive team and board of directors.
Insurance stock image by Jirsak/Shutterstock