What kinds of employee benefits does your small business offer? If you’re only giving your employees the bare minimum—or not even that—you’re not doing your business any favors. In a survey from Kelton Global commissioned by QuickBooks Payroll, 44% of small business employees say companies that don’t offer health or dental insurance, paid vacation and sick days, or retirement plans are cheap and don’t care about their employees. More than one-third say these companies are “behind the curve,” while 41% say they wouldn’t want to work there.
The survey of more than 1,000 U.S. small business employees has some other insights into what benefits employees care about, what they’re actually getting and how your business stacks up. Here’s a closer look.
What Are the Most Common Employee Benefits?
The good news: 93% of employees in the survey say their employer provides at least one benefit, with paid time off being the most common. However, while 57% get paid vacation, just 48% get paid sick days and only 37% get paid personal days. New parents fare the worst—just 14% say they get paid parental leave.
Two-thirds of survey respondents get health insurance benefits from their employer: 56% get health insurance, 41% receive dental insurance and 35% get vision insurance.
Just 41% are offered a retirement plan such as a 401(k), and retirement benefits are more likely to be offered to employees age 39 and up than to younger employees. Retirement plans for even the smallest businesses are available at reasonable costs, and this is one of the most desirable benefits for employees. Not only are retirement benefits essential to attracting older workers, they can also help make your business a more appealing employer for millennial and Gen Z workers—two demographics that are already concerned with their financial futures.
It’s the Little Things
Beyond the essential employee benefits mentioned above, the more discretionary employee benefits—such as free food in the office—are less common. About one-third (36%) of small businesses provide food and drinks to employees; 23% offer flexible work hours and just 13% let employees work remotely.
While free snacks are nice (and 61% of small business employees say they feel “cared for” by employers who provide such benefits), flexible or remote work is arguably a more meaningful benefit. Being able to work from home or adjust work hours around a child’s schedule has a significant impact on an employee’s daily life far beyond a free latte or granola bar. Flexibility can make all the difference when an employee is weighing a job at your business vs. a job elsewhere.
Of course, if you own a retail store, restaurant or other business where employees must be on-site to do their jobs, this isn’t an option for you. But for more and more businesses today, work can be done from anywhere, making it easy to offer flextime and let employees work remotely. (Here are some tips on how to hold remote workers accountable.)
The Benefits of Benefits
Employee benefits are good for your staff, but they can also benefit your business by improving employee satisfaction and loyalty. Good benefits can also help a small business stand out and compete with bigger companies for qualified workers.
In this area, small businesses still have a way to go. Almost four in 10 (39%) survey respondents are dissatisfied with their employee benefits; 29% say their company only does the “bare minimum” when it comes to benefits.
In addition, just 39% say they have better benefits than most of their peers, and only 6% say their company’s benefits are “above and beyond” the norm.
Bad benefits can drive employees away. More than one-third of employees who looked for a new job in the past year were seeking better employee benefits, and 39% say they’d start looking for a new job if their benefits were cut back.
What Can You Do?
It’s not surprising that small businesses find it more difficult than big ones to offer outstanding benefits packages. After all, you don’t have the deep pockets of a Google or Microsoft to ply your employees with free beer on Fridays or on-site medical consultations. But you should do your best to offer the benefits your employees want. That’s because benefits have a real effect on employee loyalty.
One-fourth of survey respondents say if they had the rights benefits package, they’d happily recommend their employer to others. Almost half (48%) say benefits would make them stay at their job even if another company offered them a raise, and 87% say they’d give up a 5% raise in exchange for more benefits.
You don’t need a huge budget or HR team to offer employee benefits. Find out how to build an employee benefit plan from scratch While employee benefits may cost you some money in the short run, in the long term, they can pay you back in employee loyalty and satisfaction, ultimately making your business more competitive.