Why Your Small Business Needs a Group Benefits Plan
When it comes to attracting top talent, small businesses need to offer the same benefits as their larger counterparts. A group benefits plan is a great way to do that. It can help you attract and retain quality employees while providing added financial security for your business and employees alike.
Here’s what you need to know about group benefits plans and how they can benefit your small business.
What Is a Group Benefits Plan
A group benefits plan is an employee benefit plan covering an entire group; in this case, a cohort of employees working at a company or a firm. A group benefits plan can offer the same coverage to every person employed by the business, or you can set up separate classes if you want to provide a different spread of benefits to groups of employees. For example, a large company may want to set up one set of benefits for executives, one set of benefits for managers, and one set of benefits for office or field staff.
How Valuable Are Benefits and Perks?
According to Glassdoor’s Employment Confidence Survey in 2015, around 79% of employees are more interested in a new or additional employee benefit than a salary increase. The study also found that women (82%) particularly preferred benefits to salary increase as compared to 76% of the male employees opting for the same.
When it comes to age, 89% of employees aged 18-34 prefer employee benefits to pay increase when compared to 70% of 45-54-year-olds and 66% of 55-64-year-olds.
During the survey, Glassdoor also included related indicators of job market confidence amongst employees. These variables included rehiring probability, job security, salary expectations, and business outlook.
Today’s market belongs to the job seeker. With the global economy continuing to expand, job prospects and market confidence is on the rise.
In order to compete in the top talent pool, employers can no longer rely on a competitive pay scale, although it certainly helps. Today’s labor market demands more than just salary and traditional compensation.
For the hiring firms to recruit the best, they’d have to offer the best, including traditional and non-traditional compensation. Recruiters can tap into the best demographic metrics by offering competitive perks and decent salary packages.
Types of Benefits/Perks Valued More Than Pay Raises
Typically, the benefits offered to employees fall under any one of the following categories:
- Health Insurance
- Dental Insurance
- Life and Critical Illness Insurance
- Short and Long Term Disability Insurance
- Health Spending Account
- Employee Assistance/Wellness Program
Amongst the types of perks preferred by the employees, medical and dental coverage leads the list with 40%, followed by paid leaves opted for by 37%. Trending alongside these perks were others such as performance bonus (35%), paid sick days (32%), retirement plans and pension (31%), and flexible schedule/ remote working/ the ability to provide online services (30%). Tuition reimbursement was another group benefit preferred by many employees.
Why Introducing Group Benefits is a Good Idea for Your Business
Introducing an employee benefits package is one of the best ways successful business owners attract and retain talent. Most businesses will agree that employee benefit packages have been one of their safest investments. You can easily manage and provide group benefits to your employees, allowing your company to enjoy reduced costs and your employees to enjoy health and wellness.
Over time, the cost of replacing and hiring new talent continuously offsets the profits acquired from cutting back employee expenses. Many business owners have now come to understand that trying to increase profit margins by opting out of group benefits is a bad financial move. And now that you know what your employees find most important for their commitment to a company, there’s every reason for businesses to start making the right move in this direction.
Here are some of the greatest benefits small and large business owners enjoy by introducing employee-friendly perks and packages.
1. It helps you retain and attract talent
A healthy benefits package will help your company retain the best out of an already slimmed pool of top talent. A competitive salary can incentivize but not ensure retention for an in-demand employee.
They are looking for a substantial employment offer that includes perks directed to enhance an employee’s quality of life and satisfaction. A decent group benefits plan ensures employee satisfaction, low turnover rates, and a positive working environment. All of these factors are conducive to increasing productivity at work and better overall results.
2. It Protects Your Single Greatest Asset
Ask any successful business owner, and they will tell you that their most important asset is their employees. Deteriorating health can be the greatest threat to your workforce. The national healthcare program typically protects Canadian employees, but medical emergencies, especially those that turn into long-term problems, can involve many unforeseen costs and financial stress. Keep in mind that wellness and healthcare coverage can range from dental and medical care to therapy and mental health assistance.
Introducing a healthcare benefit plan that extends to the families is probably the single biggest perk you can offer your employees. Most employees will consider financial protection against a critical illness an important factor when making any potential move in favour or against an organization. This way, you’re not just retaining numbers but also protecting your workforce.
3. It Leads to Reduced Costs
Employers offering group health coverage benefit from being able to deduct the portion of the premium they pay from their company’s taxes. We normally recommend the employee pays for the Life and Disability Insurance portion of the premium so if they do end up claiming under those benefits (which we hope never happens), they will be considered a non taxable benefit to the employee.
4. Maintain Productivity and Make Bigger Profits
Ensuring that your employees are happy, stress-free, and healthy will come back to increase the productivity of your corporation massively. By putting all sorts of tools and resources and ensuring a healthy environment at the disposal of your employees, you minimize potential downtime, unforeseen absences, and slower task completions. The result is greater work efficiency and increased profits.
5. It Builds Morale and Boosts Loyalty
A workplace with high turnover rates typically instills mistrust and dissatisfaction amongst employees. This can include the staff that works at the C-Suite level. Employers must understand that unless their staff has the confidence that they are more than just a number, it is not possible to meet true success.
One of the best ways to do this is through employee retention and this brings us back to group benefits. An employee who has been enjoying health coverage and other wonderful perks alongside a competitive salary has too much to lose and will not be easily incentivized by competitive firms for rehiring. In this way, group benefits can boost the morale of the employees and increase sentiments of loyalty among them.
Paving the Road to Wellness and Company Wellbeing
Companies must focus on retention and the well-being of their members for long-term success. They must reassess their budget, take account of their staff’s needs, and discuss the group benefits plan that would best satisfy the employees. Each group benefit would offer a different kind of coverage. As a business owner, it is your job to make sure that your group benefits plan can sufficiently meet the claims and coverage costs that taunt your employees the most and keep them from exhibiting their best.
The Value of Independent Advice
As independent advisors, we deal with most of the major carriers in Canada and when you quote with us we will take your group to market and present you with the three best quotes. We care deeply about being transparent through the entire marketing process and will always provide a copy of all the quotes we received for your records. All the quotes we provide are no fee no obligation and completely customizable so if you want to look at a different benefits spread than originally quoted we are happy to ask for revisions, and at the end of the process if you decide that our plans are not right for you there will be no surprise fees and no hard feelings.