You may not necessarily be required to provide health insurance to your employees if your company legally qualifies as a smaller business. Federal and State laws vary. For example, in California, employers with 50 or more full-time employees must offer healthcare benefits. Also, in California, the definition of a full-time employee is someone working at least 30 hours a week. Employers who violate these laws face harsh tax penalties.
However, even if your business does qualify as a smaller business, you should consider offering health insurance and other employee benefits. Paradoxically, employees are resigning from companies in record-breaking numbers, but it is also a boon for small businesses. Companies of all sizes are in the fight to find and retain top talent.
There has been a societal shift in worker expectations. Since the Covid pandemic, our workforce is experiencing:
- Desire to pursue professional passions
- Dissatisfaction with the corporate world
- Renewed interest as a consumer and potential employee to support small businesses
- Need to be respected and cared for by their employer
Four Reasons Why You Should Provide Employee Benefits
1. Saving you money – benefits lower employee turnover
It is expensive to hire and train staff. It is even more costly to have staff leave and have to rehire another person. Industry averages put the cost of replacing a typical salaried employee at nine months, 75%, of the annual salary.
Your compensation package is what often stops your employees from leaving your company. They may have had better salary offers at other companies, but those companies may not match your unique formulation of benefits.
2. Offering benefits enables you to be competitive.
The best talent contributes the most to your bottom line. These top-tier employees have their pick of employers right now, but they are considering many variables. Now workers are prioritizing their quality of life over salaries and titles. They recognize the value of appealing employer benefits packages as a way to enhance the quality of their lives.
3. Demonstrating you care about your employees
Recent studies show that when employees feel cared for:
- 60% plan to stay at their company for three or more years (as opposed to only 7% of those who don’t feel cared for)
- 95% say they feel included in their organization (compared to 14% of those who don’t feel cared for)
- 90% say they’re likely to recommend their organization as a great place to work (compared to 9% of those who don’t feel cared for)
If you don’t have any benefits beyond what is legally required or no benefits, it sends the message to your employees that you are not prepared to go beyond the bare minimum for them. They may begin asking themselves, why should they do anything but the bare minimum for you?
4. Increasing morale and productivity
Benefits increase morale and productivity. You demand a lot from your employees. From the employees’ point of view, knowing that your company covers their dental or medical insurance gives them peace of mind.
A solid benefits plan helps to reduce employees’ stress and support their mental health. Employees understand that some companies do not offer these benefits, and their gratitude often prompts them to be more productive. As a result, they are much happier at your company.
Benefits that Boost
As a business owner, you will be happy to find out that well-thought-out benefits that align with what your workers actually want can help you and your company saves money in the long run. You can show employees you care and reap the rewards from it as well.
We have insights into what employees really want. We can review your benefits package or provide you with your first-ever benefits program. Feel free to reach out to us here.