Besides your core service or product, your employees are your businesses most valued asset. Without a dedicated, loyal, knowledgeable team who comes to work energized and ready to put in a productive day, you'd be hard pressed to turn out the quality that you do. So, how do you keep your best employees? Benefits.
Employee Benefits Basics
You may think that skipping the benefits package in your small operation might be the best way to keep the doors open. Profits are returned to your bottom line rather than being eaten by HR requirements. But happy employees are ones who feel valued, and your bottom line can be healthy if you aren't dealing with high turnover and your employees are productive. As an employer, you are required to offer basic benefits, which are:
- Time off for voting purposes, jury duty and active military service
- Compliance with workers compensation requirements
- Fulfilling state and federal unemployment taxes--providing benefits for unemployed workers
- FICA taxes--withholding from employees' paychecks and paying your own to provide employees with retirement and disability benfits
- Compliance with Family and Medical Leave Act (FMLA)
Although it may seem costly, the benefits that good employees require are health insurance, a retirement package, vacations, personal and sick time, and disability options.
The Trouble with Health Insurance
For small businesses, many health insurance carriers charge high premiums, require detailed health information from all insured members and depending on the state in which you operate, you may be required to carry mandated benefits that cost more. How can you avoid paying high premiums that put you under?
Band together with other entrepreneurs to gain more clout with carriers. Also check with your chamber of commerce for health insurance networks that group businesses by size and location, not business type. Another option is to look into benefit offerings through trade associations. Often your membership to a trade association can offer a gateway into discounted plan options.
The Economic Growth and Tax Relief Reconciliation Act of 2001 provides a tax credit to businesses that offer retirement plans to their employees via a tax credit towards the cost of starting a plan. Options for small businesses include 401(k), IRAs, Savings Incentive Match Plan for Employees (SIMPLE), or a Simplified Employee Pension (SEP). To determine the best option for your business, start by talking to your accountant.
Happy Employees = Happy Business
Recently the Laughing Planet Café, with 14 restaurants spread through Oregon and Nevada, decided to offer fully paid parental leave to all of their employees--a move considered unheard of in the restaurant business. Looking at both the statistics from a 2011 study of California's paid leave law that shows 83% of low-wage workers returning to their job after having a child if given access to paid leave, and their costs associated with hiring and training new employees coming in at $5,000 per each new hire, the company decided that offering this benefit is in everyone's best interest.
Said the company's owner, "It wasn't a business decision to do this, it was a human decision. But as a business owner, I also think it will pay off down the road."
Ready to dive into benefits packages for the sake of employee retention? Do your research and talk with your lawyer and accountant before committing to a provider. Also consider the services of a dedicated benefits consultant. For alternative solutions to funding your benefits research, contact the experts at Bizlender, 855-404-3070.