When it comes to hiring and keeping the kind of employee talent that makes or breaks a business, benefits packages are a big deal. A full package will attract the kind of top flight talent that a less competitive package simply will not. That’s just a fact of the labor marketplace. For small businesses, however, securing an attractive and compelling benefits package to offer their employees can be a challenge, and negatively impact their ability to acquire the talent they want and need to be successful.
A study by the Harvard Business Review Analytic Services concluded that strong benefits had a profound, positive impact on a business’s ability to retain their best workers. Unfortunately, since 2004 employment-based insurance premiums have risen a whopping 69 percent for small businesses. Health insurance is unquestionably one of the fastest-growing costs for many employers, which is a problem for smaller operations which simply can’t afford to spend lavishly on their healthcare benefits.
Supplemental Benefits: A Powerful Small Business Tool
Fortunately for many small businesses, non-medical supplemental benefits can help fill in the gaps and smooth over unavoidable wrinkles in their benefits offerings. These completely voluntary supplemental benefits are bought and paid for almost entirely by employees themselves. The advantages of this approach should be considered. For companies, supplemental benefits provide an affordable way of bridging the benefits gap with larger competitors, at minimal cost, and is incredibly simple to administer. For employees, the ability to pick-and-choose which benefits they want makes for a more tailored, more affordable benefits package and is considerably more convenient than trying to purchase a plan independently.
The PEO Killer-Combo
PEOs, or Professional Employer Organizations, are third-party structures that function as both an umbrella corporation and a co-employer for their clients. This is important because by leveraging a PEO’s size through a practice known as client ‘pooling,’ PEOs can purchase group health insurance in bulk, and more importantly, at a discount. What this means is that each client company is then able to access expanded, more comprehensive health care benefits at a more affordable rate than they would be able to negotiate on their own. Supplemental benefits, such as dental, vision, and life insurance, are typically offered to clients in a cafeteria format, which allows the employees of the client firms to choose whatever they’d like. Thanks in part to the additional savings offered by a PEO arrangement, client companies often provide a base stipend to help their employees to offset some of the costs.
In today’s competitive job market, benefits matter. Employing a PEO and taking full advantage of supplemental benefits can be the one-two punch many small businesses desperately need to be competitive today.