In the early stages of a company, it can be difficult for entrepreneurs to recruit and retain high-quality workers. If they want to attract top talent, they’ll need to sweeten the deal with employee benefits. However, this comes at a price.
Allowing applicants access to the employment benefits they want can entail spending a substantial portion of an employee’s salary. According to the Bureau of Labor Statistics (BLS), salaries accounted for roughly 70% of private employee compensation in December 2020. The remainder was spent on benefits, which accounted for approximately 30% of the total.
Typically, entrepreneurs struggle to manage startup expenses and everything above the bare minimums of employee benefits. However, all hope is not lost. Crossing a few key thresholds before providing the three benefits mentioned below can be a make-or-break proposition for your new business venture in this case.
PROVIDING PAID LEAVES
It is true that even unpaid leaves are difficult. Who would cover for an employee who goes on leave or gets sick with the flu? Nonetheless, any business owner recognizes the importance of paid time off as an employee bonus. Employees who work hard should be able to take time off without losing their jobs.
Employers are not required by federal law to have paid vacation, holidays, sick, or personal leave. Certain states and counties, however, have legal provisions for paid leave. Any rules that apply to entrepreneurs should be understood.
PROVIDING HEALTH INSURANCE
Health care is a costly privilege that many entrepreneurs believe is out of control, but it is critical to workers’ well-being. In reality, 56% of workers claim their current status is due to their healthcare benefits. According to the same study, 46% of respondents said it was a positive attribute — or the determining factor — in their decision to take the work.
Although it is not required to have healthcare until you have 50 workers, many small business owners choose to do so in order to retain employees. Luckily, alternatives are available.
Small Business Health Options Program (SHOP) programs are promoted by the federally facilitated Health Insurance Marketplace for companies with 1 to 50 employees. SHOP plans, however, are not valid in all nations. Small business arrangements are available in some states with their own health care exchange for businesses with up to 100 employees. Furthermore, several local governments and chambers of commerce have begun to sell small businesses community insurance policies.
OFFER RETIREMENT PLANS
A retirement package could be the one benefit you don’t think you need to give right away to your workers. With so many American people struggling to prepare for retirement, this perk will help the business stand out from the crowd.
Since defined benefit plans usually require the employer to bear almost all of the financial strain, many retirement options would be too costly for entrepreneurs. Most of the time, the expense of such plans would bring them out of reach, but there are less expensive alternatives.
