The power of implementing employee benefits can often be overlooked in small businesses because you are so focused on getting your company off the ground and making it a success. However, if your idea of an employee benefit is buying a better packet of biscuits, then you need to rethink your strategy.
Not offering benefits means fewer costs in the short term for your business, but long term you could be hindering rather than helping your growth. By offering decent employee benefits you will attract talented staff and help retain those staff you do have. You’ll also build an attractive employer brand and create a perception of a strong, caring and invested employer.
According to one report, 69% of employees revealed they are more likely to stay with an employer who offers a good benefits package while 68.2% said there were more likely to take a job if an employer offered a good benefits package.
What is a benefits package?
An employee benefits package is a collection of non-wage compensation that supplements an employee’s salary. It is up to an employer to decide what they offer in a benefits package and it can vary between individual employees based on some of the needs of their job. Some benefits will be taxable so its important to consult with your accountant to find out what applies in your case.
Why should small businesses offer a benefits package?
A benefits package should not just be seen as additions to a worker’s salary. If the offering is well thought out and used strategically it can have real value. It can help you form a positive and attractive employer brand, improve recruitment and retention, afford you greater staff engagement and help make your business a happier place for staff to work.
Have you ever found yourself in the position where you have a qualified candidate that you would like to offer the position to, only for them to turn it down for a ‘better offer’ elsewhere? It’s not only the salary that is appealing to people now, but also the inclusion of a benefits package that can sway a potential employee’s decision. It's important for SMEs to utilise opportunities to stand out from their competitors and attract top talent.
Including an employee benefits package as a standard with your job offer is something that can be advantageous to small businesses. Attractive benefits can aid in the acquisition of skilled, high-quality employees and having a strong dedicated team is crucial to the success and growth of your business.
Recruiting skilled staff is one thing but keeping them engaged and happy is quite another. Even after they have signed their employment contract you need to work on retaining them. Attractive employee benefits can encourage staff to remain put but so can less quantifiable benefits or perks such as flexible working, free refreshments, reward and recognition, company away days and volunteering days. For example, AirBnB offers staff $2000 to travel while the Body Shop will pay staff for a set number of volunteer days each year.
Aligning the needs of the business with its employees
Managing employee performance and setting targets can allow you to monitor their effectiveness within your business. Greater employee performance will feed into your business strategy and employee benefits will form part of that. For example, reward and recognition for hard work or helping an employee with their own career goals has a beneficial effect on productivity and ultimately business growth.
What to include in an employee benefits package
The types of benefits that you could include in a benefits package can be vast. You don’t have to offer all of them, or indeed any of them, but its wise to think about how these align with the values of the company.
The long term impact of implementing different employee benefits should also be considered. Whilst something may work in the short-term, it may have more damaging effects later down the line and its harder to take something away once it has been offered. Likewise, you need to take into careful consideration the financial implications implementing these benefits will have on your business and whether the costs of the benefits you intend to introduce are ultimately cost-effective and beneficial for all parties.
There are typically two areas that you categorise employee benefits into; financial and health and wellbeing.
Examples of financial benefits that you could offer employees include, but are not limited to:
On top of more traditional benefits, there are many different things you can offer to incentivise and retain your employees, these include:
Day off on their birthday
Dedicated learning and development days
Used strategically, a well thought out employee benefits package can be extremely valuable to a small business. And it doesn’t have to break the bank. Think seriously about what is important to your employees and see if there is a perk you can implement that will help, in even just a small way, towards them being able to achieve that.