Any business, large or small, will tell you that finding and retaining top talent is the biggest driver of success. But if we’re going to really say it how it is, then for smaller companies with fewer employees, employee retention can be a matter of survival.
For many SMBs, the costs and lost productivity associated with replacing a key member of staff can easily become more than the company can absorb.
So what keeps talented employees in place? Pay and job title play a role, of course. But so too does the employee benefits package you can offer. What you’re willing to give above and beyond what’s expected can demonstrate the kind of culture you support and how valued your employees will be.
And therein lies the importance of an employee benefit solution through a PEO for small businesses
Have you ever wondered why a benefits package is so important to your employees? After all, these are benefits that they could, theoretically, purchase for themselves.
The simple fact is that benefits packages are incredibly good value for staff. The bulk purchasing power of companies far outweighs that of the individual — meaning employees get access to a wider range, and higher quality, of benefits than they could afford on their own. SMBs are obviously limited in terms of their bulk purchasing power. They simply aren’t big enough to negotiate good rates. So this is where a great employee benefit solution really shines.
When you outsource your employee benefits program to a bigger, more experienced provider, then you’re all of a sudden working in a different league. The businesses behind these employee benefit solutions have two advantages that SMBs would go otherwise without:
- A large pool of clients
- … and the time and experience to negotiate on your behalf.
The result is an employee benefits package that far exceeds what’s typical of a smaller organization.
It’s easy to see how these benefits packages can help with recruitment but do they really have a strong impact on retention? The short answer is ‘yes’.
How great benefits impact your bottom line
Retention is arguably even more important than recruitment. Finding great talent is exciting, but losing someone you have spent time and money training up can be devastating.
Worryingly, nearly one-third of workers were looking to change jobs in 2019. And nearly half of them (15% of total workers) attributed this desire to poor remuneration or benefits. A further 10% of workers wanted to leave their positions because of poor corporate culture.
On the other hand, though, companies offering great compensation and benefits packages enjoy 56% lower attrition rates, according to LinkedIn.
If replacing one mid-level employee costs 150% of their annual salary, then the profit-protecting solution is looking pretty clear: better employee benefits. So where should you — and your chosen employee benefits solution — focus your efforts?
The biggest component of most employee benefit packages comes in the form of healthcare. Providing quality health-, dental- and eyecare encourages talent to be proactive in looking after their wellbeing. This can lead to early diagnosis, preemptive care, and a reduction in the number of sick days or periods of low productivity due to poor health.
Perks like discounted gym memberships and tax-free cycle schemes would also fall under this category, as something employees and candidates would value.
Mental health issues are some of the biggest causes of low productivity, even if no sick days are taken. Staff can feel despondent, distracted and can struggle greatly with their workload.
That’s why an attractive benefits package includes access to therapists and other support to help employees to thrive, rather than just plough through.
This can also lead to a better working environment for your whole team. Few managers feel confident managing talent suffering from depression or anxiety, for example. For many team members, knowing that support is freely available is deeply reassuring.
Retirement plans can significantly boost employee retention and protect your business from unexpected recruitment costs.
Your employee benefits solution or partner will be able to offer and manage unparalleled savings programs for small business workers. A great Professional Employer Organization (PEO) will also offer training, education and awareness regarding pension and retirement plans — a persuasive added extra, even for young Gen Z workers who are already thinking about their future.
We spend a huge portion of our waking hours at work. Having a culture that allows people to feel seen, respected and valued is essential if we want them to give us their best efforts.
A strong benefits package — especially one that includes a few luxuries, like gym access — shows that you’re not just paying lip service to creating a healthy working environment.
Beyond gym memberships, there’s also discounts to local restaurants and attractions, as well as other leisure bonuses. These might seem like minor additions — and entirely unrelated to the work you do — but they send a clear message to your staff: we care about your wellbeing.
Employees who feel seen and valued are more productive. They’re excited to be in the office and are passionate about what they do. And, at the end of the day, they’re the ones who go the extra mile… to bring you the extra profit.
At MartinoWest, we offer a range of PEO options for your employee benefit solution. We have pre-agreed negotiations with a wide variety of partners, allowing you to have a good variety of options to fit within your budget.
We also understand that every business operates according to its own values and culture. That’s why we’ll help you find a PEO that reflects and supports who you are — while ensuring total compliance with all relevant regulations.
Typically, all of the packages cover the essentials: work comp, payroll, HR, healthcare plans and 401(k) retirement plans, assistance with hiring/recruiting, payroll tax filing, and much more. Trust us, you may be surprised at just how comprehensive a package you can afford when it comes to a PEO, thanks to our expert negotiations and purchasing power.
Once we’ve worked together to find a PEO option to benefit your company and your employees — at a price you’re happy with — you’re then free to focus on the more immediate challenges of running your company. The PEO takes over all of the administration and paperwork allowing you to focus on your core competency.