Employees value their workplace benefits nearly as much as their salaries. A Glassdoor survey found that 57 percent of workers rate perks and benefits among their top factors when choosing whether to accept a job. But when your small business startup is still getting its feet off the ground, what can you offer that will help you stand out to top candidates?
Here’s your guide to building a small but mighty benefits package on a budget.
What Benefits Do You Need to Offer?
The government requires you to provide some employee benefits. You need to pay for federal unemployment insurance on behalf of your employees, as well as part of their taxes for Social Security and Medicare. When you set up payroll, your payroll software or service provider should calculate how much you owe the government per employee.
Most states require you to buy workers’ compensation insurance for employees, too. This covers their medical bills and replaces part of their salary if they get hurt on the job. In some areas, local requirements might have you provide paid sick or family leave for your employees.
If your startup has at least 50 full-time equivalent employees, you’ll also need to provide health insurance under the Affordable Care Act. However, chances are you’re not required to set up health insurance just yet. Any other workplace benefits you might offer is entirely up to you.
What Benefits Do Your Employees Want?
In 2017, the Harvard Business Review asked U.S. employees what workplace benefits would make them consider accepting one job over another that paid a higher salary. Health benefits topped the list, with flexible hours, work-from-home options, more vacation time, student loan/tuition assistance and maternity leave following just behind.
As you design your small business benefits package, ask yourself what kind of workplace culture you’re trying to develop. A tech-focused business might try to attract employees with the opportunity to work from home. Of course, that logic isn’t bulletproof — just because your small business startup is in the fitness space doesn’t mean your employees would prefer a free gym membership over extra snacks in the office. Survey your employees to see what they want, and use their responses to make sure you’re not wasting your money on a benefit they won’t use.
No matter what field you’re in, though, you probably want your workforce to be as productive as possible. So, think about how a given benefit could help your organization run better.
For instance, the lack of strict divides between departments makes it easier for startup employees to try different roles. Giving employees time to receive training and develop their skills could be a perk for you and your employees alike. An even simpler idea is to provide the occasional meal. If a big deadline is coming up for your team, bagels in the morning could go a long way toward easing some of the tension and keeping your employees’ energy up.
What Benefits Can You Actually Afford?
Offering every in-demand benefit on the planet sounds wonderful. It also sounds expensive. But there are ways to make your benefits more affordable.
Start with health insurance. It’s something almost every employee wants, but you don’t have to empty your pockets to attract talent. You could set up your program so that employees cover part or all of the cost of their monthly premiums. That may not sound like a great deal for the employee, but it’s actually still a solid perk — even if employees pay for the whole thing, they’ll still benefit from the discounted rates insurers offer for group plans.
Beyond that, focus on the benefits that don’t cost your organization anything. Flexible scheduling and the option to work from home are huge boons to employees, and you won’t have to drop a penny for them. Be generous with time-heavy benefits — they could make up for not offering cost-heavy benefits like tuition reimbursement.
What Happens as You Grow?
If things go right, you’ll have more employees in your organization as time goes on and the business grows. When you only have a few employees, setting up benefits is less urgent. Your small staff likely realizes that the business is fighting just to keep growing, so they won’t expect as much.
Rather than formal benefits, you might let these employees know that they could become eligible for a promotion when you expand. Showing you care about their professional growth from the outset is a great way to build loyalty, even if you can’t offer them the most generous package.
As you grow, it will make more sense to set up benefits like group health and life insurance — something that may become a government requirement for your business down the road.
Remember that employees who come to work at your startup are making a bet — and putting in the work to make that bet pay off. Offering the right benefits within your budget helps show that you’re making a bet on them, too.
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This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.