Offering Employee Benefits

Offer an attractive benefits package that doesn't break the bank

Many small business owners think they can't afford to offer employee benefits. In reality, small businesses can't afford not to offer a benefits package of some type. Although insurance and other benefits can be costly, offering employee benefits can pay off in the long run.

An attractive benefits package can help you recruit and retain quality personnel. It can also boost productivity and employee morale. The most common employee benefits offered include:

  1. Paid time off
  2. Health insurance
  3. Disability insurance
  4. Vision and dental insurance
  5. Life insurance
  6. Retirement plans

Shop in online employee benefits malls

Several Web-based services offer an efficient way for small businesses to outsource employee benefits, including group medical, dental, life and 401(k) products.

Offer paid time off

Although you aren't required by law to offer paid vacation, holidays or sick leave, most small businesses do. In fact, you're likely to have trouble recruiting good talent without a vacation policy.

Find affordable health insurance

Although health insurance costs are skyrocketing, it's one of the benefits employees want most. Whether you choose an HMO, a PPO or a POS, look for an accredited plan that offers adequate accessibility to physicians, affordability and quality. Choosing a health insurance plan that provides prescription benefits makes your plan even more attractive to employees.

Disability insurance

Disability insurance can give your employees peace of mind. This common benefit provides employees with a percentage of their salary if they become injured or ill and can't work. Higher-priced plans provide benefits if an employee is unable to perform his or her job even though they could perform other tasks; cheaper plans only provide benefits if the employee is completely unable to work.

Vision and dental insurance

Vision insurance plans are fairly basic and there are only a handful of providers, making it relatively simple to choose and administer a plan. Choosing a dental insurance plan isn't so easy, with dozens of providers offering a vast array of options.

Life insurance

Offering life insurance shows your concern for your employees and their families. Group term life insurance is often the most affordable option for small businesses.

Retirement plans

Smaller businesses that offer retirement plans generally offer a 401(k), a SEP-IRA or a Simple IRA. 401(k) plans are generally most appropriate for companies with more than 20 people. If you employ fewer than 20 people, consider a SEP-IRA or a Simple-IRA.

Choose an administrator

If you don't have a dedicated HR employee, delegate administration of employee benefits to a single person. Facilitate these duties by downloading benefits forms available online.
  • Additional employee benefits you may want to consider offering include flextime, parking privileges, education reimbursement and company discounts.
  • Benefits, such as retirement plans and health insurance, must comply with government regulations. Consult a lawyer or benefits consultant before offering a plan.
  • You don't have to foot the bill entirely. Most small businesses ask employees to make a contribution toward their health insurance and other benefits.
  • Survey your employees to find out which benefits are most desirable. Save money by offering only the benefits they want most.
  • If all of your employees are in their teens or 20s, life insurance may not be necessary.

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