When should a startup or small business offer benefits for employees? When a company first launches, it can be a challenge to find the funds for salaries and benefits. However, as revenue grows, companies often hit a point in their development when it's important to offer benefits for employees in order to stay competitive.
Employers who currently offer benefits may find that they need to re-evaluate the package of benefits offered to remain competitive. Here's a closer look at four signals to re-evaluate your benefits strategy.
Is It Becoming Hard to Recruit Top Talent?
Whether you're trying to recruit a customer service rep or a top programmer, each candidate will assess your total compensation in light of their salary history and other offers they're seeing on the market. Benefits – such as healthcare and retirement benefits – add to an employee's total compensation. If you're having difficulty attracting and recruiting top talent, it may be because you don't currently offer benefits or the benefits you offer are less than what competitors for talent are offering. In particular, if prospective hires get cold feet after asking about your benefits package or seeing an offer sans benefits, that may be your signal it's time to take the leap.
Are You Experiencing Turnover?
Employees leave jobs for a variety of different reasons; from family demands to wanting to pursue opportunities in entirely new fields. However, compensation can play a big role in the equation of whether to stay or leave a current role. If you are experiencing turnover, it's time to ask the people who are leaving what role benefits had in their decision-making process. If workers are facing high healthcare costs for purchasing a private plan, for example, it may be important to evaluate whether that's leading to attrition.
Is Employee Morale Flagging?
Drops in employee morale can provide a useful barometer of whether your benefits are on point. For example, employees who are supported by benefits don't have to worry as much about the future, because they're saving for retirement and have insurance to help with medical costs. When these issues are interfering with productivity, it may be time to evaluate your benefits package. At the same time, morale can wane when employees feel undervalued. If your key talent believes that benefits should be part of your compensation package, now's the time to determine whether that's feasible for your business.
Has the Industry Standard Shifted?
There may have been a time when companies in your industry didn't offer benefits as part of their standard compensation packages. However, industry best practices evolve and companies are competing for top talent in tight markets. When a lack of employee benefits puts you behind the competition, it's time to consider whether your approach to benefits has become outdated. Staying on par with industry trends can help boost your reputation, and helps ensure that you're attracting and retaining the best people possible.
At a certain point in their evolution, startups and small businesses reach a point where they need to consider offering benefits or offering a different group of benefits to employees. From the changing expectations of your workforce to being in a better financial position, offering employee benefits can help you attract and retain your industry's best talent.