3 Essential and Popular Benefits That Even Small Companies Can Provide for Employees (and Why These Matter)

Team collaboration in modern office workspace

Businesses need to offer compelling benefits to employees as a means of getting the right people interested in working for them, and moreover keeping them committed to the company rather than seeking greener pastures elsewhere.

Smaller organizations might feel incapable of competing with the big players in this regard - but all it takes is knowing what benefits actually matter, so here are the main perks you should be providing all team members to keep them happy, satisfied, and stable in their roles.

Safe Harbor 401(k) Plan

When it comes to retirement savings, the Safe Harbor 401(k) plan is a top-tier choice that even small companies can leverage to attract and retain talent. Here’s why this benefit is so compelling:

  • Immediate Vesting: One striking advantage of the Safe Harbor 401(k) plan is that contributions made by employers are immediately vested. This means employees have full ownership of their funds as soon as they are deposited - which is undeniably attractive compared with alternatives.
  • Simplified Compliance: These plans automatically satisfy non-discrimination tests that apply to traditional 401(k)s. For small business owners, this translates into less administrative burden and lower compliance costs - making it easier to justify.
  • Higher Contribution Limits: Employees can contribute more to their retirement savings compared to other plans. This not only aids in faster growth of their nest egg but also offers better tax advantages both for them and for the business.

In short, this is the kind of benefit that enhances your company's reputation as a caring employer that invests in its people's long-term well-being. And given that businesses face collective costs of $1 trillion annually as a result of employee turnover, even small steps to reduce this can pay for themselves many times over in no time.

Health Insurance

Offering comprehensive health insurance is another benefit that can significantly distinguish your small business from the rest of the pack.

Here's how this benefit shapes a positive workplace:

  • Enhanced Employee Health and Productivity: With good health coverage, employees are more likely to seek preventative care and treat illnesses promptly, which reduces absenteeism and boosts productivity. For instance, obesity can cause a 56% rise in the number of days of missed work each year, so coverage that includes support for this widespread condition is good for company growth as much as for the individual.
  • Recruitment: Quality health insurance is often a dealbreaker for potential hires. Offering this can make your job offers more attractive compared to those from companies that skimp on healthcare benefits. This is particularly important among Gen Z employees, with a study from Zippia finding that health insurance is the most sought-after perk among 32% of this demographic - ahead of remote work and retirement-based provisions.
  • Tax Benefits: Providing health insurance can also be financially advantageous for your company. Typically, both the employer’s and employees' premium contributions are tax-deductible, easing the overall financial burden of this benefit. It’s not just freelancers who benefit from understanding this aspect.

Basically, health insurance provision not only supports the physical well-being of your team but also fosters a sense of security, encouraging them to stay with your company in the long term, rather than using you as a stepping stone to their next role.

Flexible Working Hours

Flexible working hours are more than just a trend - and we’ve seen a marked shift in traditional employment structures over the past few years, with 20% of global workers adopting shorter or more adjustable weekly hours for their careers.

This is especially significant for small businesses looking to stand out, so here's why this benefit is crucial:

  • Enhanced Employee Satisfaction: Flexibility allows employees to create work schedules that better fit their personal lives and responsibilities outside of work. This autonomy can significantly increase job satisfaction and morale - with 77% of respondents to one survey citing the value of flexibility as more important than having high-end business premises available to them.
  • Increased Attractiveness to Diverse Talent: Accommodating various lifestyles, from parents needing school-run adjustments to individuals pursuing further education, lets your company become more appealing across a broader swath of the potential workforce.
  • Reduced Overhead Costs: With employees choosing staggered start times or working from home options, you might find less demand for office resources, which can lead to savings on utilities and office supplies.

Embracing flexible working hours not only empowers your employees but also builds a trusting, inclusive workplace culture tailored to modern needs. And inclusivity can double profits, so it’s not just an altruistic choice either.

Wrapping Up

While just three benefits aren’t enough to create a comprehensive benefits package for small business employees, these form a solid foundation on which the rest of your strategy can be constructed - so start here and see what other upsides you can offer to engage and satisfy employees.