If your business wants to attract and retain top talent, you’ll need to provide employee benefits that can not only improve employee retention rates but make them happier, healthier employees. Choosing a benefits provider is a difficult decision. You must evaluate the different vendors and consider healthcare and benefits costs, your business’ budget, and the needs of your employees. Not only that, but it’s important to note how crucial it is for small businesses to offer and promote their benefits. Here’s how you can easily choose the right benefits provider for your business.
Know the Types
There are four types of employee benefits providers. They are:
As a business, you’re already likely familiar with insurance companies. You can use your current insurance company’s network to find and offer important employee benefits, including health and dental insurance. Working with an insurance agent can help you understand a company’s offerings for employers.
You can choose to work with a captive agent for one insurance company or an independent agent who works with multiple insurance companies to give you more options. Independent agents are paid on commission, so they may pair you with higher-priced companies to get a higher paycheck. If you’re working with an independent agent, it’s up to you to do some research of your own as well.
You can also work with an insurance broker who will work on your behalf to find the best benefits for employees.
Benefits Administration Software
Benefits administration software helps your business administer benefits to employees and track their participation. This software helps your employees and can make some HR processes easier. In addition, benefits software partners with brokers to offer benefits, and others employ brokers to work directly with clients.
An advantage of working with this software is it can be used as part of your HR suite by deducting benefits costs from payroll. It also houses all employee data in one location.
Using benefits administration software has a few drawbacks, though. If your software isn’t intuitive, it can make enrolling in benefits difficult for employees.
Professional Employer Organizations
Professional employer organizations (PEOs) act as your HR department for a fee to handle everything from recruiting and payroll to benefits administration. Entering a co-employment relationship with a PEO means they take responsibility for the employees, becoming their legal employer and paying taxes on their paychecks while providing employee benefits.
A PEO can offer more comprehensive employee benefits at lower rates because they act as a large enterprise for many smaller companies.
PEOs are a great option for small businesses with fewer than 25 employees. However, after 100 employees, a PEO becomes more expensive than having an internal HR department, so if you choose to work with a PEO, be aware that growing with them might not be an option.
Niche benefits providers specialize in ancillary benefits. For example, one business may provide its partners with health insurance options through partnerships with insurance companies. The options offered by niche providers are limited, but it might be ideal for a small business, especially if your credit union offers it.
Other companies specialize in niche benefits such as tuition reimbursement. Because some unique employee benefits aren’t common, niche providers might be your only option.
Consider Employee Needs
The first step for selecting a provider is determining what benefits your business should offer. Health insurance is the most common employee benefit, but you can also offer dental or even pet insurance, depending on the type of employees you have. If you’re unsure what types of benefits your employees would appreciate, consider asking them. You can also send out an anonymous survey that asks them to choose the most important benefits and decide based on the popularity of answers.
Consider Your Budget
Offering employees benefits costs your business, but it also allows you to attract and retain the best employees, saving you money in the long run. No matter what, you should ensure you have a budget to cover employee benefits. Once you have a list of the types of benefits, prioritize them and start doing your research to determine how much each will cost to see if it’s something your business has a budget for. If you can’t afford to give your employees all of the benefits you want, start by offering health insurance. From there, you can add benefits as your business grows.
Know What to Look For
Not all benefits providers are the same. Each will have different pros and cons to working with them. Consider the following when choosing between providers.
As mentioned, employee benefits cost money, but lower costs can help your business save money while meeting employee needs. Many top providers offer a percentage of savings each year and compare their plans to their competitors. The best providers make it easy to identify how much money you can save by working with them.
Flexible Benefit Offerings
Companies specializing in working with small businesses should offer flexible options, especially regarding health plans.
Quality Customer Support
Very few business owners know everything there is to know about employee benefits, so you must have customer advocates that can help you understand the different types of plans available and what the benefits are of each. In addition, these support representatives can ask you a series of guided questions to help you find the best plans based on your business and its needs. Not only that, but your employees should also have assistance when choosing their benefits.
Choosing the Right Provider
Finding the best provider for your business and its employees can be difficult if you don’t know exactly what you need. So before you start offering benefits for the first time, speak with your employees about the types of benefits they want to have moving forward. While not all of their requests will align with your budget, getting their insight can give you a starting place for researching the types of benefits available. From there, finding a benefits provider is a matter of doing your research to learn about the different types of plans they offer.
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. Matt is passionate about marketing and business strategy and enjoys San Diego life, traveling, and music.