What Are Group Benefits?
Most people who have ever been in the workforce are familiar with the term “group benefits”. These can include a number of services or perks for employees, generally, those that are employed full-time. Group benefits can include, but are not limited to:
- Medical insurance (as well as dental and vision insurance)
- Life insurance
- Disability income insurance (short and long-term)
- FMLA (Family and Medical Leave Act)
- Retirement Savings Plans
Employers can choose to include some or all of these group benefits services to their employees, depending on their needs.
In the past, only large corporations have been able to offer these valuable benefits to their workers. Fortunately, traditional group benefits and small businesses have been changing this climate. Let's take a look at the advantages small business benefits groups can provide to both employers and employees.
For Small Businesses:
In the past, it was simply not feasible for many small businesses to offer their workers group benefits of any kind. This is unfortunate as many of these businesses probably had some great, dedicated employees over the years, but were lost to a larger company that could provide them the security these group benefits offer.
Although it is an added expense for employers, it doesn't have to be a costly one. As we mentioned, offerings for group benefits for small businesses have drastically changed in recent years. Much more tailoring is available to small business owners now, letting them choose just what they need and letting their employees do the same. Working with finance professionals focusing on creating one-of-a-kind, cost-effective plans can benefit both employers and employees.
Offering benefits is mutually beneficial to both the employer and employee. Workers are much more likely to be content with their jobs, creating a pleasant work atmosphere. Businesses are more likely to retain their employees, avoiding the hassle of continually training new individuals and putting a strain on Human Resources employees as well.
Offering group benefits is also an incredible employee recruitment strategy. This works because it helps small businesses be able to compete with similar, larger businesses to attract hard-working, quality workers too.
Now that we've touched upon some of the ways group benefits help employers and their valuable workers, let's dive in further as to why these are such powerful employee retention strategies.
How Group Benefits Help Retain Employees
It is no secret that group benefits not only help attract quality workers, but retain them as well. There are a multitude of reasons for this.
For starters, group health benefits for small businesses make it worthwhile for employees to keep working for that company. As mentioned above, these employees won't be seeking other jobs that do offer health insurance, retirement plans, and more. In other words, loyal employees equal a lower turnover rate for small businesses.
With dedicated, long-time employees also comes increased productivity for the company. These employees will become professionals at what they do. This is beneficial for small business owners because they gain problem-solvers and innovative thinkers to help their companies grow further. Aside from improved overall company performance, customers will be more satisfied for the reasons above as well. Better services and products mean more repeat customers in the future.
If the above points aren't convincing enough, surveys have shown that healthcare insurance is the top-ranking benefit job-seekers prefer. (Followed by vacation days, performance bonuses, paid sick days, and retirement plans.) There is a simple reason for this: It is much more costly for individuals to self-insure than to buy into group insurance plans. It's easy to see the appeal of discounted insurance plans that everyone needs.
We've covered the reasons group benefits help with employee retention. Now let's talk about how they help even in the employee recruitment process.
How Group Benefits Help With Hiring
Sure, group benefits are beneficial to both small business owners and their current employees. But, they can also help attract the kind of workers they're looking to add to their team.
Studies have shown that businesses that offer group benefits have “above average effectiveness in recruitment and retention”. Many of the reasons they help retain employees helps attract them too.
Group benefits attract employees that are “in it for the long haul”. This can help out all of the current workers by putting less of a strain on them. HR personal can expect to spend less time reviewing applications, setting up, and performing potential employee interviews because of the lower turnover rate. Employees in charge of training will be less taxed as well because there won't be a continuous stream of new employees, leaving them to be more productive at their individual tasks.
As previously mentioned, benefits are a major deciding factor for many job-seekers who are looking for a rewarding, long-term position. When a business offers them, it shows that the owners care about their employees' well-being. After all, employees are any business' greatest asset!
It's obvious why group benefits are such a draw for job-seekers. But, small business owners can make them even more attractive.
Successful Organizations Tailor Their Benefits
More and more companies are altering their benefits plans to cater to the evolving needs of their employees. Small businesses know their employees and communities best. City residents have different values and needs than rural community members. And, if you're ever unsure you're hitting the mark, do some research. Ask your employees and even potential employees what kind of benefits they already enjoy or would like to see offered.
Offering more options on group benefits has shown to increase participation in them. This not only leads to more affordable options for employees, but the small business owners offering them as well. It's a win-win for everyone.
Benefit and Financial Strategies, LLC. has been serving the financial needs of small and large businesses alike in the Flagstaff, Arizona area since 1988. We work with you to create personalized, affordable employee benefits and retirement plans. Let us assist you in coming up with the perfect group benefits plan for your small business' needs.