Employee Benefits a Big Deal at Small Firms

Posted: Jun 30, 2008 12:01 AM

One of the issues that continually vexes small employers is how to keep good employees on the payroll.

Once an employer is able to find a good employee, they want to know that they will be able to keep that worker around longer than six months or a year.

Yet, smaller employers seem to struggle more - or at least they are more vocal about in their complaining - over this issue than larger employers.

Employee benefits might just be the secret weapon small employers need.

Small businesses often feel hamstrung because they can't afford a variety of benefits that many larger companies offer. Yet, a recent survey by MetLife of 1,380 full-time workers and 1,650 decision makers in smaller companies reveals a high interest in employee benefits.

Fifty-five percent of small employers say benefits play an important role in keeping workers on the job, but only 34 percent of workers in small businesses say that benefits are enough to keep them at the company.

Contrast that with the 53 percent of employees at larger companies who say benefits area an important reason to stay with their current employer.

"It is important to realize that investing in benefits does not have to equate to a financial investment," says Robert Bucci, a MetLife vice president. "Supporting voluntary benefits in the workplace can help address the challenge of expanding the breadth and depth of a benefits program to improve employee satisfaction without adding to the employer's overall benefits spend."

Workers in smaller companies also don't think their benefits are as good as those in large companies, even though a higher percentage of small employers pay all of the costs of benefits such as medical, dental and vision as compared to larger companies.

Workers in smaller companies also are less likely to have taken steps to assess their life insurance, retirement income and disability insurance needs than those in larger companies.

MetLife believes that these workers are probably better off than they think.

"The MetLife study reveals that small employers proportionally are paying more for benefits than larger competitors, yet their return on that investment is less," Bucci says. "Without the advantage of economies of scale, smaller employers need to be innovative in their benefits implementation, from the inclusion of voluntary benefits, to adding health and wellness programs, to increasing the flexibility of schedules to permit greater work/life balance."

Many employers find that their benefits are not as appreciated by the work force as the companies would like. Often, part of the reason is that employees don't understand their benefits or use what is offered to them.

Companies need to be attuned to the needs of their workers and structure benefit programs accordingly. A benefit that goes unused is really no benefit in the eyes of employees. Companies need to remember that.