July 6, 2011
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What are small business owners’ biggest HR concerns, and how are they using benefits to get the desired results for their businesses? A recent survey by insurance provider Aflac has some interesting insights.
First and foremost, if you think benefits don’t matter to your staff, think again. Benefits are so important to American workers that the majority of those surveyed said they are more likely to take a job offering better benefits—even if it means a lower salary. By offering good employee benefits, the 2011 Aflac WorkForces Report found, employers can improve productivity, attract and retain the best talent, drive greater employee satisfaction, and control costs.
Aflac surveyed both employers and employees at companies in a range of sizes, and found some interesting disconnects in how employers and their employees perceive benefits.
The most important HR issues for small businesses in the survey are:
1. Increasing worker productivity
2. Controlling health care costs
3. Retaining employees
Of small, midsize, and large companies taking part in the 2011 Aflac WorkForces Report, only small businesses named productivity as their primary concern.
What challenges are small companies facing when it comes to benefits? Not surprisingly, understanding health care reform was the top benefits challenge for 64 percent of small employers, while offering quality benefits within a budget was the second-largest benefits challenge for 63 percent of small companies.
When it comes to offering benefits, small business owners’ hearts are in the right place. The top three objectives of small businesses with regard to benefits programs are:
1. Taking care of employees
2. Doing the right thing
3. Retaining employees
Small companies are much more likely than midsize or large firms to say taking care of employees is their number-one objective.
However, employees were less satisfied with their benefits than small business owners think they are. While 51 percent of small employers believed their current benefits packages meet employees’ needs extremely/very well, just 37 percent of workers at small companies said that was actually the case—and 17 percent say their needs are not very/not at all well met. Small firm employees were less likely than employees of midsize or large companies to be satisfied.
Overall, small businesses are less likely than midsize or large ones to offer voluntary benefits (such as life insurance) that employees can purchase above and beyond basic benefits. They’re also less likely to let employees have a say in selecting benefits packages or involve them in decisions about benefits.
One area where small businesses fall down is in informing employees about their benefits packages. Nearly half (46 percent) of employees at small companies say their HR departments communicate too little about employee benefits. In fact, 62 percent of workers get their insurance advice word of mouth from colleagues, friends, and family. Small business owners who fail to effectively communicate about benefits are making a big mistake: 39 percent of employees “strongly agree” that a well-communicated benefits program would make them less likely to seek new jobs.
If you offer employee benefits, you know that doing so is not cheap. Be sure to get the most from your investment by communicating about what you offer and making sure employees understand the value of their benefits and how to maximize them.
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