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How much does an employee benefits program cost?
I run a small business, and understand that offering benefits is important in securing good employees. But they're so expensive! How much does a good employee benefits program really cost? Are there cheaper options for small business owners?
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3 Answers
Marilyn, I would turn that around and ask instead what do you want your employee benefits programme to generate as a return to the business? If you are looking to reward employees over and above their basic pay package then presumably you have a reason/intention behind doing this - otherwise why would you? In my experience getting to the bottom line value of an employee in terms of cost, investment and return will give you a benchmark against which to then decide what you want to invest and how is the best way to go about it to bring out the best discretionary effort from the recipients. Securing good employees is not just about money, its also about the signature experience that you offer that makes YOU the employer of choice rather than someone else.
Marilyn, my suggestion would be the following.
1. Decide how much expense you can afford to add to your business for your benefits program.
2. Try and find out what similar companies in your industry provide in the way of benefits to their employees .
3. Talk with you local chamber of commerce since some offer employee benefit programs for their members and usually they are at a reduced cost.
4. You might also want to talk with a benefits broker that works with companies your size and they might be able to help find a reasonable solution. You can probably get a recommendation on someone from your outside accountant, lawyer or again ask your local chamber.
The final answer really comes down to" what is the right solution for you and your business". Doesn't mean you have to offer the same type of benefits package as a Fortune 500 company, but you do need to think about offering one that will attract the right type of employees to your business.
The cost of your Employee Benefits package is usuallly lumped in with the Compensation budget. As you create your plan for 2010, consider how much you would like to budget for total compensation and use that frame for the Benefits budget.
Get local referrals for Brokers to get quotes for Health Insurance and Ancillary plans like Dental or Disability. Most Ancillary plans can be offered to your employees at no cost to your or your company. Colonial Life (my company) will even install your Section 125 at no cost to you as well as add many other benefits your company will find beneficial like benefits statements and employee communication so your employees know the value of their benefits.
If you are not at a point yet to meet the participation requirement of Major Medical, look to an ancillary carrier to get you started with a plan that is fully voluntary and requires no employer participation.
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