Small businesses with fewer than 100 employees represent the vast majority of employers in this country. But these companies may be missing out in a big way when it comes to the benefits packages they could offer, according to Colonial Life & Accident Insurance Company.
“Although small businesses typically offer leaner benefits packages than their corporate counterparts, there’s no reason they must,” says Steve Bygott, assistant vice president of marketing analysis and programs at Colonial Life. “Many of them simply have preconceived notions about employee benefits that hold them back from offering more competitive benefits packages.”
A recent LIMRA survey indicated only 47 percent of small businesses currently offer insurance benefits to their employees. 1 Bygott believes five misconceptions small companies have about employee benefits may be to blame.
Cost concerns. Small businesses operate on tight margins and tend to be especially concerned about the cost of employee benefits. They often aren’t aware of other benefits options available to them.Too few employees to qualify. Many small business owners think benefits are available only to large companies with 50 or more employees. This simply isn’t true. Many insurance products are designed for businesses of all sizes, with some covering groups as small as three employees. Lack of employee interest. Though small business owners may believe otherwise, workers actually are interested in additional benefits. In a Colonial Life survey of employees, 78 percent of them showed at least some level of interest in purchasing additional, reasonably priced supplemental insurance. 2 Fear of administrative burden. Most small businesses have little to no dedicated HR resources and worry that adding more benefits will only contribute to their already growing administrative burden. Small businesses should look for a carrier partner that will provide support for them and their employees before, during and after the benefit enrollment. A good carrier will work to understand the needs of an employer’s administrative staff and develop lasting relationships with the small business. Lack of knowledge about voluntary benefits. Voluntary benefits are widely available to the U.S. workforce, but 24 percent of small businesses still don’t offer them. 3 Voluntary insurance is typically employee-paid and offers employers a way to expand their benefits packages at little to no direct cost. “Voluntary benefits offer a cost-effective solution that can help even the smallest employers compete effectively with the big guys,” says Bygott. “By addressing these common misconceptions about employee benefits, small businesses can provide greater financial protection to even more working Americans.”