The Small Business Benefits Package

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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As a small business owner, winning over and keeping the best employees can be difficult. The right benefits package can make a world of difference: You can improve employee morale, make it easier for your employees to come in to work every day and make your business run a little more smoothly.

On top of offering the right benefits for your employees, it can be particularly important to create benefits that you, the business owner, can take advantage of.

When to Add a Benefits Package

Recognizing the point when offering benefits, no matter what kind, can be difficult. In many cases, offering costly benefits from the day you open your doors simply isn't cost effective. But as your business grows, you increase the size of your work force, or your personal needs increase. Adding certain benefits can make a word of difference.

Rashelle LeCapitan, the president and founder of Connecting Cultures, found that offering health insurance as a benefit was crucial to her company moving forward.

We wanted to become a competitive employer throughout our community. More importantly our industry did not have full time positions available for healthcare interpreters. The goal of the company was to provide employment opportunities for bilingual individuals wanting to connect their communities through language services. In order to do this, we felt providing health insurance was critical to attract and maintain a professional staff. It was also important to provide benefits that I, as owner, was able to take advantage of.

Being aware of your employees' needs can be as simple a matter as sitting down with them and talking over the matter. It is crucial to handle such a situation delicately, of course. The concern is that many employees may want benefits that you are not yet able to offer and it's possible to create a problem if you are not absolutely clear when you discuss the circumstances.

However, as long as you are aware of such concerns before you start the discussion, you can typically head off issues from the beginning. And, after all, it's important to get information on what benefits would be suitable for your employees. Even within a single type of benefit, such as health insurance, there can be wide variations between plans. What may be right for a young, single employee may not be so helpful for an older employee with a family.

What Benefits to Offer

The standard benefit most employees look for is health insurance. It can be a critical component of the package that you offer, but there are alternatives worth considering. For instance, many business owners find that a traditional health insurance plan isn't the only solution to their employees' needs: a health savings account or a monthly allowance can be useful options.

For many employees, benefits such as assistance with public transportation or the opportunity to telecommute can be particularly useful. While it is not necessary to directly involve your employees with the process of choosing specific benefits, it is important to be aware of their needs. LeCapitan's choices were based first and foremost on her business' financial capabilities.

Health insurance came first. Second was paid vacation and holidays. Currently we offer dental and AFLAC as well," said LeCapitan. "The intangible benefit that is also available is our flexibility and understanding for the personal needs of our staff. As an example, and within reason, an employee may not be penalized for having to stay home with their sick child. Small businesses can offer benefits that large corporations do not and vice versa.

Be creative with your choice of benefits. You can often negotiate a better company rate for certain services your employees need than they can get for themselves. A gym membership, for instance, can help your employees stay healthy and (as long as you have more than one or two employees), you can negotiate a group rate for a membership as a benefit. It's easy for your benefits package to serve multiple purposes.

Working With a Benefits Provider

There are many companies that have put together benefits packages with small businesses in mind, and as the new health care reforms come into effect, it is likely that even more packages will be available. David Jenson, the managing director of Oliver Russell, chose to work with A Plus Benefits because the company provided easy offerings that met the company's employees' needs. Jenson notes:

Our employees recognize the importance of good benefits and appreciate that we provide the best options for them and their families. With A Plus, we're able to offer our team broad medical and dental benefits as well as options that allow them to pick and choose plans that work best for them; everything from Health Savings Accounts (HSAs) to traditional PPO plans.

When working with such a company, it's important to make sure that your benefits provider is reliable. Jenson says:

Employees rarely worry about payroll or human resource issues until there is a problem or mistake. It only takes one incident for an employee to lose trust and start questioning the company. In a time where employees expect benefits, the ability to provide a generous benefits package can make a company very competitive and can go a long way towards attracting top talent.

Other options for finding a benefits provider can include looking to your business' local memberships, such as chambers of commerce or professional associations. LeCapitan says:

Our initial step to finding insurance providers was working with our local chamber of commerce. They have a health insurance program that takes all of their members as one group to provide more reasonable rates for their members' employees. The insurance agent that had an existing relationship with my co-owner was our initial vendor. Ultimately we switched vendors as we grew and as our needs changed.

Working with an individual agent can also be an option. If you handle most of your business' insurance policies through the same agent, you may be able to negotiate a lower rate. Get a quote from as many sources as possible as a starting point.