Small businesses relying on better benefits to attract, keep workers

Employee Benefits
by Steve Bryson

There are a number of economic factors weighing on small business owners these days, and these could have major impacts on their abilities to hire top workers in their field. However, despite these potential issues, more are now concentrating on providing higher-quality benefits as a means of drawing in these applicants for open positions, and keeping those already working for them in the fold.

Today, slightly less than one-third of all small business owners say they plan to expand hiring in the next 12 months, and more than half say they're going to keep their staffing levels the same, but one problem many may face is retaining their talent, according to the latest Small Business Owner Report issued by Bank of America.

Those that plan to hire generally expect that they will be able to increase the size of their workforces by about 25 percent this year, the study indicates. However, unlike larger companies with potentially deeper pockets, these smaller enterprises may not have the resources to simply give their top workers raises when they want to keep them, and as a consequence are now becoming more conscious of the ways in which they can offer other benefits as a means of keeping top talent, and luring it as well.

Currently, 44 percent of small businesses say they do not offer any financial benefits at all, and less than a third say they offer 401(k) plans to their workers, the report said. However, the number of independent companies that are aware of these issues might be growing these days. Slightly less than one in every five small business owners say their top challenge in retaining top talent is providing the most competitive health insurance and retirement benefits possible. Another 12 percent are concerned about their ability to provide additional perks above and beyond those, which are common among their larger competitors. That might include bonuses, more flexible hours, and child care services to help working parents better handle all their responsibilities.

Small business owners may want to consider the ways in which they might be able to afford these benefits both now and once the Affordable Care Act's coverage mandate goes into effect at the beginning of next year. Many experts note that the requirements of the new law will likely have a significant impact on many small businesses' bottom lines.