Offering employee perks may be the best way to overcome the continuing worker shortage that small business owners are still feeling the brunt of, as increased demand for higher wages and competition with larger competitors that can afford to pay workers more continues. Roughly 47% of small business owners cited labor shortages as their biggest concerns right now in the most recent Small Business Optimism Survey conducted by the National Federation of Independent Businesses (NFIB), and most are at their wits end as to how to become fully staffed.
That said, the daunting questions small business owners face are: which industries are suffering the most in terms of employee shortages, and what benefits should be offered to keep employees happy?
Unsurprisingly, industries that employ the most hourly employees and typically offer relatively low wages with no health or retirement benefits seem to be the hardest hit, followed by typically high-stress industries such as health care and education that include frontline workers.
Food Service, Retail hit the Hardest
According to the latest report from the Bureau of Labor Statistics (BLS), the accommodation and food services industry had the highest quit rate in June at 5.7%, followed by retail trade at 4% and nondurable goods manufacturing at 3.2%. The business and professional services industries, which include health care and education workers, showed a 3.3% quit rate.
So, what can small business owners – especially the ones who can’t afford to pay their employees more than their larger competitors – do to attract and retain talented employees? The answer may be found in a single simple word: perks – job benefits that go beyond a simple paycheck. Different industries, however, probably require different perks, as a table server at a restaurant may be looking for different benefits than, say, a full-time paralegal at a law firm.
What are Employees Looking for?
Free pizza in the breakroom on Fridays and discounted gym memberships aren’t going to cut it anymore. The perks you offer to your employees – especially if you can’t afford to pay them more – need to be well thought-out and in line with what can make your specific employees’ lives better, and doing so will make your business less likely to be another victim of “The Great Resignation.”
That said, it’s important to do your research on what workers are looking for from their jobs. If you haven’t, not to worry – we’ve done some of it for you.
Aside from better pay, workers generally want a clear path to advancement and better work/life balance, according to Prudential’s 2022 Pulse of the American Worker study. The study also revealed what benefits/perks workers are willing to take a pay cut for: 45% of employees want benefits such as health insurance and retirement plans, while 27% said they would be willing to stay with a company if it gave them a flexible work schedule. Additionally, 25% said they would stay with a job if it offered a clear path for advancement.
A study of 52,000 employees around the world (including the US) by PriceWaterhouseCoopers found that 40% of respondents would stay at a job that “upskilled” their workers – providing them with on-the-job training for advancement.
The American Psychological Association’s survey of more than 2,000 workers in the US found that 8 out of 10 workers said that mental health will be an important factor when considering a job offer. A survey by SHRM found that, aside from increased salary and health care benefits, increased paid time off, family benefits and flexible work hours are the perks most employees are seeking.
Here are some perks that are currently working:
#1 Minimum Essential Coverage (AKA Limited Medical) Plans. With the federal minimum wage for tipped workers at a paltry $2.13 per hour and $7.25 per hour for other hourly workers with no health or retirement benefits, it’s little wonder that hourly employees engage in frequent job hopping. If your small business is a restaurant or retail shop and employs hourly workers, a low-cost way to gain an advantage over your competitors is to provide a minimum essential coverage plan for your employees.
These are minimal health insurance plans that meet the standards of the individual mandate in the Affordable Care Act (also known as ObamaCare). Sponsoring these plans can come at a very low cost to employers, and they are offered through TRICARE, most Medicaid plans and Medicare, among others. They can also be extended to family members through Medicaid’s Children’s Health Insurance Program (CHIP).
While these types of plans don’t offer great medical coverage, something is better than nothing for your employees.
#2 Unlimited Paid Time Off (PTO) Days. More companies today are offering unlimited PTO days to full-time salaried workers as an added benefit to assist in the mental health of their workers and to respect their desire for better work/life balance. Of course, this doesn’t mean that an employee can take six months off per year.
It does mean, however, that if an employee does his or her job well and completes all of his or her assigned tasks, they can take approved PTO days without the hassle of having to clock in-and-out of a complicated HR system that tracks PTO days. It also gives employees peace of mind that they can take off for unexpected personal and family-related reasons. This is a benefit that can make the difference between your valued employees staying or leaving your business.
#3 Flexible Work Schedules/Work From Home. This one is obvious: office workers got a taste of
working from home during the height of the COVID-19 pandemic, and study after study has shown that installing foosball and ping pong tables in your office space isn’t enough to lure workers back to the office. Many employees are even willing to give up a higher-paying job offer if it means they don’t have to go through the daily grind of commuting.
If your business does operate out of an office, offering at least hybrid work schedules in which employees must come in two or three days out of the week – or not at all – has almost become a requirement if you expect to retain your workers. To do this, your business should be willing to invest in remote technology and offer reimbursements for home office equipment.
#4 Recognition Through Bonuses. Employee recognition can go a long way in keeping your best workers. Even if your small business is not a high margin one, a $250 or $300 bonus every quarter or on their anniversaries will tell your employees that you value their work and may be a crucial element in whether your employees choose to stay with your business or go elsewhere. These small bonuses may also be especially important for small businesses that employ hourly, low-wage workers.
#5 Discounted Mental Health Services. A lot of people – especially frontline workers – were traumatized by the COVID pandemic, and many remain heavily stressed about their families and loved
ones even in the waning days of the coronavirus threat. The pandemic also made workers rethink their priorities in life as they became accustomed to working from home.
In a recent survey from Lyra Health, 92% of US benefits leaders have prioritized mental health assistance for their employees. The pandemic also made workers refocus their energies on gaining happiness and fulfillment in their lives. That said, small businesses that offer assistance with mental health care can gain a tremendous advantage when searching for or looking to retain workers.
Mental health benefits don’t have to cost a fortune for employers. As a small business owner, you can contact a list of therapists in your area and arrange for discounted therapy sessions for your employees. You can also cover the cost of mental health apps such as Headspace and Calm for your workers to use.
#6 Paid Career Training. Workers don’t want to be stuck in dead end jobs, and if they feel like they are in one, they’re likely to leave. While this job perk may not apply to every small business owner, office-based small businesses should consider paying for online courses, or even sending someone to a trade school to learn new skills so that they can advance at your company.
This doesn’t have to be a costly process – paying for an employee to take an online course in digital marketing, for example, may even be free. If you own a construction company, sending some of your laborers to carpentry school to learn how to work on unique projects can make a huge difference in whether you keep your valued employees.
#7 Pet Insurance. This may seem like an odd perk, but it makes sense given that one in every five
households acquired a new pet between 2020 and 2022. In a recent survey by Willis Towers Watson of 238 large US employers, 69% of employers said they will offer pet insurance in 2022 and beyond.
This is a perk that has become especially important as more employees are working from home and – in many cases – only have their pets as companions. If you have a health insurance carrier, there is a good chance that they already offer some form of pet insurance. Some of the most popular insurers are ManyPets, Embrace and Pets Best.
Consider Employee Perks Software
While not for everyone, there is software out there that can assist certain small business owners in keeping employee perks organized and ensuring that the right employees receive them. Software from companies such as Motivosity, Fringe and Reward Gateway can help you to remember employee anniversary dates, calculate how much you need to spend on company perks and organize when payments are due for additional employee benefits. If your small business has 10 or more employees, this option may make sense for you.
Perks are now Essential
Happy workers make for a better, more profitable business. In today’s hiring climate, perks should no longer be seen as extras, rather, they should be viewed as essential ways to retain your valued employees. Carefully research which perks make the most sense for your business, and which ones are the most cost-effective. Offering the right perks makes your business better, and may prevent you from having to constantly post “Now Hiring” signs.