Monday, 30 October 2023
by Rose White
As a small business owner, you’re no doubt aware of how important it is to retain talent. Every time you need to hire someone new, it takes time, effort, and money to make that happen. If you can hang onto your current staff, you stand to save in all of those areas.
Raising wages is a good way to entice employees to stick with you. But it’s just as important to offer up the right benefits. Here are some perks you may want to consider offering in 2024 if you don’t offer them already.
A recent CNBC survey found that only 60% of Americans have access to a 401(k) or similar employer-sponsored retirement plan. It’s not always so easy to offer a retirement plan because the costs can be high. But you should know that a 401(k) may not be your only option. If you own a small business, you can look into alternative plans like a SEP or SIMPLE IRA.
Either way, if you can offer up some type of match in addition to simply providing access to a workplace plan, you’ll be doing your employees an even greater service. And you should know that if you go the SEP or SIMPLE IRA route, there are matching requirements for employers you’ll need to adhere to anyway.
Offering health insurance is essential, and that’s something you probably know. But simply offering health coverage may not be enough.
This year, workers with subsidized employer health plans are paying an average of $6,575 for family coverage and $1,400 for individual coverage, according to the Kaiser Family Foundation. If you want to really help your employees, subsidize a large portion of their healthcare premiums so their out-of-pocket burden shrinks.
A whopping 63% of Americans don’t have enough cash reserves to cover an unplanned expense costing $500, says SecureSave. Just as it’s important to offer your workers access to a retirement plan, so too does it pay to offer them an emergency savings account that’s funded directly from payroll. If you’re willing to kick in some funds, even better.
Now, you might assume that if you’re offering your employees retirement plan access, you don’t need to offer a separate emergency savings account. But remember, 401(k)s and IRAs impose penalties for early withdrawals — those taken before age 59 1/2. A retirement plan like that isn’t meant to serve as an emergency fund.
PeopleKeep reports that the cost of losing an employee can equate to six to nine months of their salary. In other words, losing an employee who makes $90,000 a year could mean spending $45,000 to $67,500 on a replacement worker when you account for human resources costs, recruiting, and training. Ouch. If you’d rather save your business money, do what you can to retain the talent you already have by beefing up your benefits package to the best of your ability.
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