As their employee numbers grow, small businesses increasingly seek to offer a competitive compensation package that includes comprehensive benefits, including health benefits, retirement benefits, family leave, and paid time off, according to the findings of a recent survey of small business owners and managers conducted by business-to-business ratings and review firm Clutch.
The results of the survey of 529 owners and managers of small businesses in the U.S. (defined as having one to 500 employees) were released on April 18. Respondents were asked about their benefit plans for 2019.
The findings indicated that nearly half (47%) of the small businesses surveyed offer benefits, and that businesses are significantly more likely to offer benefits as they hire more employees. For example, while just 32% of businesses with 2-10 employees said they offer benefits, 68% of companies with 11-50 employees and 76% of firms with more than 50 employees said they provide benefits.
The results also showed that of the small businesses surveyed that offer benefits, 69% provide health benefits, 52% offer retirement benefits, 48% provide family leave, 45% offer paid time off (PTO), 33% provide in-office benefits, and 17% offer student loan repayment. Of the businesses that offer PTO, 28% reported providing 11 to 15 business days off.
When asked if they plan to expand their benefits offerings in 2019, 56% of the small businesses surveyed said they intend to do so: 19% plan to begin offering PTO, 15% expect to start offering health benefits, 14% plan to start providing in-office benefits, 11% expect to begin offering retirement benefits, 11% are considering offering family leave, and 8% plan to introduce student loan repayment. Moreover, when the small businesses that intend to offer new benefits in 2019 were asked about their reasons for doing so, 30% cited employee requests, 27% said they want to reduce employee turnover, 13% said they are doing so in response to legal requirements, and 9% indicated they are doing so as a result of union negotiations.
When asked about their strategies for gaining access to human resource services, 25% of the small businesses surveyed said they have full-time, in-house HR staff; 12% reported that they have part-time, in-house HR staff; 9% said they contract with an HR consultant, 8% said they work with a professional employer organization, and 6% indicated that they work with an outsourcing service. However, 30% of the respondents admitted that they do not invest in formal HR services.
The survey also found that there is a strong association between having access to formal HR services and offering benefits: whereas 64% of respondents that reported having some level of HR services offer benefits, just 10% of the small businesses surveyed that said they lack access to formal HR services provide benefits.
From Benefit Trends Newsletter, Volume 62, Issue 6
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