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Employee Benefits for 2020: Let’s Get Them Right

Are you taking care of your single most important asset?

Employee benefits

As an owner or manager in the highly competitive cleaning and facility services industries, you have a lot to keep up with—technological developments, economic changes, ever-increasing competition, hiring and retention of qualified employees, and more stressors than any of us care to even think about. All these factors affect how companies do business and help to determine how or if you will be able not only to grow but also to sustain the level of success that you have previously obtained.

“If we don’t keep up with all the changes going on around us in terms of the tasks we do every day, we become obsolete,” says Dan Schawbel, partner and research director at New York City-based Future Workplace, an executive development firm dedicated to rethinking and reimagining the workplace.

Employees must grapple with an “always on” work culture, and many leave their companies as a result of being overworked. Employers should recognize what causes burnout and aim to fix it, because it may cost them more over time if they don’t, Schawbel says.

“We have to think about work differently,” he adds. “The future is uncertain … but we can make changes today that will give us a better tomorrow.”

This begs the question: how do we keep and retain the best and brightest in the most difficult
of times?

In today’s employment environment, it is my experience that typical employees, regardless of title or position, are as much concerned about benefits as they are about compensation. As a small business owner, you can no longer bury your head in the sand, hoping the question “what benefits do you offer?” will not be asked!

In her blog, Gusto, personal finance writer Susan Shain supports this idea by indicating that 80% of employees would prefer new or additional benefits over a pay increase. Her advice is that, “… it’s high time for employers to give their benefits a facelift.”

In April, the Society for Human Resource Management (SHRM) conducted its annual survey of employers, both small and large, to gather information on the types of benefits they offer to their employees. The research study was conducted to determine trends and movements in the employee benefits arena including health care, wellness, leave, flexibility, career, and retirement.

A brief summary of SHRM’s findings indicate the following:

  • Employers of all sizes are more likely to increase offerings in all benefits categories than to decrease offerings.
  • Employers responding to the survey felt that health care and retirement benefits are the most important to their workforce.
  • Nearly all organizations provide paid vacations (98%) and sick leave (95%) to some or all employees, with 62% indicating that this is accomplished through a paid time off (PTO) program.
  • Open or unlimited leave is uncommon, as only 6% of respondents indicated that they provide this benefit.
  • Telecommuting has become more widely offered among organizations of all sizes over the last five years, with ad hoc telecommuting (69%) showing the greatest increase. More than a quarter of organizations offer full-time telecommuting.
  • Flexible scheduling benefits of various kinds are available in many organizations. More than half of organizations (57%) offer flextime during core business hours.
  • Professional development benefits tend to differ strongly based on an organization’s size. Smaller organizations will offer a different mix compared to larger organizations.



What does the future look like for the small business owner trying to attract and retain good employees, recognizing that benefits are one of the keys? What should you be thinking about at this point? Shain suggests a thorough review of the benefits being offered—and maybe a complete overhaul.

Let’s look at some ideas that many small businesses are considering.

Health Insurance

According to the Kaiser Family Foundation, since 2008 the average family’s health insurance premiums have increased twice as fast as workers’ earnings and three times as fast as inflation. Below are a couple suggestions to help combat these increases.

Health saving accounts (HSAs) and/or flexible savings accounts (FSAs): Both plans give employees a tax-free way to cover some of the significant increases, but keep in mind that the plans are different. An employee can set up an HSA, provided they have a High Deductible Health Plan (HDHP). Employers can offer FSAs alongside other benefits, like health insurance, or they can provide them as a stand-alone benefit. There’s no requirement to offer both. FSAs continue to remain popular with employers of all sizes.

A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA): An Affordable Care Act-compliant plan gives employers with fewer than 50 full-time employees the option to provide Health Reimbursement Arrangements (HRAs) to their employees instead of offering group health insurance.

Retirement

According to the CFSI Financial Health Score®, a holistic framework designed to assess and track changes in individuals’ financial health, Americans fall into one of three financial health tiers:

  • 70 million people are spending, saving, borrowing, and planning in a way that will allow them to be resilient and to pursue opportunities over time.
  • 138 million people are struggling with some, but not necessarily all, aspects of their financial lives.
  • 42 million people are struggling with all, or nearly all, aspects of their financial lives.

Unfortunately, these statistics indicate that many Americans may not be saving for, or even thinking about, retirement. Based on this, it’s clear that offering a traditional 401(k), and possibly including a company match, would be beneficial. Also consider offering employees retirement planning and investment advice, either online or through one-on-one counseling.

Professional Development

With the ongoing shortage in the labor market, companies of all sizes are looking to continue, or even grow, professional development benefits for all employees. Some examples include:

  • Professional memberships
  • Certification/recertification fees
  • Cross training to develop skills not directly related to the employee’s current job
  • Succession planning and career development
  • Management and leadership coaching
  • Formal mentoring programs
  • Seminars, conferences, and courses geared toward keeping skills current or to stay abreast of industry standards
  • Online training via learning management systems offered during work hours
  • Career counseling

Services

Service benefits tend to be less utilized but are growing in popularity each year. Here are some suggestions:

  • Consider offering an employee assistance program (EAP). An EAP is a confidential workplace service that employers pay for to help employees deal with work-life stressors, family issues, financial concerns, relationship problems, and even drug or legal concerns. It is often available to both employees and their families to help employees remain productive at work.
  • Allow employees to participate and volunteer in community or charity events and pay them for the time they are away from work.
  • Consider a pet-friendly work environment.
  • Organize company-sponsored sports teams open for everyone to participate.
  • Stock your breakroom or kitchenette with free coffee, snacks, and beverages.
  • Offer ESL (English as a second language) classes and/or foreign language classes (non-English).
  • Hold an annual company outing.
  • Provide company-logoed paraphernalia.

Technology

The youngest working generation, Gen Z, is comprised of the most technically savvy employees to enter the workforce. This means that available technology will be a key factor in their decision to join and remain with your business. Gen Z employees may appreciate these types of benefits:

  • Company-owned cell phones for business
  • A stipend/subsidy for employee-owned cell phones
  • Purchase discounts for employee-owned computers and tablets
  • A stipend/subsidy for using employee-owned computers and tablets at work

Miscellaneous Benefits

Many organizations are looking at nonroutine benefits that can serve as differentiators to help land qualified candidates, and that may also help keep star performers from going to your competitors. Some of these include

  • A life insurance policy
  • Short- and long-term disability insurance
  • Accidental death and dismemberment insurance
  • Service anniversary awards
  • Employee referral bonuses
  • Safety bonuses/incentives
  • Tuition reimbursement
  • Credit counseling services
  • Loans to employees for emergency or disaster assistance
  • Identify theft protection
  • Employee discounts on company-provided services
  • Parental leave
  • Wellness tips or information provided to employees at regular intervals such as in newsletters, websites, emails, or via social media. Consider tying in discounts on health insurance premiums for participating in wellness programs.
  • Tobacco cessation programs
  • Onsite health screening programs (e.g., blood pressure, glucose, cholesterol)
  • Nutritional counseling
  • CPR/first aid training

Invest in Your People

While the benefits in these suggestions are nice, offering them to employees is more than just being nice. The intent is to fulfill a very specific goal: to take care of employees. The single most important commodity in each of
our businesses is our employees. They are, without a doubt, our greatest assets.

We spend countless hours thinking about the latest and greatest equipment, tool, or gadget that can help provide extraordinary customer service, thus strengthening our bottom line. Don’t misunderstand me—that is time well spent and making appropriate capital investments is a critical aspect of effective organizational leadership. The question, however, is whether we are spending as much time on the people side of our business.

A survey by McKinsey Quarterly showed that attracting and retaining talent was the biggest reason companies offered benefits to their employees. Providing appropriate benefits also establishes credibility, showing that we believe in our company enough to invest in our employees. Finally, having employee benefits proves that our company is stable, steady, and confident—which can help not only acquire but retain those “A” players who are critical to everyone’s future success.

Clearly, when you have engaged employees you have good performance. Providing more than what the law requires will go a long way to establishing a motivated and productive workforce, even in our very difficult industry. Will some of these benefits pay for themselves immediately? Of course not. But I believe the long-term advantages will greatly outweigh the expense. Just think about your turnover costs for last year and then add those costs up for the last five years. My belief is that you will see a staggering number that will convince you to address your overall benefits program and offerings for 2020.

With the ongoing shortage in the labor market, companies of all sizes are looking to continue or even grow professional development benefits for all employees.

 

Scott Tackett

Scott Tackett

Scott Tackett is a business development advisor for Violand Management Associates (VMA), a highly respected consulting company in the restoration and cleaning industries. He is considered the leading expert in restoration and cleaning for Human Resource Development and Organizational Leadership with over 30 years of experience. Through Violand, Tackett works with companies to develop their people and profits. To reach him, visit violand.com or call 800-360-3513.

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Employee Benefits for 2020: Let’s Get Them Right
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