More than half of small businesses (56%) plan to offer new benefits to their employees in 2019, according to research from Clutch, the leading B2B research, ratings, and reviews firm. Clutch surveyed 529 small business owners or managers to learn about their 2019 employee benefits plans.
Small businesses offering new benefits are most likely to offer paid time off (19%), health benefits (15%), and retirement benefits (11%).
Offering new benefits can reduce employee turnover. These benefits are often less expensive over time than the cost of recruiting and training new employees. “You’ve already invested the time, energy, and money to train [your employees],” said Bethany Holliday, Director of Human Resources for Cornerstone Insurance Group & Employer Solutions. “It costs a whole lot less to keep people happy than it does to try and find new people.”
Thirty percent (30%) of small businesses do not have formalized HR resources such as an in-house HR staff, outsourced HR functions, or a contract with an HR consultant. Of companies without dedicated HR resources, only 1 in 10 (10%) offer benefits to their employees. Meanwhile, roughly two-thirds of companies with HR resources (64%) offer benefits to their employees.
Experts say that small businesses are disproportionately likely to have a formalized benefits and HR structure as they grow. “I think organizations see the value in having an HR person or working with an HR consultant,” said Matthew Burr, Founder and President of Burr Consulting. “Just to understand how to do certain things and really understand how to execute … I don’t think there’s an opportunity anymore just to skate by.”
Nearly one-third of small businesses offering new benefits (30%) are doing so to fulfill employee requests. More than one-quarter (27%) are doing so as a means of improving morale and reducing turnover. Far fewer companies are offering new benefits because they are required by law (13%) or as a result of union negotiations (9%). HR experts believe that small businesses will continue to respond to their employees’ desire for more robust benefits.
“We kind of shifted from paying a lot to, now, offering a lot of benefits,” said Christopher Willatt, Founder and Owner of Alpine Maids. “HR is really geared toward convincing our employees that this is a great job and doing everything to retain them.”