10+ Affordable Employee Benefits Small Businesses Can Rely On

Employer benefits packages boost engagement, and engaged employees are less likely to leave. Gallup suggests teams with low engagement levels have an 18% to 43% higher staff turnover rate than very engaged ones.

One of the biggest factors candidates consider when accepting a job offer is total compensation, of which employee benefits should be a large part. And since hiring top talent can make or break a small organization’s ability to succeed, winning the recruiting battle is vital.

Small businesses may have lower budgets, but offering benefits is still essential to maintaining a happy team and retaining talent. If your environment is good, people will be happier, and they’ll want to keep working for you. If you ignore benefits, your staff turnover could increase, productivity could drop, and morale may perish.

New to the game? Or want to polish up what you already have in place? Below are some ideas for small business employee benefits to help you create valuable benefits packages.

What are small business employee benefits?

Small business employee benefits include all compensation beyond base salary. Some examples are:

• Health insurance plans
• Workers’ compensation
• Time off for birthdays
• Charity day allowances
• Unlimited paid time off

Employee benefits don’t have to cost you much. But are they a necessity?

Do small businesses have to offer employee benefits?

Small businesses in the US aren’t required to offer all employee benefits. For example, the Affordable Care Act (ACA) requires companies with more than 50 full-time or full-time-equivalent employees to cover health insurance for at least 95% of their employees. Some benefits are mandatory regardless of company headcount, such as:

• Contributions to Social Security and Medicare (FICA taxes)
• Compensation insurance for work-related injuries

Every state has different laws regarding employees and what they should receive. Check the laws for your state carefully to ensure you're compliant.

Affordable employee benefits ideas for small businesses

For a small business, budgets are important. If things are tight, don’t let that stop you from offering benefits to employees though. We’ve rounded up some of the best ways you can polish your small business employee benefits.

Small business employee benefits for physical health

Health plans are expensive, and most small businesses (under 50 employees in the US) don’t have to provide them to employees. However, they can:

Look for healthcare reimbursement plans and accounts

In the US, there are specific rules for healthcare reimbursement accounts (HRAs) these accounts. But small businesses that aren’t mandated to provide employee health insurance benefits can reimburse for healthcare expenses.

This can be an especially attractive small business health benefit for employees who are covered by a partner or parent’s plan. It can also soften the blow of having to pay out-of-pocket for employees who aren’t.

Give a gym reimbursement

Small businesses can offer to reimburse employees up to a certain amount for their gym fees. Helpfully, this is as affordable as you need it to be. When looking at building a benefit plan for your small business, this can be a worthwhile investment.

In fact, studies have found that healthier employees can be more productive.

Consider dental plans

Adults who’ve visited the dentist in the past 12 months are more inclined to report better overall health than those who didn’t, according to Gallup. So, why not incentivize people to achieve good health by offering them dental plans as part of your small business’ employee benefits packages?

You could include it as part of their entitlements automatically. Or do it as an additional option they can have, with perhaps tiered levels.

Small business employee benefits packages for financial health

You must pay employees their salary, that’s a given. But offering benefits to employees isn’t necessarily an obligation. Hence, anything you offer could feel like they’re getting something “extra.”

Benefits for their financial health can help to reduce stress and make them happier and more productive.

Gallup found that a record-high 53% of people believe their finances are getting worse. While it’s inappropriate to require them to discuss finances with you, a small business can provide employee benefits that help employees sort their finances and feel more financially secure.

Consider offering a 401(k)

Gallup also found that 59% of people worry about having enough money to retire on. With this in mind, whether you just give employees the option or match their input, providing a 401(k) is a great asset to include in a small business employee benefits package.

It helps all employees (founders and CEOs, too) prepare for retirement. Plus, in the US, small businesses with under 100 employees who provide a 401(k) can receive a tax benefit.

Provide financial education resources

Empower and educate your employees throughout their journey with you. This, in turn, creates a happier, more confident environment for people to thrive in.

This could be in the form of internal resources, such as giving them free access to budgeting software, for example.

Connect employees with financial advisors

If you decide to provide a 401(k), it’s a good idea to check with the investment firm you pay to administer those accounts. They likely have financial advisors on-hand, and those financial advisors should be willing to consult with employees. Another example would be offering free mortgage advice from a professional broker, to help them with buying a house.

At BambooHR, we also bring our financial advisors in a couple of times a year for ‘lunch and learns’ with employees. Tackling finances can be quite daunting for a lot of people, so it’s great to create a relaxed environment where they can ask questions and gain confidence.

In addition, personal consultations on how to manage finances with experts can help employees in their own lives. This can further incentivise a long-term commitment with your company.

Explore tax-free employer benefits packages

As a small business, there are some employee tax benefits you can offer too. For example, a Flexible Spending Account (FSA) allows your employees to have more power in the way they spend their pay checks. With an FSA, they can withhold money from their pay, which can help cover a variety of expenses, all tax-free.

A Health Savings Account (HSA) works in a similar way—though employees must use their tax-free savings on medical expenses such as prescriptions.

Small business employee benefits that support career progression

Everyone has goals and ambitions. Small businesses can provide opportunities for people to reach their goals by crafting personalized employee benefits.

Of course, it’s difficult to personalize perks to every one of your employees, especially when it comes to looking towards the future. With this in mind, you may want to conduct some market research beforehand to see what employer benefits packages other companies are offering.

In the meantime, here are some effective career benefits you can integrate into your small business’ employee packages.

Be intentional about succession planning

What small businesses can uniquely offer is the ability to work closely with all employees to figure out what they want to achieve. From there, you can create a succession plan and dedicate time to help them achieve their goals internally.

Advertising employee development and succession planning in your employer benefits package is an attractive benefit for those who are looking to work for your small business—and for those who already do.

Provide regular training and development

Even small businesses that aren’t planning to expand can offer employees training and development they won’t be able to get at a larger organization. Often, a small workforce means greater exposure to a variety of tasks, allowing employees to develop a more holistic skillset.

For instance, a small business might hire an inexperienced web developer to create and maintain its website and invest time and training in them personally to see them succeed. While at a larger organization, they might be stuck fixing coding errors.

While that developer may move on eventually, the experiences they gained by single-handedly creating and maintaining a website are employee benefits a small business employee won’t forget.

In this sense, a good company reputation among current, former, and future employees is an incredibly valuable benefit for the business.

Educational assistance programs

Resources may be limited compared to bigger firms, but small companies can offer employee benefits such as an educational assistance program to nurture and support employee growth.

See how much you must spend on this, and budget accordingly. It could be things like covering a percentage of course tuition costs, certificate fees, or specialist course or software subscriptions related to their role. Partnering with local educational establishments might offer you cheaper rates.

Investing in employees is also an investment in your company. A little can go a long way—it may sway workers to stay with you for the long haul, and even recommend their friends to join.

Tie the program to both professional development and business needs for maximum impact. Giving staff these opportunities means they can gain new skills, and your company is strengthened too as a result.

Free employee benefits for small businesses

Affordable employee benefits include those that don’t directly cost you anything. But please note, even if there aren’t upfront costs, you must still consider business revenue. For example, if someone is having a paid day off, you’re paying them as you would on their working day—but nothing is being produced if they’re not working.

• Paid day of service. Some small businesses can’t afford to build large portions of time out of the office into their benefits packages. So, to meet in the middle, giving employees a paid day off once per year for volunteering is also a great way to encourage flexibility. This allows each employee to give back to a cause that’s meaningful to them.
• Team volunteering. Providing services and support together is a great team-building activity. There are plenty of options, from walking dogs to blood drives and even litter picking. Once a year, our team fundraises together and then works as a team with Feed My Starving Children to pack meals to send to hungry children throughout the world. The options are endless!
• Days off for birthdays. Offer people their birthday off as a paid holiday to allow them to celebrate their yearly milestone with a day off work.
• Early finishes on Fridays. Let staff log off work a few hours earlier than the normal working hours at the end of the week, allowing them to start their weekend early.
• Flexible work hours. Give employees the option to choose their own start and finish times, helping them to balance their professional and personal lives. It’ll give them a sense of control, and it won’t cost you anything extra. You can still have limits to this, such as working your own hours as long as employees remain available for meetings within a certain window of time, such as between 10 AM and 2 PM.

Set your team up with employee benefits today

Now that you know about employer benefits packages, you’re ready to apply them to your small business.

Find out how employee benefits would work in your small business. Do you have the budget to do it? Also identify what your employees are interested in with questionnaires—there’s no point offering things they won’t like.