Does your small business need employee benefits?
No matter where small businesses operate around the world, they will oftentimes have many of the same types of issues to worry about. Sure, every small business will worry about the bottom line and remaining profitable, but there are a number of different aspects of doing business that seem to remain constant across different industries and localities. Items like marketing, advertising, and customer service remain key to the success of just about any company, but businesses also cannot lose sight of the needs of their employees.
Chief among the concerns of workers around the world is, of course, their compensation. However, outside of pay, people want to make sure that their health, and that of their families, is well looked after. Depending on where a business is located, though, what it can take to accomplish this goal can vary. Here, Pacific Prime attempts to answer a question that many small business owners ask themselves every day: “Do I need to provide employee benefits?” Read on to find out more.
A somewhat obvious place to start when deciding if employee benefits are needed for your small business is acknowledging whether your employees already have access to free or highly affordable healthcare. In many countries, employers will feel far less pressure to provide benefits for their staff if the local public healthcare system is already going to sufficiently address their medical needs.
According to information presented on Wikipedia, 121 out of 201 total countries worldwide currently have some form of universal healthcare system in place to address the medical needs of the vast majority of their populations. In these countries, employers may be less likely to provide group health insurance for their employees, but that also depends on the realities of how their so-called universal healthcare systems work.
To be sure, not all universal healthcare systems are created equal, and some actually end up limiting how much say businesses have when it comes to choosing whether or not to provide health insurance for workers.
In actuality, when some countries say that they have instituted ‘universal healthcare’, what they really mean is that they have made health insurance mandatory. There are many examples of this type of system out there, such as in Australia, Japan, the Netherlands, Switzerland, Singapore, Israel, portions of the United States and the United Arab Emirates, and many more!
The governments in these spots have simply required that every person in the country – or at least legal residents or taxpayers – must possess health insurance, or else they will be in violation of the law, and be subject to a penalty (usually in the form of a fine). There is still plenty of nuance for differences in these systems, as well, as some countries will provide their own nationalized insurance that people can purchase, while others will depend on the private health insurance market to create products that adhere with the laws that define the healthcare system.
For an example of the latter, one need look no further than the United Arab Emirate of Dubai. In 2014, a national law came into force that would see everyone in the country insured by 2017. In order to accomplish this, the Dubai Health Authority and Government of Dubai mandated that all employers in the Emirate must provide health insurance for their staff. There was no public health insurance option created for this system, and people met governmental requirements via Dubai’s local private health insurance companies.
One might think that such a system might put too much power in the hands of insurance providers, but countries that make health insurance mandatory generally have rules in place that insurers must adhere to as well. In Dubai’s case, there was an absolute minimum level of insurance benefits that all private health insurance plans must provide in order to remain compliant with government regulations. In Dubai this is known as an Essential Benefits Plan, and includes provisions like the inclusion of pre-existing condition coverage, maternity benefits, and more.
In situations like this, the question of whether or not your small business should provide employee benefits is, “Yes.” However, this is not because it is the right thing to do, so much as it is because it’s what local laws dictate.
Reasons small businesses should provide employee benefits
The reasons that decision makers at your company would think employee benefits are not necessary are few, yet they are powerful. Sure, one reason could be that they already have access to highly-affordable, excellent quality healthcare, but the primary reason not to secure employee benefits is to save money. For those that don’t know, group health insurance can be quite expensive, and can represent a burdensome cost that can limit the funds available to a small business.
On the other hand, there are a number of different reasons to seriously consider providing employee benefits to your staff, even if they do already have access to free universal healthcare:
- Poor public healthcare sector – Sometimes, despite government assurances to the contrary, a universal healthcare system isn’t all that it’s cracked up to be. Common features of public healthcare systems include long wait times, insufficient face time with medical practitioners, a comparatively poor quality of care versus private healthcare providers, and more. To ensure that staff have access to the best hospitals and doctors, they oftentimes will need benefits that can allow them to seek care in the best medical facilities.
- Attract top talent – Sure, you could not offer employee benefits, but what are job applicants going to do when they compare your job offer to one from a competitor that is providing them benefits? They’re going to go with the competitor.
It’s not hard to understand that it takes the best combination of compensation and benefits to bring the best talent onboard. Top employee benefits is therefore essential in getting top employees.
- Lower turnover – Once a valuable team member is on board, there’s nothing stopping them from jumping ship after they’ve put in a year or two of service. Nothing, that is, except for the phenomenal benefits you may or may not have provided them. Many companies focus on reducing turnover in order to save money on hiring and training, not to mention brain drain. Employee benefits give valued employees a good reason to stay.
- Beat the competition – In general, small businesses like to stand out among their competitors in just about all things. One way for your company to make a splash in its business sector is to make a lot of noise about the innovative and groundbreaking benefits it offers. Of course, you have to have the plan in place to backup such claims if you are going to make them.
- Better health outcomes for increased productivity – Finally, there is the simple fact that giving people access to the best healthcare will result in the best health outcomes. Whether your company simply allows staff to go to the best local hospital, or it splurges on a company wellness plan that includes preventive care, mental health cover, nutrition coaching, gym memberships, and more, a healthier team is more likely to show up to the office on time, and ready to put in a full day’s work.
Are employee benefits right for your small business?
If, after looking at the above article, you think the answer to this question is, “Yes”, it might be time to seek out some advice on how to secure the most ideal employee benefits for your small business. After all, there are hundreds-if-not-thousands of different insurance providers out there; each bringing their own variety of employee benefits solutions to the table. How can you know which plan, or even which insurance company, will be the best fit?
Fortunately for your company, you can take advantage of Pacific Prime’s track record of customer service excellence and deep insurance industry knowledge. Our insurance advisors are ready to examine your situation and work with top global insurers to create a bespoke employee benefits solution for your company and staff.
Contact us today to get started!