Advising Today’s Worksite

Serving Up New Benefits Solutions

How small businesses can overcome cost, confusion and time constraints

by Jimmy Reid

Mr. Reid is executive vice president of Lincoln Financial Group and president of Workplace Solutions. Visit www.LincolnFinancial.com.

Small business owners know how much top talent can impact their business’s bottom line. The energy and resources spent on employees are direct investments in their business. As small business owners consider how best to support their employees, providing a competitive benefits and retirement package is a way that they can attract top talent and promote employee well-being, while encouraging loyalty and employee retention.

New research shows that small business employees expect workplace benefits as a fundamental piece of their compensation package — when these benefits aren’t offered, small business employees aren’t interested.[1] At the same time, the pressures of running a business and economic headwinds can make it difficult for small business owners to offer a comprehensive lineup of employee and retirement benefits. For instance, in the past several years, 93% of small business owners surveyed have re-evaluated or made changes to the way they do business,[2] and, as business owners reconsider their business strategy, they can make changes that shift their investment away from employer benefits.

As we work with small businesses, we must remind employers of the value these benefits bring to employees and their businesses. More importantly, we must give them the path to offer robust benefits — using streamlined and affordable solutions that overcome their challenges while providing employees with packages that fit their needs.

The Challenge: Cost, Confusion And A One-Man Band

It’s important that we target small business owners’ top challenges when creating viable solutions for them. Small business owners face multiple barriers in offering comprehensive benefits, including financial concerns, working through a confusing benefits landscape and limited time to invest in human resources:

  • Costs weigh heavily on these employers. Small business owners are more likely to cite finances as their biggest source of stress than those who do not own a business.[3] Additionally, while benefits can be instrumental in attracting great talent, more than a third of small business owners surveyed said that, while they see benefits as a high priority or essential, they don’t offer them to their employees because they can’t afford it.[4]
  • Business owners have trouble navigating the benefits landscape and discerning which products, from which carriers are right for their employees. Half of small business owners surveyed have concerns about weighing the costs and benefits of plans, while 40% are overwhelmed by the variety and number of benefits on the market.[5]
  • As they grapple with costs and this complexity, small businesses also have limited human resources bandwidth. Benefits decisions can fall to an HR team of one or a business owner who is juggling other responsibilities. Many business owners rely on their broker partners, who are also balancing their own books of business. These decision-makers value navigating as few carriers as possible, receiving timely quotes, and saving time by getting the answers they need, when they need them.

It’s also important to remind small business owners of the value that these benefits bring to their employees and what the current workforce is seeking. Employees need support across all aspects of their lives, and many job seekers now see benefits as non-negotiables. Two-thirds of small business employees surveyed in a recent survey said employer-offered retirement savings plans, dental and vision insurance were important or “must haves.” About four in 10 of the workers said they wouldn’t consider working for an employer who doesn’t offer a retirement plan, dental or vision insurance.[6]

The needs of today’s workforce is also shifting. Millennials, who now make up the largest generation of U.S. workers, and Gen Z workers are more likely than their Gen X and Boomer counterparts to see financial wellbeing, emergency savings programs and Health Savings Accounts as very important or essential offers from an employer.[7] A total of 92% of Gen Z and 88% of Millennials surveyed also were interested in receiving financial aid from their employers.[8] On the other hand, not providing the right financial support also can hinder employees’ stress and a business’s strategy — 35% of employees say that they are less productive because of their financial concerns.[9]

Millennials, who now make up the largest generation of U.S. workers, and Gen Z workers are more likely than their Gen X and Boomer counterparts to see financial wellbeing, emergency savings programs and Health Savings Accounts as very important or essential offers from an employer...

Additionally, today’s workforce is more likely to change employers. More than 20% of Millennials and 28% of Gen Z employees of small businesses are actively looking for a new job.[10] But it’s important to note that benefits can help retain employees — in a survey, 81% of small business employees said benefits impacted their loyalty to their employer.[11] Employee retention is especially important for small businesses which can find it difficult to replace key individuals. Losing top employees can also have a real impact on a small business’s bottom line, from lost productivity and costs from recruiting, hiring and onboarding.

How We Can Help

Robust coverage through retirement and insurance benefits can help small businesses distinguish themselves from competitors, earn the loyalty of their employees and attract new members to the team. It can also improve employees’ overall well-being, allowing them to be more productive while also feeling appreciated and valued by their employer.

Carriers can be a part of the solution to bring more comprehensive benefits packages to small business employees. They can partner with small business owners and brokers by addressing their pain points and continuing to share information on the value of the products and services to employees. Below are ways carriers can help:

  • Streamlined customer experience: Invest in the customer experience to create one that is streamlined, digitally optimized — from quote to enrollment to claim — and that integrates with their brokers’ and employers’ current systems. In particular, focus on investing in tools that automate manual tasks and add ease to administration, such as insurance technology solutions.
  • Digital tools: Make managing benefits easy with innovative digital tools and portals that are specific to employers and employees. When surveyed, 63% of small business employees said they preferred self-service resources, such as digital tools, or a mix of self-service and consultative services to get information or education about their employee benefits.[12]
  • Education where customers need it most: Help provide guidance and support to business owners as they navigate new regulations, including the rapidly changing leave landscape, so that they can stay in compliance. Additionally, provide tools to help educate employees so that they take advantage of the products and resources offered to them. Research shows that 53% of small business employees surveyed would enroll in more benefits at work if they understood them better.[13] And when employees envisioned their ideal benefits education program, they’re interested in a variety of touchpoints and tools, including expert consultations, personalized advice, time for training and technology-based solutions.[14]
  • Affordable, packaged solutions: Offer affordable, bundled solutions that bring together a comprehensive suite of benefits tailored to the needs of individual employers and their employees.
  • Robust product suite: Provide a holistic approach to benefits through a full product suite. In addition to medical insurance, include dental, vision, retirement plan services and supplemental health benefits — like accident, critical illness and hospital indemnity insurance — that are of interest among workers as they can help them save more confidently and help cover unexpected financial costs.

Through these approaches, carriers can improve the employer and employee experience, while helping small businesses invest in benefits that will serve their workforces, their business strategy and their bottom lines.

 

 

 

1 Lincoln Financial, Consumer Sentiment Tracker, 1Q 2023 – 1Q 2024
2 Lincoln Financial, Small Business Owner Survey, November 2021
3 Lincoln Financial, Consumer Sentiment Tracker, 2023
4 Lincoln Financial, Small Business Owner Survey, November 2021
5 Lincoln Financial, Small Business Owner Survey, November 2021
6 Lincoln Financial, Consumer Sentiment Tracker, 1Q 2023 – 1Q 2024
7 Lincoln Financial, Consumer Sentiment Tracker, 1Q 2023 – 1Q 2024
8 Lincoln Financial, Wellness@Work: Retirement Plan Services, 2023
9 MetLife’s 2024 U.S. Employee Benefit Trends Study
10 Lincoln Financial, Consumer Sentiment Tracker, 1Q 2023 – 1Q 2024
11 Lincoln Financial, Wellness@Work: Group Benefits, 2022
12 Lincoln Financial, Wellness@Work: Group Protection 2022
13 Lincoln Financial, Wellness@Work: Group Protection 2022
14 Lincoln Financial, Wellness@Work: Group Protection 2022

 

Leave a Reply

Your email address will not be published. Required fields are marked *