Advising Today’s Worksites

What’s Good For Employees Is Good For Business

How benefits are helping small businesses attract and retain employees

by Ralph Ferraro

Mr. Ferraro is Senior Vice President, Workplace Solutions Product and Underwriting for Lincoln Financial Group. He leads the innovation and evolution of Lincoln’s suite of retirement plan and group benefits products and oversees the underwriting and pricing fulfillment for these two business lines. Visit


The last two years have had an impact on businesses of all sizes, and small businesses are no exception — in fact, according to the 2021 Lincoln Financial Small Business Owner Survey nearly all small business owners (93%) have re-evaluated their overall business strategy and plan to make changes to their business due to COVID-19*.

And for more than 80% of small business owners, employee benefits are a top strategic priority, as these benefits play a critical role in impacting culture and morale, employee wellbeing, and attracting and retaining top talent.

As employees began working from home and feeling the strain of the pandemic on their mental and emotional health, it’s no surprise that employee wellbeing has become top of mind for most employees. More and more, the workforce is turning to their employers for support.

This need for resources has prompted small business owners to reevaluate the benefit packages they offer, with more than half of small business owners surveyed saying COVID-19 was influential in their decision-making process. Offering the right benefits and protections can not only lead to a healthier and more engaged workforce, but will also facilitate attracting and retaining talent as competition for employees is fierce right now. Offering wellness resources, a comprehensive benefits package and retirement plan options can lead to an increase in employee satisfaction and a potential increase in retention, which is a significant concern as record numbers of workers reevaluate what they need from an employer.

Attractive benefits programs can set an employer apart for employees and candidates. And small business owners are recognizing the importance of stepping up the benefits they offer – in fact, more than a quarter (28%) of small business owners surveyed reported offering better benefits to attract and retain talent because of the pandemic. Of those, 30% are adding life insurance, 27% are adding a retirement matching contribution, financial wellness program and/or retirement account, and more than 25% are adding accident, critical illness, hospital indemnity, vision and/or dental insurance.

Offering these benefits, along with education on the protections they provide, gives small business owners a significant opportunity to compete against employers of all sizes to attract and retain employees.

Focus on Employee Wellbeing

Offering a well-rounded benefits package that includes wellness resources also lets employees know that their employer values them both inside and outside of the office. And a key part of focusing on their wellness is helping employees with their financial health – in fact, 62% of employees surveyed by Lincoln Financial say it is more important than ever that employers provide resources and tools to help with their financial health.[1]

Balancing financial priorities is one of the main causes of stress among workers, with an overwhelming 90% of full-time U.S. employees surveyed saying they are concerned about some aspect of financial wellness.[2] Financial stress and the pressures that come with it can make it difficult for workers to balance the needs of today with saving for the future. Over three-quarters (76%) of American workers surveyed have three or more competing priorities when it comes to their savings goals and types of debt.[3]

Offering a well-rounded benefits package that includes wellness resources also lets employees know that their employer values them both inside and outside of the office. And a key part of focusing on their wellness is helping employees with their financial health...

Debt is a huge concern among employees today, but benefits like Long-term Disability can help provide financial peace of mind if someone is out of work due to an illness or injury. Unexpected medical bills are a source of stress for employees, and three out of 10 American adults say they can’t pay an unexpected $400 bill without borrowing money or charging it to their credit card, according to research from the Federal Reserve.[3]

Those who have felt stressed in the past six months say it has affected their performance at work, their mental and physical health and their ability to improve personal finances and set long-term goals. Stress levels also correlate to contribution levels in retirement plans and key outcomes like overall plan assets. Offering financial wellness resources can help — 86% of employees who use financial wellness tools say they see a positive impact as a result.[4]

Good financial health can lead to a healthier workforce and happier employees. When employees improve their financial wellness, they can reduce their stress by better managing everyday expenses and allowing them the confidence to plan ahead for the future.

Educate Employees to Increase Engagement

Offering a robust benefits package to your employees is just one step — it’s equally important to provide tools and resources to help employees understand the offerings.

Deciding which benefits are right for employees and their families can be challenging — it is important to select a well-rounded benefits package that meets the needs of their unique employee population. Small business owners should prioritize education that is simple, relevant and personalized for their employees, as 54% of employees would enroll in more benefits if they understood them.[4] Offering dedicated training and access to expert advice are key elements of benefit education and can help employees make better decisions when it comes to their benefits.

According to a recent study, close to half (48%) of employees say it is easier to do their taxes each year than figure out what benefits to enroll in.[5] Education helps employees learn about new benefits and can help them determine the cost and value of certain benefits and how different benefits work together.

It is important to give employees the confidence to select benefits that protect them both now and in the future. Having the right benefits will allow employees to better manage everyday expenses and reduce stress levels.

Looking Ahead

For more than 50% of small business employees, benefits have an impact on their loyalty to their employer.[5] As small business owners continue to reevaluate their strategic priorities, they must balance what is good for their bottom line and what is good for their employees — and when it comes to offering benefits, doing both can help a business position itself for success, as attracting and retaining top talent is essential in today’s competitive environment.




*All data is from the 2021 Lincoln Financial Small Business Owner Survey unless otherwise specified.
[1] Lincoln Financial, Monthly Consumer Sentiment Tracker, February 2021
[2] Lincoln Financial, Monthly Consumer Sentiment Tracking Study, May 2021
[3] Report on the Economic Well-Being of U.S. Households in 2019, Featuring Supplemental Data from April 2020
[4] Lincoln Financial, Retirement Power Study, 2021
[5] Greenwald Research, GP Benefits Thought Leadership Study, March 2022