A good employee benefit plan can help you grow your small business
Even the largest corporations in the world had to start somewhere. One day, way back when, they too were a small business. They worked hard, struggled past roadblocks, adapted their offerings and persevered. They grew. For most small business owners, growth is an important goal.
The Goal: Growth
When it comes to business, there are a number of different ways a company can grow. Each of the elements are intertwined and when one area grows, another is almost certainly affected. If you are like many small business owners, you may attempt to grow by:
- Increasing your capacity but adding people – There are only so many hours in a day. As a result, it’s almost impossible to grow your business without expanding your workforce. In many ways, adding employees is one of the first pieces to the puzzle.
- Ramping up production – Increasing your output is the foundation to growth. Increasing production or the scope of your work is often closely tied with increasing your employee base.
- Increasing revenues – If you’re doing it right, ramping up production will lead to an increase in revenues. The extra employees you have hired will help ramp up production, which will then increase revenues – but may bring with it increasing financial complexity.
- Increasing profits – Hopefully, the increases in production and revenues will have come with economies of scales which will then contribute to an increase in profits.
- Developing a company culture – Alongside financial and people growth comes the growth of a company culture. This usually refers to the shared attitudes and behaviours of your employees and your business outside of actual business transactions. A good company culture can make your business a fun, rewarding and desirable place to work, creating a spiral of success.
Growth and Employee Benefits – How do they fit together?
There are certainly many ways to grow a business but here we’re going to focus on employee benefits as a tool for growth. Employee benefits can have a positive impact on the growth of your company, both directly and indirectly. A good employee benefit plan can support the growth of your business by helping you:
- Attract and Retain Employees
A good employee benefit plan can make or break a potential candidate’s decision on whether to accept a job offer. These days, even small businesses offer employee benefits in order to compete for the best workers and to support the owner’s own needs. If your goal is to grow your business, you’re going to need employees. In order to increase productivity, you’re going to need good employees. An employee benefit plan can help you get those employees.
Once you’ve attracted good employees, you’ll need to retain them. Maybe when you were just starting off, your employees could accept that you didn’t offer employee health benefits. But now as you grow your business, your employees are going to expect them. They’ll look around and see that a lot of businesses offer employee benefits. If your company doesn’t compete by offering benefits, your employees may look at other job options and choose to work elsewhere. Employee benefits are an important tool to help retain employees. Retention is an important financial savings because it costs a lot of money to recruit and train new employees. This is money that could instead be spent growing your business.
- Increase Productivity
Happy and supported employees are more productive. Sponsoring an employee benefit plan can help show employees that you care. It can provide the resources to address and treat health issues and prevent issues from escalating. As a result, your small business will have higher employee satisfaction which usually translates into increased productivity. Productivity increases will help you grow your business.
- Improve tax situation
Employee benefits are a tax-deductible business expense. You likely have a business strategy that strives for revenue increases and tax efficiencies; your employee benefits strategy should be part of the overall business strategy. As a tax-deductible business expense that has other important implications, employee benefits can help improve your business tax situation to free up capital for growth.
- Foster positive company culture
A positive company culture can help with recruitment and retention. Having an employee benefit plan that aligns with the company culture can be a big boost. For example, a young workforce may value wellness benefits, while an older workforce may look for disability coverage. Offering the right employee benefits plan can help you establish a positive company culture, which can then make your company a desirable place to work. This will help you grow your business.
Employee Benefits Defined
Now that you understand how a good employee benefit plan can help you grow your business, you may have questions about employee benefits themselves. What exactly are they and how do you know which benefits to provide? Let’s start by getting familiar with the basics of employee benefits.
Employee health benefits are designed to support the physical and mental health of employees. They also provide coverage for life’s unexpected challenges. For many people, fill the gap between public health care services and paying out of pocket for much-needed health and dental expenses.
Health and Dental
Health and dental employee benefits are often the most familiar of employee benefits, and the most sought after. A cornerstone to health and dental benefits is prescription drug coverage. The Canada Health Act stipulates that medications administered within a hospital setting are provided at no cost. Coverage for prescription drugs required outside of a hospital setting varies by province, and typically requires individuals without private coverage to pay some portion of the cost. With employee benefits coverage, an individual’s out of pocket expenses are reduced or eliminated.
Another well-known employee benefit in the health and dental category is coverage for paramedical expenses. Paramedical expenses refer to services provided by healthcare providers such as physiotherapists, registered massage therapists, speech therapists, dieticians and many others.
Dental coverage also falls into this category. Typically, employee benefits provide some level of coverage for diagnostics, preventative dental services (such as teeth cleaning) and restorative services (such as fillings or crowns). The majority of Canadians do not have federal or provincial coverage for these services.
Vision is the last main part of health and dental benefits in most employee benefit plans. Vision benefits typically include coverage for eye examinations and corrective lenses. The amount of coverage can vary and some plans choose not to provide any vision coverage as part of their health and dental plan.
Disability benefits provide covered individuals with a portion of their income if they are injured or disabled. The employee benefit plan can cover either short- or long-term disability or both. For employees, this is valuable coverage. Without coverage, a short or long term disability can have devastating financial implications on an individual’s future.
Life and Critical Illness
Life and critical illness coverage provide a lump sum payment to a designated beneficiary upon the death of a covered individual or when they are diagnosed with a critical illness. This coverage provides peace of mind that a person’s loved ones will have financial support while going through a very difficult time.
Wellness benefits are a proactive approach to improving the mental and physical health of covered employees. One common element is an Employee and Family Assistance Program (EFAP). An EFAP usually provides access to counselling and online resources to support mental health. Another option is to include a wellness spending account in the employee benefit plan. This allows employees to be reimbursed for eligible wellness expenses like fitness classes and running shoes.
Putting it all together
By now it’s clear that a good employee benefit plan can help you grow your business, especially a good employee benefits plan. It’s easy to find a cookie-cutter employee benefit plan offered at rates that seem too good to be true (because they probably are!). What’s more difficult is finding a provider willing to work with you to design a plan that supports your company. A plan that is designed for your specific workforce and that has a long-term, sustainable approach. Taking the time to interview different providers before selecting the right one is crucial if you truly want your employee benefit plan to support the growth of your small business.
Good Advice is Key
Are you interested in sponsoring an employee benefit plan that can help you grow your small business? Review your options with one of our licensed advisors on the phone, or contact us for a comparison quote.