People now have a different set of expectations in the workplace. Competitive pay is still important, but other compensation benefits have emerged as a critical consideration for prospective employees when considering a position. It makes more sense if you also think about it in this way. What would the differentiation factor be if you had two similar offers with similar pay? SMBs need to understand and invest in the right benefits to hire top talent and maintain lower turnover rates.
Wages worldwide declined on average by 0.9% per year in 2022, with inflation outpacing nominal wage growth – the first decline of the 21st century (International Labour Organisation). This was most prominent in the developed G20 economies, where real wages declined by 2.2% while emerging G20 economies experienced only a slight increase of 0.8%. Benefits have thus become vital in filling the gap between what people are earning and what they’re paying for, no longer just a "nice to have" but also a necessity for financial security.
To corporations, this change is also an opportunity. A solid employee benefits package indicates that the company values the well-being of employees and is, therefore, an effective recruiting tool.
The Recruitment Challenges Facing SMBs
Recruiting as an SMB can be challenging, especially when competing against bigger corporations. Some of these hurdles can look like:
- Limited budgets: Many SMBs can’t match the high salaries larger corporations offer.
- Lower brand visibility: Large companies often have a broader reach and more recognisable brands, making them attractive to job seekers.
- Fewer growth opportunities: Big corporations may offer clearer career progression, something SMBs need to balance with other benefits.
SMBs can offset these barriers and drive recruitment by providing a competitive benefits package. More than anything, employees want a position that supports their well-being, work-life harmony, and long-term growth.
The True Cost of Employee Turnover
Knowing how to retain your employees is just as important as hiring. High turnover comes at a cost—not only in terms of time and expense for recruiting but also for productivity and morale. Employee turnover is about 47% a year in the US, which can lead to an expensive cycle of hiring and training constantly.
Depending on the role, replacing an employee can cost as much as half to twice a person’s annual salary. In SMBs especially, turnover must be minimised by effective employee retention to maintain growth and stability. Providing benefits that enrich your employees’ personal and professional lives can increase job satisfaction and retention, making employees less likely to leave.
Why Are Employee Benefits Advantageous to Provide?
- Attracting Top Talent: Benefits help you compete with more prominent companies when salary alone might not.
- Increasing Employee Morale: Employees who feel supported by health and wellness benefits are more motivated and engaged.
- Loyalty: Workers want to remain with a company that shows that it is looking out for them.
- Improve Brand Value: A well-rounded benefits package can enhance a company’s image and make future recruitment efforts more manageable.
- Reducing Operating Expenses: Some benefits, including health insurance contributions, could earn tax benefits, so it's a good investment.
Building a Benefits Package
You don’t need a supersized budget to create an attractive benefits package. You can mix it up and provide a range of different perks.
- Basics: Health insurance, retirement accounts, life insurance.
- Flexibility and work-life balance: Employees today are looking for more flexible work, whether that be remote working, flexible hours, or more PTO. Workers want to control their time and life. Giving people the option to work from home is extremely important; it’s almost an expectation in the current day and age. Providing flexibility increases job satisfaction and is essential for retention.
- Promote development: Tuition reimbursement, learning portals or mentorships — it is evidence that your company cares about employees’ futures. It’s a great way to attract and retain employees who don’t just want a job but a career.
Why Employee Benefits Are a Smart Investment
A comprehensive benefits package is essential for SMBs competing in today’s job market. By supporting employees through health, wellness, flexibility, and growth opportunities, SMBs can set themselves apart in the recruitment process and build a committed, productive team.
Investing in employee benefits improves recruitment and retention rates and encompasses a positive company culture that keeps employees motivated, satisfied, and loyal. In a world where employees increasingly value their employers' holistic support, offering a competitive benefits package could be the key to your business’s long-term success.
Ready to Attract and Retain Top Talent?
NES Advantage understands the critical role that employee benefits play in building a committed and motivated team. Whether you’re an SMB looking to develop a competitive benefits package or seeking top talent to drive your business forward, our employer value proposition services can help. Get in touch with us today to learn how NES Advantage can support your recruitment and retention goals.
