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[Handbook] — What to Look for in Your First Small Business Benefits Plan

By: Benefits by Design | Tuesday September 1, 2020

Updated : Wednesday June 22, 2022

Deciding to offer an employee benefits plan for the first time is a big decision for any business. But for small business owners, this is particularly true.

Benefits by Design (BBD) Inc. began as a small business more than twenty years ago. We know the struggles many small businesses face. High overhead costs, thin margins, and little cash flow (at least at first) can make providing employee benefits seem almost out of reach.

However, employers should know benefits can be affordable for a small business, and they’re quickly becoming essential to remain competitive.

Download the Small Business Benefits Handbook

Why Should A Small Business Offer Employee Benefits?

Your first group benefits plan doesn’t need to include everything. Employees will still feel valued and cared for even if you start small.

A small business will benefit greatly from offering a competitive benefits plan in four key ways:

#1. Protect Your Employees

The benefits you provide through your group insurance plan can help to keep employees happy, healthy, and financially secure. Employers should consider their benefits philosophy (the “why” behind the plan) and seek employee feedback before making any decisions.

#2. Boost Employee Engagement, Retention, and Job Satisfaction

Offering a benefits plan shows your employees that you value their health and works to build trust and loyalty between you and your employees.

Individuals who are covered under an employer’s benefit plan report higher engagement and satisfaction in their roles and are more engaged in their work.

#3. Attract and Retain Top Talent

Next to salary, employee benefits are the most important tool for attracting and retaining employees. Prospective employees are looking at an employer’s benefits plan when job-hunting, so if your goal is to get the right people in the right roles, a group insurance plan can help — regardless of company size.

Download the Benefits of Employee Benefits Infographic (PDF: 80 KB)

#4. Remain Competitive in the Industry

The right employee benefits plan can position you in your industry as an employer of choice. Employees are carefully considering their total compensation package when applying for jobs. You may be losing great candidates to your competitors who do have benefits offerings.

Finding a Group Insurance Advisor

A group insurance Advisor is a licensed expert and advocate for you and your organization’s benefits plan. They’re a great resource to have on your side for any benefits plan, but particularly if this your first foray into group benefits.

An Advisor will look after your interests, help you navigate the group insurance industry, answer questions, and can assist you in finding the products and services that best fit your benefits philosophy. Choosing an insurance Advisor is an exercise in establishing a “best fit” and is something you should consider carefully.

Consider Cost-Contained Benefit Solutions

When it comes to small business benefits, cost is often the number one factor in determining whether to offer benefits or not. Our small business clients tell us that cost-containment is one of the most important elements of a group benefits plan for them.

That’s why spending accounts like the Health Care Spending Account (HCSA) have a strong and growing uptake among small businesses. With a HCSA, employees receive a set amount of money for the year to use on eligible health and dental expenses. Employers choose the amount to offer employees, which allows them to accurately predict their overall cost of providing benefits. This is different from traditional, fully-insured plans, which can have varying costs or large annual increases.

What Employee Benefits do Small Businesses Take?

We began as a small business ourselves, so we know that small businesses do things a little bit differently. Furthermore, their cost-conscious attitudes and smaller employee pools means that, when it comes to providing benefits, many employers begin to prioritize the coverage they’re offering.

With that in mind, we took a look at our own block to see what benefits our small business clients are taking most often when they first set up their benefits plan. We’ve created a downloadable report with our findings to help other small business employers prioritize their benefits coverage.

This data represents nearly 1,000 Canadian small business clients (with 50 or less employees).

Download The Small Business Handbook for Designing Your First Group Benefits Plan