Small business owners are required to provide their employees with certain basic benefits (mandatory benefits) but there are other benefits (non-mandatory benefits or voluntary benefits) that small business owners can offer their employees as well. These mandatory and non-mandatory benefits are standard across industries. “Standard benefits consist of health, dental, vision and retirement plans.” See, Small Business Employee Benefits | ADP.
One example of mandatory benefits is Social Security benefits. Here is a list of other mandatory benefits:
Mandatory Benefits
- Social Security
- Medicare
- Unemployment Insurance
- Workers Compensation
- Disability insurance (some states)
Small business owners usually are required to offer mandatory benefits to their employees if they have at least 3 employees. But as noted, it is more than the just the mandatory benefits. There are other standard voluntary benefits that are non-mandatory, but that ought to be part of a comprehensive benefits package. “In order to appeal to a generational workforce, however, employers may need to also offer voluntary benefits that can be customized to meet employee needs at different life stages.” See, Small Business Employee Benefits | ADP
Small business owners who offer their employees a well-balanced benefits package will often be rewarded with loyal employees who are committed to the company, who are productive, and who contribute to the company’s bottom line. Why? Because having great benefits from one’s job helps workers to maintain the right work/life balance, puts workers in the right frame of mind, and encourages workers to do their best for their bosses and companies for whom they work.
Workers today are more demanding than ever. They want that sense of balance. They crave that sense of “wellness.” These employees are likely to stay with companies that help them achieve a sense of balance and feel a sense of wellness. These employees do not want to risk giving up this equilibrium by charging off to another company that may not offer them the same benefits. So, the retention rate for employers who offer their employees a nice benefit package that consists of the right balance of mandatory and non-mandatory benefits, is predictably high.
Here is a list of non-mandatory benefits that the typical employee would appreciate:
Non-Mandatory (voluntary) Benefits
- paid vacation time
- retirement savings plans
- education assistance
- wellness programs
- childcare assistance
- Pet insurance
- Financial planning
Which employee would say “no” to a boss that offers them these types of benefits that include paid vacation time, financial planning and childcare assistance if they have children? Which employees would not want to be paid vacation time off? It is hard to even imagine that there are employers who send their workers off on vacation without pay, or who would be oblivious about the need for childcare assistance, or who would be unwilling to assist an employee with education expenses.
It is true that benefits packages can be expensive. According to a recent report from the Bureau of Labor Statistics “workers averaged $40.23 per hour worked. Wage and salary costs averaged $28.37 and accounted for 70.5 percent of employer costs, while benefit costs were $11.86 and accounted for 29.5 percent.” See, Employer Costs for Employee Compensation – December 2022 (bls.gov). Not all small business owners can afford to top off wages and salary costs, as well as mandatory benefits costs, with an additional cost for non-mandatory benefits. But the idea is not to offer ALL the benefits possible (if this is not in the budget), only to aim for a comprehensive package that is within your budget, and that offers the employees a balanced benefit package—that works for them and their lifestyle. In the end, this will come back to be a huge benefit to the company because as noted, happy employees stay with their employers for the long haul.
