By Lauren Dixon – senior editor Talent Economy
As the competition for talent increases and large employers increasingly offer lavish benefits, here are some ways that small businesses can compete on a dime.
As American businesses compete for top-tier talent, large firms increasingly see the value of providing workers with voluntary benefits as a way to attract the best workforce possible.
Nearly 70 percent of employers say that voluntary benefits will be an important part of their employee value proposition in the next three to five years, according to “2018 Emerging Trends: Voluntary Benefits and Services Survey.”
Only 36 percent indicated that voluntary benefits are important today. Among the 336 employers surveyed, 80 percent had more than 1,000 employees. Large firms like these have the funds, expertise and manpower to provide lavish voluntary and standard benefits, but small businesses can also get creative in how they differentiate themselves from the competition.
“I would emphasize not trying to compete with the larger firms in terms of the benefits that larger firms offer,” said Anthony Nyberg, professor and academic director for the Master of Human Resources program at the University of South Carolina Darla Moore School of Business. Large companies tend to have great retirement and health care plans, so smaller firms should capitalize on what they already do well, he said.
Here are four low-cost perks and benefits small companies can use to attract talent:
- Highlight company culture.
Company cultures at small firms are often less bureaucratic than large companies, so employees have a closer relationship with the work they put in and the results of their efforts, Nyberg said. “That can create a greater passion among employees for achieving the goals of the organization,” he said. It’s less likely that a small company can pay the same wages as a large one or offer the same benefits, but small firms could also offer different growth opportunities than large companies. By increasing the responsibility of high-potential employees, they gain experience and could rise in ranks faster than they would at a major corporation. Highlighting these sorts of perks could attract entrepreneurial job candidates that can make a big difference quickly. “That is all about convincing people that they will have great opportunities they would not have at other places,” Nyberg said.
On that note, people can be less narrow in their roles than they would be at a large company. This developmental opportunity is one that hiring managers should communicate up front with job candidates.
- Recognize employees for great work.
People enjoy recognition for their hard work. While this doesn’t necessarily need to be expensive, a small bonus or token of appreciation like a gift card is meaningful. Aside from monetary rewards, applause at a team meeting or being made employee of the month could also go a long way in boosting morale. It’s the symbol and the thought that goes with it.
- Consider parental leave programs.
Offering paid parental leave can feel expensive, and they can certainly put strain on workers who are filling in for new parents that are out of the office. However, employers should consider how not offering parental leave impacts their ability to attract and hire certain talent. To do this, leaders can examine the reasons for turndowns of offers. Especially among young workers who are considering starting families, not having parental leave could be a deterrent. Employers should think through what the tradeoffs are and what they are willing to do to support being a more attractive place to work.
Providing paid parental leave could also cost a lot less than it used to, said Sushma Tripathi, vice president of workforce strategy and compliance at ADP. Employers that provide at least two weeks of paid parental leave to workers earning less than $72,000 per year can receive a tax credit. The amount of the credit depends on the percentage of pay during parental leave, but it could be up to 25 percent of the workers’ earnings, according to NPR.
- Negotiate discounts at local businesses.
If gyms, child care centers or other services are close to the office of a small business, there could be an opportunity for additional perks. If a handful of employees are interested in such services, leadership could directly negotiate a discounted rate for employees, Tripathi said. There would be no cost in doing this, as employees would still be footing the bill.
If unsure of what employees would like in benefits offerings, Tripathi suggested surveying them. This should help in discovering what they find meaningful.
While having benefits is important in a talent strategy, communicating the perks available is of equal importance. “If people don’t know they have these benefits, they’re not going to enroll or access them,” Tripathi said. It’s important for business leaders to cater to their audience of employees by sharing the perks they want in a way that will easily reach them and be easy to sign up for.
Leaders should also educate workers about how the benefits are helpful. Tripathi said she has seen employers create short videos in which employees that use certain benefits share how the offerings help them.
Communication of the perks should appear on the employer’s website or with materials sent to applicants ahead of interviews. Certainly in the interviews, it needs to be talked about. If hiring through a recruiter, it’s also important they know benefits of working for the company; this will help the recruiter sell the role to prospective applicants and employees.
This communication of benefits should all be part of integrated employer branding efforts. Business leaders should consider what sets their company apart from competition and then push that messaging into communications with the talent the company aims to attract.