Want advice on attracting top-notch employees without risking your business?
Every small business wants to hire the best of the best. But when it comes to compensation…how can you compete with larger companies? Well, one place you can outshine the big dogs is through benefits.
If you don’t offer competitive benefits packages, you’ll fail to attract and keep good employees.
But beware, administering employee benefits isn’t as simple as picking a few cool perks. There are strict legal guidelines you must follow. Fail to do so and your business could be hit with penalties or even lawsuits.
In this guide, you’ll learn how to build rock-star benefits packages that will put your business over the top with candidates.
Ready to learn?
You’ll discover:
- Why You Should Offer Competitive Benefits Packages
- Important Legal Compliance Information for Benefits
- How to Offer Competitive Benefits While Saving Money
- Ways to Differentiate Your Business from Bigger Companies
Why Offer Competitive Benefits Packages?
Imagine if you could outshine the competition when hiring new employees.
Well, you can with competitive benefits packages.
According to SHRM’s 2024 survey, 84% of employers rank health care as the most important benefit they offer. That’s right. According to industry leaders, healthcare benefits are the single most crucial benefit employers can offer.
Your business needs to offer competitive group health insurance plans if you want to attract quality employees.
Not only do benefits help you recruit great talent, they also play a huge role in retention. Keep your employees happy with the right perks and they won’t go looking elsewhere.
When you’re a small business, high employee turnover is the last thing you need.
Legal Compliance Benefits Information You Can’t Afford to Ignore
If you’ve never had to provide benefits before, this will all be new information to you.
And that’s okay!
There are a few required benefits that all employers must provide by law. If you don’t provide these benefits, you could be forced to pay steep penalties.
Both the federal government and your state government have laws dictating what benefits you must provide.
Here are the benefits every small business is required to offer:
- Social Security & Medicare (aka FICA)
- Workers’ Compensation Insurance
- Unemployment Insurance
- Family Medical Leave Act (FMLA)
That’s just the tip of the iceberg. The Affordable Care Act requires certain businesses to provide health insurance, as do many individual states.
Businesses with 50 or more full-time equivalents are required to offer affordable, minimum essential coverage or face fines.
Not only that, but several states have already enacted paid leave laws for 2025. In 2025 alone, there are 5 new state paid leave requirements and over a dozen states with new pay transparency laws going into effect. Staying on top of new legislation can be difficult, but it’s important to make sure you’re compliant.
Once again, the best way to stay on top of benefits compliance is to frequently review your benefits package for compliance.
And when you’re not sure? Consult a licensed professional.
Build A Competitive Benefits Package That Won’t Break the Bank
Okay, so offering a competitive benefits package is important.
But what if you have limited funds?
The good news is that you don’t need a massive budget to provide a benefits package that will wow potential new hires.
The Bureau of Labor Statistics reports that benefits make up 29.4% of the total compensation cost of workers in private industry. While that may sound like a lot, there are plenty of ways to trim the fat.
Here are the basics every business should cover:
- Healthcare (Providing a PPO or HDHP with HSA option)
- Retirement Plan (401k or Simple IRA)
- Paid Time Off
- Dental & Vision
Once you have the basics covered, you can start enhancing your benefits package with some of the cool perks mentioned below.
A trick that many small businesses don’t know about?
Health Savings Accounts. When you offer an HDHP with HSA option, you drastically reduce your healthcare premiums. And employees still get a tax-free savings account they can use for medical expenses.
Another inexpensive way to boost your benefits package is through voluntary benefits.
Voluntary benefits are extra perks that your employer offers but the employee pays for. Think things like pet insurance, life insurance, and identity theft protection. They’re a great way to give your employees more without costing your business much to offer.
Strategies For Standing Out From The Competition
While you may not be able to compete with larger companies’ salary offers, you can compete with benefits and company culture.
Let’s take a look at a few tactics.
Offering Flexibility
One of the best things about running a small business is you can offer flexible scheduling and remote work opportunities. Things that larger companies struggle to do.
Flexible work arrangements shouldn’t cost you anything and are highly sought after by employees.
Focus on Professional Development
Show your employees that you want them to grow with your company by offering to pay for certifications, training programs, and even tuition reimbursement.
Ambitious employees will trade a higher salary somewhere else to work for a company that invests in their professional growth.
Personalize Your Benefits
The days of providing benefits to “check a box” are gone.
The SHRM 2024 Employee Benefits Survey keeps track of over 216 distinct benefits that employers offer. That’s 41 more benefits than were tracked just 2 years ago!
Employers are starting to learn that employees love benefits that are catered toward their specific needs. Survey your employees and find out what benefits they really value. Then craft your benefits package around those perks.
Continue Offering Innovative Benefits, While Remaining Compliant
Just because you offer a new benefit, doesn’t mean you’re done with it. Make sure you understand the tax implications, reporting requirements and any state-specific guidelines for each new benefit you offer.
Benefits will constantly change as you hire more employees and find out what your current employees value. That doesn’t mean you can forget about legal compliance when adding new perks.
Wrap Up
Small businesses NEED to offer benefits in order to recruit and retain employees. Simple as that.
Here’s your cheat sheet:
- Make sure you know which benefits you’re required to provide and stay on top of compliance.
- Get the basics covered with Health Insurance, Retirement Accounts, and PTO
- Keep costs low by offering HSAs and Voluntary Benefits
- Outshine the competition with flexible work options and perks that your employees value.
- Stay compliant when adding new benefits.
Benefits are a crucial part of any business’s compensation package. Use the information above to ensure your competitive benefits package is one that exceeds your employees’ expectations.
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