Maintaining a full staff of skilled employees doesn’t come easy, and benefit offerings play a huge role in racking up costs. In fact, health insurance costs an average of 9% of an employee’s yearly salary, and when all benefits outside of compensation are taken into account, they total over 30% of salary. These can be debilitating numbers, but it is possible to reduce the cost of employee benefits while actually increasing benefit offerings. The secret is to connect your employees to the much larger employee base of a PEO to access attractive group options.
With the rising cost of health benefits occupying a permanent place in today’s news cycle, it’s no surprise this is one of the top areas of concern for business leaders. Likewise, 66% of adults cite the cost of health insurance as a stressor, meaning your employees are likely concerned. Smaller businesses feel the brunt of this the most, since the smaller the organization the more expensive health benefits are to provide. Insurance companies charge more in premiums to lower-count employee bases because they are trying to offset their risk in dealing with a limited group. For this reason, an insurance broker cannot provide a small company with the same insurance rates that a Fortune 500 company would enjoy.
Partnering with a PEO changes things. Your workforce joins the employee base of the PEO, instantly making your staff part of a giant group. By being part of this larger group, your employees have access to better offerings. That can include health insurance, life insurance, short and long-term disability, vision insurance, and more. While something like vision insurance doesn’t seem like a big deal on paper, it’s a benefit that can mean a lot to a large family needing new glasses regularly. Group insurance rates make a drastic difference to both employees and your bottom line.
Investment, Retirement, and Fringe Benefits
Many small and medium-sized businesses have trouble providing full benefit packages that extend beyond health insurance. With a PEO, so much more is possible like tax savings plans, retirement plans, flexible spending plans, and other attractive options. Forbes sees a 401(k) as a very valuable offering for employers to extend to their workforce. That and more can be possible once a PEO is plugged into your company.
Of course, there are even more benefit perks available when your employee base is part of a large group. Imagine employee credit unions, employee assistance programs, workers’ comp insurance, appropriate overtime pay, and more. These benefits aren’t available to employees in many smaller organizations, but a PEO like Synergy can make them easy and affordable to offer and administer appropriately.
Outside of the actual cost of benefits, a large expenditure for businesses is in managing it all. The more robust your offerings, the more attention and resources it takes to keep them straight. After all, who manages (or would manage) your healthcare enrollment? It likely takes time away from your or another manager’s main responsibilities or requires salary expenditure on an entire HR staff.
Today’s healthcare landscape is a confusing one full of red tape and shifting laws; managing it alone is a big job that requires dedicated attention. Partnering with a PEO eliminates this worry completely. With Synergy especially, an HR Specialist is placed directly in your office so employees know who to turn to with complicated questions or concerns. Risk, along with the burdensome responsibility of compliance, is taken off your company’s plate and placed in the hands of an expert.
The Positive Effects of Robust Benefits
Here’s the kicker: reducing the cost of employee benefits isn’t the only positive effect when a PEO helps increase offerings. When employees are offered better packages, they are happier. That improves engagement, and ultimately, the retention of the workers your business relies upon. Health insurance is a huge perk for today’s professionals and offering other miscellaneous benefits can make a big difference as well. By the same token, recruiting is boosted and hiring improves when more attractive offers on are on the table.
How to Reduce the Cost of Employee Benefits
There’s a reason 180,000 businesses partner with PEOs: they work. Given how much competition there is for skilled talent today, small and medium-sized business find that reducing costs while increasing benefits provides a much-needed edge in a crowded environment. When you streamline your HR benefits and bring in an expert PEO, great things happen for you and for your employees.