The impact of the pandemic over the last two years has prompted businesses of all sizes to reevaluate their benefit packages—and small businesses are no exception.
In fact, nearly all small business owners surveyed (93%) have reevaluated their strategy and plan to make changes to their business, from increasing their marketing efforts to hiring new workers, according to Lincoln Financial Group’s Small Business Owner Survey.
Moreover, 80% of small business owners view employee benefits as a top strategic priority, as these benefits play a critical role in boosting employee morale and wellbeing, and attracting and retaining top talent, the survey found. Among the changes, 28% of small business owners reported offering better benefits in response to the pandemic, such as adding:
- life insurance (30%);
- a retirement matching contribution (27%);
- a retirement account (27%);
- financial wellness program (27%); and
- accident, critical illness, hospital indemnity, vision and dental insurance (more than 25% each).
“Small business owners understand just how critical a robust benefits package is for attracting and retaining top talent in today’s competitive market,” says Ralph Ferraro, Senior Vice President of Workplace Solutions Product and Underwriting at Lincoln Financial. “And they are looking to benefit providers to offer innovative, simple solutions that meet their employees’ needs and make it easier for owners to focus on running their day-to-day business.”
To that end, small business owners do have various concerns about choosing benefits that best suit their needs, ranging from weighing the costs and benefits of plans (51%) to being overwhelmed by the variety and number of benefits on the market (40%), and administrative concerns (28%), the survey shows.
Nearly three-quarters (72%) say multi-employer benefits solutions are appealing for cost-saving, access to more benefits and ease of use. As such, solutions like Pooled Employer Plans (PEPs) could help, as these products are aimed at helping small businesses offer a retirement plan with fewer administrative and fiduciary responsibilities, Lincoln Financial observes.
As for the topics that small business owners discuss with financial professionals, the survey found that business growth and strategy (58%) top the list, but far fewer discuss business succession (31%) and protecting against the loss of key people (22%). With nearly two-thirds of small business owners discussing their business with their financial professional at least quarterly (64%), there’s an opportunity to address these gaps, the study notes.
“From protecting an owner’s family against issues that arise from an unexpected critical illness or premature death to providing security should a business lose an essential employee, life insurance products can help small business owners mitigate significant business risks, protecting both personal and professional interests,” suggests Andy Bucklee, Senior Vice President of Life and Executive Benefits Distribution.
The survey responses were collected from Nov. 8–21, 2021, among 313 small business owners using the Qualtrics survey platform. Small business owners were defined as having between 10 and 100 employees and revenue between $250,000 and $10 million. In addition, the businesses were required to be operational for at least two years and privately owned/non-government.