Kombucha on tap. Pet insurance. Fully paid health plan premiums. 

As a small business owner, how can you even compete with company fringe benefits like that? By being picky about the employee benefits your team will actually care about—and canceling the ones they won’t. 

Financial benefits are key

The average American isn’t exactly swimming in cash. COVID-19 has created acute financial stress and plunged millions of Americans into poverty, but even before the pandemic, surveys demonstrated that sixty-nine percent of employees were stressed about money, and 39 percent of households didn’t have enough savings to cover an unexpected $400 expense.

These numbers especially apply to millennials, who now make up the largest segment of the workforce. Since coming of age, they’ve struggled with stagnant wages, a shortage of affordable housing, and the crushing weight of student loan debt. Only one-third have saved for retirement, and with the shift away from pension plans, many may never be able to stop working. 

Bottom line: If you’re a small business owner, all this data means you should prioritize benefits that strengthen your employees’ financial wellbeing. Then, consider rounding out your compensation package (which may or may not include profit sharing or stock options) with meaningful, low-cost lifestyle perks. 

Already a Gusto customer? Log in to your account to check out the no-cost, low-cost, and premium benefits available for your team.

1. Financial tools that help with unexpected expenses

Most Americans experience financial stress—surprisingly, even workers who earn between $100,000-$150,000 a year. Almost half of American employees said that financial challenges cause them the most stress in their lives, pointing to a lack of a rainy day fund as the biggest source of that stress. In our unpredictable world, it’s becoming increasingly difficult—but also increasingly necessary—to save for emergencies.

Help employees handle surprise expenses and put their paychecks to work by using a payroll service that provides free access to funds between paydays. Services like these can help protect employees from credit card late fees and overdraft charges and build their long-term financial resilience.

How to get it

With Gusto Wallet™, a new! free financial health app, employees can manage their paychecks.

  • Within the Gusto Wallet app, employees will find Gusto Cash Accounts: high interest accounts that earn 8X the  national savings rate[1]
    • Gusto Cash Accounts help employees save confidently  
    • There are no hidden fees: no account fees, transfer fees, or minimum balance fees, and no restrictions on how frequently funds can be withdrawn or deposited[2]
    • Cash Accounts are FDIC insured for up to $250,000
    • Employees can manage up to six Cash Accounts
    • Cash Accounts are free and included with any Gusto subscription
  • Within the Gusto Wallet app, employees can also sign up for Gusto Cashout™[3] (at no cost to you)
    • Gusto Cashout™ lets employees get money between paydays, for free, when savings aren’t enough to cover unexpected expenses; employees can access emergency cash at a 1% fee
    • When employees request Cashout, Gusto will advance the funds, allowing them to get paid as soon as a day later
    • Cashout is automated as part of payroll, so there’s no extra work. 
    • Because Gusto sends the funds for Cashout, there’s no impact on your books, and extra accounting is not required.
  • That’s it! Since Gusto takes care of everything on the back end, too, it’ll look like a normal payroll in your books. 

2. Health insurance

Around 79 million Americans struggle to cover the cost of healthcare or have medical-related debt. Find a healthcare benefit plan that works for your employees, and your budget. There are plenty of affordable options for medical coverage, dental insurance, and vision insurance.

3. Workers’ compensation

Accidents suck. And not being insured for them sucks even more. That’s why you should get workers’ compensation insurance even if it’s not required in your state. 

Workers’ comp has your (and your employee’s) back when they get hurt on the job. Generally, policies cover wage replacement for the injured employee, as well as medical bills and vocational rehabilitation. 

Cost depends on a variety of factors, including the size of your team, claims history, and industry, but averages around 1.4 percent of an employee’s compensation. 

Even if your state doesn’t require you to offer coverage (check the rules here), it’s a smart investment—for the health of your employees and your business. 

How to get it

Request an estimate in just a few minutes, and start making payments with your next payroll.

4. HSAs and FSAs

Even when you offer benefits that include with a robust plan, sometimes conventional health insurance coverage isn’t enough. Give your employees a tax-free way to pay for medical expenses like prescription drugs by looking into health savings accounts (HSAs) and flexible spending accounts (FSAs)

Though just one letter apart, they function quite differently: HSAs are organized by employees, and FSAs are organized by employers. You can offer FSAs alongside a health insurance plan, or as a standalone health benefit. Administering an FSA is affordable, and you won’t have to pay payroll tax on employee contributions, which are taken from pre-tax dollars (read: this could actually save you money!).

How to get it

5. 401(k) plans

Almost half of Americans aren’t saving enough for retirement. And while you can implore your employees to open individual retirement plans, the reality is humans are pretty bad at saving for an event that’s decades away. 

To truly help your team (someday! hopefully!) afford to retire, offer a 401(k) plan that automatically funnels money from their paychecks into a retirement savings plan. Their contributions are tax-deductible, and as the employer, you can claim several tax credits for offering retirement benefits.

How to get it

  • Choose a payroll provider that makes it easy to set up a 401(k) plan. (Cough, Gusto, cough.) 
  • To retain top employees, sweeten the pot with an employer match—which, yes, is also deductible.

6. Identity theft protection

It seems like every other week there’s some massive security breach that reveals our data to hackers on the other side of the world. To show that you’re keeping up with the times—and are concerned about your employees’ cybersecurity—offer free enrollment in a credit monitoring program. 

According to a survey by Willis Towers Watson, 36 percent of employers already include identity theft protection as a voluntary benefit. Given that dealing with identity theft takes an average of 16 hours per incident, you can consider this an investment in employee productivity, too. 

How to get it

  • Scope out business plans at major credit monitoring services like LifeLock or InfoArmor.

7. Student loan assistance

Education-related debt is a looming challenge for many college graduates. Consider helping employees pay off their student loans

How to get it

Creative types of employee benefits

8. Flexible work options

Some experts say employee burnout is responsible for up to half of annual turnover. Adopt a paid time off (PTO) policy that would incorporate sick leave and vacation time. Also keep stress at bay by allowing your team to build the work schedule that jives with their lifestyle. That includes the ability to work when and where they want.

Not only does flexibility promote a healthy work-life balance, but some studies even show that employees are more productive on the couch than at their desks. Of course, remote work is mostly meant for companies that don’t serve customers at a physical location. But even if you face more scheduling constraints than other businesses, you can still find small ways to build flexibility into the workplace. (Making it easy to swap shifts, for example.) 

How to implement it

  • Let your team chart the course. Allow them to come in (and leave) early, or jet to appointments and make up the time at home. 
  • Invest in communications tools, such as Zoom and Slack, to make sure everyone stays connected no matter where they are. 

9. Perks for families

Since juggling work and family is no easy task, acknowledging that it takes a village will set your business apart. Consider offering perks that help not only employees but also their dependents and other family members, including children, partners, and parents. 

How to implement it

  • Strengthen your parental leave package beyond the Family Medical Leave Act (FMLA) and your state’s legal requirements. One idea is to offer a meal stipend or pre-made dinners for new parents.
  • Think about creative ways you could help with child care
  • For those caring for family members, offer referrals to trusted eldercare options. 

10. Volunteer time

Want to encourage employee altruism while also supporting your community? Nearly one-quarter (24 percent) of companies give their employees PTO specifically for volunteering. Doing so will create a culture of giving back (and generate plenty of warm fuzzies). 

How to implement it

11. Seasonal activities

An easy and affordable way to keep things exciting in your office—even during the doldrums of, say, February—is to offer activities that coincide with the season. If you make a successful event into an annual occurrence, your employees just might look forward to it all year long. 

How to implement it

  • Organize a fall fantasy football league for some friendly competition.
  • When the sun starts shining, introduce summer Fridays so everyone can start their weekend a few hours early. 

12. Office environment

No cold-brew coffee or elaborate floral displays in your office? Don’t sweat it. What matters most is that your team feels comfortable. Even if you’re stuck with fluorescent lighting and cubicles, a few small steps can take your space from drab to delightful.  

How to implement it

13. Peer recognition

Here’s a clever (and virtually free) way to reward top performers: Ask employees to recognize each other. Not only is it a stronger motivator than rewards delivered from managers, but it could help improve relationships across your team.

How to implement it

  • Give each employee a gift certificate to a local business, then have them hand it to a peer who’s acing it. 
  • Use employee feedback software like Officevibe or TINYPulse that integrates peer-to-peer recognition into its platform. 

14. Health and wellness

Cue the down dogs. To really show you care about the health of your workforce, don’t just offer health insurance—go the extra mile for them too. More than two-thirds (69 percent) of companies with 50+ employees now offer wellness programs. Some even offer employee assistance programs to provide support for helping to manage personal problems to improve mental health and overall well-being.

Luckily, it’s affordable for small businesses to promote healthy workplaces, too. In fact, wellness programs have the potential to save money from lowered healthcare costs, increased productivity, and tax incentives.

How to implement it

  • Contact local gyms and yoga studios about team discounts for gym memberships. 
  • Offer monthly in-office or remote exercise classes, which are inexpensive to host and sure to leave everyone feeling recharged. 
  • Organize quarterly fitness challenges, and hand out small prizes to those who meet their goals.

15. Professional development opportunities

Every good employee wants to expand their skill set. And since investing in career development can benefit your business, finding innovative, low-cost continuing education strategies is a win-win. 

How to implement it

  • Pay for memberships to professional organizations and online training courses like Lynda and Udemy. 
  • Host monthly lunch-and-learns where employees or external experts teach the team about a specific topic. 
  • Introduce a tuition reimbursement program (it’s tax deductible!) or annual learning stipend. 
  • Launch a (totally free) mentoring program that pairs junior and senior employees. 

16. Free snacks

Hanger is a real thing—and growling stomachs can stifle productivity, too. So join the 32 percent of companies who provide free, healthy snacks that feed their team’s body and mind. While it might seem like small potatoes (or potato chips), one survey found that providing snacks really does boost employee happiness.   

How to implement it

  • Stock up on the essentials at your local warehouse store. Or use an app like Boxed to help you avoid those Costco trips altogether.
  • As a special treat, bring in a barista to whip up lattes once a month. Or hey, learn how to do it yourself so you can surprise the team with your new skills.
  • Always, always buy birthday treats.

17. Employee discounts, rewards, and freebies

The only thing people love more than a deal? Free stuff. 

Branded swag can increase team pride, incentivize employees, and spread the word about your products or services while your team is out and about. When combined with discounts and rewards, you’ve got a perk that will please literally anyone. 

How to implement it

  • Hand out laptop stickers and backpacks to new hires, T-shirts at launches and events, and one-off prizes like group movie passes or baseball tickets. 
  • Ask phone and insurance companies, as well as local dry cleaners, salons, parking lots, and daycares about potential team discounts.
  • Or contact a company like Fond or PerkSpot, which will do the heavy lifting for you. 

Kick these employee benefits into action

Your small business employee benefits package says a lot about you, your human resources team (if you have one), and your company culture: what’s valued, what’s rewarded, whether you think outside the box. With many people struggling to get by, and many businesses struggling to attract top talent, your choices matter more than ever.

Spend some time figuring out which mix of financial and lifestyle benefits would best serve your team and improve overall employee satisfaction and retention. Keep in mind the challenges your particular full-time employees face, think about your part-time team members (if you want to offer benefits to them), and consider the peace-of-mind and loyalty that extra financial security could bring. Then focus on your benefits administration—and watch the thank-yous (and talent) roll in. 

Susan Shain Susan Shain is a freelance writer who specializes in personal finance.
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