There’s an alternative form of compensation that business owners may have overlooked: a group benefits plan that provides health protection for their employees – and cost effectiveness for them.
For those employers who have already implemented a group benefits program, it may be worth a look to add some enhanced features and benefits in lieu of a salary increase to their employees. A study done by SunLife Financial conducted in 2011 on Generation Y (made up of employees currently in their 20’s and early 30’s) revealed that this group values group benefits like any other, but with a particular focus on health and wellness benefits that can help prevent health issues from occurring.
In fact as many larger companies reduce or remove group benefits, employees now perceive having group benefits or enhancing their existing benefits as a valuable reason to remain with their employer. The 2011 Saofi-Aventis healthcare survey results once again reinforce the value that employees place on their health benefits plan, with almost 60 percent of plan members opting for their plan over $10,000 cash. A survey advisory board member comments “There’s obviously a lot more awareness of the value of benefits, particularly as a safety net”.
The cost effectiveness of adding benefits or enhancing benefits for both the employer and employee is also a strong factor in the decision.
This chart shows the difference between a salary increase of $1,200 versus providing the same amount as additional healthcare benefits for an employee whose taxable income is $50,000. As you can see , for both the employer and the employee the net cost is less and the value is greater to add additional benefits.
From the perspective of the employee, if the funds are directed to healthcare benefits rather than salary:
- In most cases, there is a significant advantage for the employee to receive increased benefits as opposed to increased salary.
- Employees may perceive a greater value in receiving benefits such as physiotherapy coverage, prescription drug coverage, etc. as opposed to receiving a salary increase
SMALL SIZE IS NO BARRIER TO GROUP BENEFITS
In 2012, a study was completed by a number of Group Benefits providers that involved more than 400 small businesses to uncover the barriers to group benefits adoption. The largest barrier for small businesses without a current plan is the simple belief that their organization is “too small” for group benefits.
This perception is far from reality – with a number of group benefit products and services designed specifically for the small business market. There is little time commitment required to launch and maintain a group benefits plan. And by using a knowledgeable Group Advisor, they can do the legwork of ensuring your group plan remains efficient, effective and a cost savings for both the employer and the employee.
ADVANTAGE : GROUP BENEFITS
With only 40% of small businesses offering their employees a group benefits plan, the opportunity for you to grow your business and retain your employees is substantial. A group benefits plan can yield significant dividends to a small business owner’s organization – by providing a cost-effective strategy to attract and retain employees, and by helping to ensure a healthier more productive workforce.
To review how you can enhance your existing group benefits program to add value for your employees or to get ideas on the most effective way to implement a new group benefits program, please call Glenn directly at 647-367-9475 Ext. 1 or by email at: email@example.com