Small companies have something that big companies often don’t: soul. Big companies have something that small companies often don’t: a good benefits program. Which is worth more? Probably soul. It’s also harder to get. If the 53% of small companies who don’t offer benefits would do so, they’d be in a much better position to reel in good hires and retain their most talented team members. As for soul, well, we’ll leave big companies and their vast resources to figure it out for themselves.
Tin man in search of: heart
Back in 2006 when my partners and I left our jobs at large agencies and founded We Are Mammoth, the least of our worries was leaving our benefits behind. We were single, antsy, and overworked. We ditched our gigs because, while we busted our butts on great projects, it was for companies that seemed void of any commitment to both personal and organizational fulfillment.
One thing they did get right though? The salaries were good and the benefits were even better. We had great health insurance, a huge employer-matched retirement plan, flex days in summer, free life insurance, legal services, and the list goes on and on. Big companies know a great benefits program is critical to being competitive as an employer.
But benefits often aren’t enough for any company to hold on to its talent. Of all the folks we used to work with, I’d be hard pressed to count a single person who wouldn’t jump ship for another company for a few grand in extra cash and a token change in title. Cash is king. Loyalty isn’t. That’s a sad state of affairs for tech and marketing businesses that depend on creative, passionate people to drive products forward. But why? The answer lies in something small companies do inherently.
Scarecrow in search of: brain
Here’s a few truths about small companies: We don’t hire that often. We hire from the same pool that the big guys do. We can be more competitive and alluring to creative, talented people than the big guys because culture, camaraderie, and opportunities to grow are up for grabs at most small shops.
Small companies can forge their own workplace. A single addition to the team can have a huge impact on a team’s culture and productivity. We can tweak an organizational process, and toss it if it stinks. Small shops can stay in touch with every soul on the team. As a prospective employee considering working at a smaller shop, that’s all pretty alluring.
But benefits? Hmmm. That’s a tough one. From a recent article by a fellow business owner here in Chicago, too many creative and tech-leaning small companies fail to build a basic benefits program early on. For fear of the unknown, I guess, or maybe everyone’s caught up thinking it’s too expensive or time consuming to manage.
Small companies aren’t too small for benefits.
With the exception of pure financial reasons, there really is no excuse for a small company to not have its organizational act together to win a candidate. With just a little bit of research and administrative work, small shops can be miles ahead of the tin man, especially considering we win on all the cultural perks listed above.
We’ve always had a benefits program for our team. The main reason is that when we were just three smelly dudes sitting in a 15×15 ft office, we created one for ourselves. We got individual health insurance and paid ourselves for it out of the company coffers (note: we’ve since moved to a more kosher group policy). We set up a SIMPLE IRA for retirement accounts and matched our own contributions to it. We had both programs running in our first year of business. Over the years, we’ve folded in other benefits too, like transportation reimbursement, life insurance, and disability coverage.
Now, don’t get me wrong. Folks leave our company from time to time and we have lost the ideal candidate for one reason or another. But, it’s not for lack of operational efficiency or a good benefits platform. Those are no-brainers we chose to take care because, frankly, they’re low hanging fruit.
Too expensive? Then consider it a part of compensation.
Alas, benefits can be expensive, and it’s never easy to watch your operational expenses go up. One way to reconcile the cost, though, is through the lens of employee compensation. Benefits sit right on top of salary to create what’s called “total compensation” in the corporate world. Yes, that’s right, employees are getting paid in benefits AND cash. Total compensation helps companies communicate how much an employee is truly being paid, and it draws attention to the fact that cash isn’t the only consideration on the bargaining table. For prospective employees, you can use total compensation to draw attention to the fact that you, dearest business owner, have a suite of employee benefits waiting to be scooped up.
Keep in mind, a lot of folks would prefer to have certain benefits over a raise and that’s a major advantage for small companies who provide benefits and perks.
Too much administration? There’s an app for that.
As for administration, there’s not a lot of it once you’re up and running. Adding people to programs is as easy as filling out a form or two and helping your employee understand the ins and outs of the program. Then, every year or so, you have to let folks change plans or increase their contributions (this is called open-enrollment).
In addition there are some really cool services out there these days which will manage your benefits for you. Companies like Maxwell Health pride themselves on making it easy to enroll and onboard employees to your plans. Often, these services come at little or no additional charge to you.
Smaller is better, with a little effort.
Smart job candidates will closely compare their options: “Go with the big company, the one with its employment ducks in a row where they can pay me all the money and benefits I want, but lose out on the culture aspect” or, option B, “go with the small guy where I’ll be an integral part of the team but, hmm, maybe they’re not quite on top of their workplace operations yet.”
So, sit down and do a little math. By including benefits as part of your compensation plan, and starting lean with just a couple of programs, you’re going to extend your worth to your current employees and broaden the field of candidates who’ll consider working with you. That’s worth a lot more than the money you’re dropping on health insurance and it hopefully means you come out on top in the hiring tug of war. Not to mention the simple fact that you, dearest business owner, are taking better care of your employees.