Many small-business owners mistakenly believe they cannot afford to offer benefits. But while going without benefits may boost your bottom line in the short run, than penny-wise philosophy could strangle your business’s chances for long-term prosperity. Offer the right benefit, and your business may just jump-start its growth. Give employees the benefits they value, and they’ll be more satisfied, miss fewer workdays, be less likely to quit, and have higher commitment to meeting the company’s goals.

Obviously, there is a wide range of what benefits cost based on how many benefits you provide and how rich those benefits are. We outline in this lesson what is typically done by early stage ventures based on the normal benefits they provide. The key is to determine what benefits do you offer and why. A few factors to consider:

“Providing employee benefits is a question that small business owners toss around constantly.” 

• Standard Benefits. You need to make sure that you are offering the minimum benefits that will attract talent. Over time, you will lose talent to other companies that offer more attractive benefit packages. So you start with the basics.
• Different Types of Employees Want Different Things.For example, if you have a lot of younger employees under the age of 26, they might not need health insurance because they are covered by their parents. If you have employees that are in their 40s or 50s, they may value retirement benefits such as a 401(k) over health insurance because their spouse already has health insurance coverage. Understand your employee base so you can decide what’s the best mix.
• Creativity Counts. There are ways to be creative. For example, you can ask employees if they can be covered by their spouse’s heath plan for health coverage. Don’t leave your entrepreneurial spirit at home when designing your benefits.
• Employees versus Independent Contractors. One of the main factors in bringing someone on as an employee is benefits. You may want to have more independent contractors that work less than full time so you get resources but don’t have to foot the bill for benefits.

There are many companies that specialize in providing benefits to all size of companies, including early stage ventures:

• Employee Benefit Brokers. There are many benefit brokers that can bring a full suite of benefits options for you to choose from. This is usually a good path if you are offering multiple benefits. Search for benefits brokers in your geography.

• Directly With Benefits Providers. If you are only offering a few benefits, you can work directly with the provider of the benefits. For example, if you are only providing health insurance you can work directly with one of the insurance companies (e.g., Cigna, Aetna, United Healthcare, Blue Cross Blue Shield).
• Outsourced Human Resources Providers. Outsources human resource providers provide you with a full suite of benefits and human resource services to pick from. This route can be more (and more expensive) than you need unless the provider specializes in providing these services to small businesses.

Providing employee benefits can entice a higher level of talent to work for you, help you keep the talent you already have, and can really add to your company culture. As the business owner, you simply need to be informed about how to roll out these employee benefits to make sure that they are sustainable for your business and that they make sense for your team.