How to create a benefits package for your small business

Image by Dirk Wouters from Pixabay

By Noah Rue

Every small business owner knows all too well how difficult it is to find, let alone retain, top talent in today’s labor market. If you’re one of the millions of entrepreneurs struggling to keep your company staffed and the business growing, you may be wondering what role your benefits package can play in attracting the best workers.

In fact, a robust benefits package can be instrumental in employee recruiting and retention. However, it’s not as simple as just offering a better package than your nearest competitors. Putting together a benefits package that works both for your employees and for your business takes time, effort, and strategy. We’ll show you how!

Why it matters

Your employee benefits packages play an important role in the success of your small business. If your employees don’t feel well compensated, both financially and through other perks, then they’re more likely to take their efforts elsewhere. Similarly, if you’re unable to offer a benefits package that is at least comparable to those offered by your competitors down the street, then why should they throw their lot in with your organization?

Recruiting and retention aren’t the only arenas in which a good benefits package can support your business, however. Without a well-crafted package, you may find yourself in legal trouble, as local, state, and federal laws outline a host of required employee benefits, such as Social Security, Medicare, and unemployment insurance benefits for most full-time employees.

It’s important to remember, though, that legal mandates on employee benefits will vary based on a range of factors, including the size of the company and the type of employee (i.e. full-time, part-time, or independent contractor). For this reason, you’ll need to first ensure you’re complying with all the applicable statutes for each employee.

Designing benefits packages strategically

To attract the best talent and to create a happy, healthy workforce, you may well be tempted to offer a premium package, a robust suite of benefits that your rivals simply can’t compete with. This temptation is natural and understandable, but it can also be dangerous for your business.

For example, if you commit to expensive perks such as gym memberships or paid company retreats, or an extraordinary amount of paid time-off (PTO), you could be taking on unnecessary financial obligations that your small business just can’t accommodate.

That means that, when you’re designing your benefits package, you need to temper ambition with pragmatism to ensure that you’re not biting off more than you can chew when compensating your employees.

A terrific strategy for cultivating a benefits plan that will truly give you the best bang for your buck is just to communicate with your employees. Bring the various departments together to discuss their priorities when it comes to benefits. Be transparent when it comes to the business’s financial and functional capabilities in regard to benefits.

Once you understand what your employees value most in a benefits package, the better able you will be to design a package that keeps the team healthy and happy, attracts like-minded talent, and avoids unnecessary costs.

Even as you turn to your team to help you define the best roster of benefits for your staff, though, you may determine that some benefits are essential. For example, good health insurance benefits, especially one with a robust preventative health plan, can protect your small business financially from the effects of lost productivity and absenteeism if and when a team member falls ill.

In addition, mental health coverage can be just as important as medical benefits for your staff, and your business. Access to mental health counselling or addiction recovery services may, indeed, be your best tool for cultivating a loyal, healthy, and high-performing workforce.

The takeaway

Creating a strong benefits package for your small business doesn’t just happen. It takes time and deliberation. However, with a bit of effort, you can craft a roster of benefits that enables you to attract and retain the best workers without jeopardizing your company’s bottom line.


Noah Rue is a journalist and content writer, fascinated with the intersection between global health, personal wellness, and modern technology. When he isn’t searching out his next great writing opportunity, Noah likes to shut off his devices and head to the mountains to disconnect.

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