When I talk to small business owners, many have a plan to hire employees as their business grows. For many, it’s a key measure of success for their business. But many also don’t realize the full scope of what’s required to hire employees and the importance of strategic growth, especially as related to employee benefits and the financial impact.
While the first employee a business hires might be pretty straightforward in terms of salary costs, it gets more complicated as you grow. Once you’re looking at 10 or 15 employees or you start doubling in size, you hit a point where you have to provide more than just salary to recruit and retain those employees.
It’s a bigger financial impact than just salary, and it can be a big engagement impact on your employees as well. Employees who join a startup company likely know that benefits are minimal in the beginning. But as you grow and hire more employees, those original employees will start to wonder when you’ll invest the money to take care of them.
Strategic growth for your company is about more than filling desks and building a fancy open-concept office with a fun break room. I’ve had a lot of conversations with employees recently, and most aren’t that impressed with the fancy office, free meals, or other perks that employers are racing to offer. They’d much rather have a desk of their own, a quiet place to work, and some benefits.
Sure, there are employees for whom the trendy office environment matters, but it’s not every employee. All too often I see small business owners wake up one day and decide to offer a certain benefit. The owner’s excited that they can finally offer extra benefits to employees, and they go full steam ahead with implementation. And then, somewhere along they way, they discover that it’s not the type of benefit their employees really wanted.
One of the keys to strategic growth is asking your employees what they want to see as the company grows, which can be done with employee surveys or with stay interviews. They could be concerned about financial security, retirement benefits, or flexible work hours. Maybe they’re interested in education reimbursement or cross-functional training opportunities. You won’t know for sure until you ask.
Remember the values of your company, where you started, and why you started! Compensation is a reflection of your values as a business, and there are many ways to shape it. There’s no magic formula for every business regarding what benefits you should offer, other than to start with asking your employees what matters to them. Then think about your values and what can you afford as a company.
Determining your growth strategy for employee benefits requires some serious thought and requires taking pencil to paper to plan for short- and long-term priorities related to benefits. If businesses don’t approach this process strategically, they can spend a lot of money putting benefits in place that no one actually wants.
Talk to your employees, reflect on your values, look at your finances, and create a plan for strategic growth when it comes to employees and benefits.
Need help with this process? Contact Why HR today for more information about our consulting services.