Small Employers Build Up Benefits to Compete

Despite all the talk of “quiet quitting,” most U.S. workers say they are relatively happy with their job and aim to do it well.1 That’s good news for employers who have been navigating and helping shape the “new normal” of the workplace since the pandemic.
According to The Hartford’s 2023 Future of Benefits Study, employers have been focused on the following (aside from salary) to make workers happy:
  • Creating work-life balance
  • Providing good employee benefits
  • Improving company culture
  • Offering flexible schedules
  • Offering opportunities for career advancement

Fierce Competition in the Small Business Arena

While these priorities might ring true for most employers, in today’s competitive employment market, small employers, especially those with fewer than 100 workers, may be feeling the most pressure.
“They are in a continuous competition for talent,” says Chris Nordstrom, head of small business sales for Group Benefits at The Hartford. “People are their number one asset, and employers are constantly trying to find ways to not only retain but to attract good people.”
Skilled workers are in demand and to land – and keep – those workers, small employers are up against much bigger operations with richer resources and greater name recognition.
“But there is a certain resiliency, a ‘can-do’ attitude with small businesses,” Nordstrom says. “They can remain competitive with better benefits.”
Small businesses, those with fewer than 100 workers, account for more than 91% of all businesses in the U.S. and have about 30.4 million workers.2
Beyond just salary, helping to keep this important segment of the U.S. workforce engaged and productive means providing benefits that are relevant to their needs and easy to understand and use.

Resetting Benefits Post-Pandemic

Many employers expanded leave benefits and mental health support in response to the pandemic, and others hit pause on adding or changing benefits. Fast forward three years, some of the smallest employers now appear ready to add to their benefit offerings, particularly when it comes to voluntary benefits.3
Voluntary benefits are often offered to employees at a discounted rate and through payroll deductions. They’re a cost-effective way to help employers build an attractive benefit package while supporting workers’ total wellness in financial, physical and mental health.
According to Eastbridge Consulting Group, Inc., the voluntary benefits most offered in 2022 by employers with fewer than 100 workers were short-term income protection benefits, also known as short-term disability, and vision. Dental coverage was the third top voluntary offering among the smallest employers – those with 10 to 49 workers. Workers in those small operations most frequently enrolled in vision, accident, dental and prescription drug coverage.

Trusting an Employer’s Benefit Choices

With competition for talent as a constant pursuit, the impact of employee benefits remains a key factor in a worker’s decision to stay with their current employer. And the trust they put in their employers to offer valued benefits is growing. The Hartford’s research found that 64% of workers say they trust that their company is making the best decisions about the benefits they make available. That’s up from 59% in 2022.
In addition to the more standard benefits such as short-term income protection, life, dental and vision, employers can offer other voluntary benefits that help support their workforce and pay cash in the event of injuries, illness and death, including:
  • Critical illness benefits, also known as critical illness insurance
  • Hospital cash benefits, also known as hospital indemnity insurance
  • Accidental injury benefits, also known as accident insurance
  • Accidental loss of life and severe injury benefits, also known as accidental death and dismemberment insurance
In today’s uncertain economic times, inflation and fear of a recession are a concern for employers and workers. The relatively low cost of various voluntary benefits can help holistically support the needs of employees and their loved ones, says Damien Balazs, director of product management for Group Benefits at The Hartford.
“For a few dollars a paycheck, you’re really helping to protect your family,” Balazs says.
For example, Balazs explains that an employee benefit that covers accidental loss of life and certain severe injuries can provide meaningful support for a family. It may pay for the mortgage or a child’s education after the death of a breadwinner. It could also help pay for caretaking needs for dependents in the home, such as childcare or eldercare.
Employees can also be covered for accidental loss of motion, sight, limb and other severe injuries. Providing benefits to the survivors of severe accidents is critical, Balazs says, such as covering certain expenses toward a long-term care facility or modifying the home, car or even the workplace if there is loss of function.
“The benefit can help you adapt and carry on,” he said.

Building Bridges, Not Barriers to Benefits

It’s easy to understand how robust benefits can make a huge difference for workers and their dependents.
In the case of dental care – or lack of, for example, millions of hours of productivity are lost each year due to dental problems. According to the Centers for Disease Control and Prevention (CDC), an average of 320.8 million work or school hours were lost annually because of dental problems.5 And there is disparity in hours lost on the job based on social determinants of health such as dental care affordability, race and ethnicity, the CDC says.
Dr. Mark Williams, medical director at The Hartford, explains that social determinants of health are affected by conditions where people are raised, their age, where they work, and often the kind of work they do, particularly if they are in low-income jobs.  These can lead to inequities in health status.
“Dental care can be a back burner item. When you have poor oral hygiene, you’re more predisposed to other health conditions. And it can affect productivity. If you’re in pain, you’re not focusing,” Dr. Williams says. “Availability is a big part of the problem.”
Awareness of the benefit is another important factor, Dr. Williams says.
“What the benefit does and how to use it, should be clear and easy to understand,” he explains.

Reviewing and Re-evaluating a Benefits Package

Just as the workplace has evolved in the past three years, so too have many benefits to reflect the realities of life and life stages.
In preparing for the next benefits year, small employers can work with benefits brokers and their insurance partners to determine how to enhance and upgrade benefits to best suit their workers’ needs. That’s something that nearly every employer – small or large – wants. In fact, The Hartford’s research found that 92% of employers say it is important to help employees realize the benefits offered are meant for someone like them.
The right mix of benefits that can help protect income, support workers and their loved ones in times of loss or illness, or even fix a broken tooth, could go a long way in keeping small employers competitive and keeping their workers happy right where they are. 

1.The Hartford’s 2023 Future of Benefits Study, viewed July 2023

2.,3.,4. Eastbridge Consulting Group, Inc., Voluntary and the Small Case Market SpotlightTM Report, January 2023

5. Hours Lost to Planned and Unplanned Dental Visits Among U.S. Adults, CDC, January 2018

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