At a time when businesses struggle to retain good employees, compensation alone is no longer enough, and for small business owners, the pressure to build competitive benefits packages is growing.
Joining us on the latest episode of Business Trends Today is Sandra Swirski, Founder and CEO of Integer, a woman-owned government relations firm.
Swirski believes that benefits have always been central to a compensation package, but their importance has sharpened as younger workers enter the workforce carrying student debt, high living costs and a different set of priorities than previous generations.
Foundational benefits
Swirski said foundational benefits, like health care, retirement plans, dental, life insurance, and disability coverage, work alongside salary to keep employees focused on their work rather than on financial instability at home.
She adds that parents of younger workers have become an unexpected influence in the hiring conversation, often asking their children about benefits before asking about salary.
"I think that [benefits] have always been at the heart of a compensation package."
For startups and smaller firms, Swirski said the temptation to focus solely on compensation sends the wrong signal, suggesting uncertainty about the company’s future rather than a long-term commitment to its people.
Shifting retention strategy
According to Swirski, paid time off is a fundamental factor in retention. She notes that her firm operates under an unlimited vacation policy, with parameters around availability and timing.
Additionally, she asserts that maternity leave has increasingly become part of the conversation, with six weeks serving as a typical baseline for companies with fewer than 100 employees, and some offering up to three months when combined with accrued vacation time. She notes that extended leaves beyond that range, while offered by some firms, can carry unintended career consequences for the employee.
Classifying contractors
On the contractor and gig-economy front, Swirski cautions business owners that classifying workers as independent contractors to avoid providing benefits carries legal risks. If a company provides benefits to other employees, it may be required to extend those benefits to workers who functionally perform the same duties as employees, regardless of their classification.
Notably, she points to recent congressional activity as a sign that the policy landscape around benefits is shifting. Lawmakers have made it easier for smaller companies to access group retirement plans, and some states have moved ahead of the federal government in setting baseline benefit requirements for employers.
Financial literacy
Nevertheless, one emerging benefit Swirski highlights is financial literacy programming, which she says firms, such as those in financial services, are increasingly outsourcing to younger employees. Workers dealing with financial stress, she said, are less productive, making early financial wellness education a sound investment for both employers and employees.
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