How SMBs Can Offer Benefits Programs that Compete with Large Corporations
Finding and keeping good employees can be challenging, especially for small to medium sized businesses (SMBs). Employee perks programs are one way that smaller, growing companies can compete with larger corporations in attracting and retaining strong talent.
With smaller companies looking to grow, having smart, dedicated, and driven employees is perhaps even more important than with established, large corporations. Large companies typically have more established processes, technologies, and redundancies built in that can make up for lackluster employees (up to a point, of course).
What often sets the smaller business apart, on the other hand, is the excitement, creativity, and commitment of a highly talented team that is united in focusing its energies on making the company thrive. However, this also means that SMBs are much more vulnerable if a key employee leaves the company, because that person was an integral part of a small team, and thus, not as easily replaced.
Moreover, a corporate discount program for employees can be just the thing to help an SMB compete with the big boys and girls to entice and engage employees.
5 Challenges for SMBs in Attracting and Retaining Top Talent
SMBs have many unique challenges. As mentioned, one of the big problems, of course, is how to find and keep the best people resources to grow a young business.
Large corporations also have issues with getting the best employees, but it is even more difficult for SMBs.
Before discussing how an employee discount program can make a big difference in employee recruiting and retention, here are just some of the challenges in finding and keeping the best talent in today's competitive environment:
1. Smaller Companies Have Less to Spend on Payroll and Benefits
SMBs are often strapped for cash and simply have less to offer new employees in terms of pay and benefit packages. While money isn't necessarily the only consideration for a smart person with a lot to offer, the whole package needs to be something compelling and attractive to get good people.
2. Employees Today Switch Jobs (and Companies) Frequently
The trend towards more "job hopping" is often pinned on Millennials, though historically, twenty-somethings have always been more prone to switch jobs frequently. The startling statistic is that 45% of employees only plan to work with their present company for less than two years. That means that companies need to spend more money on hiring new staff, onboarding them, and training them.
While getting "fresh blood" into a company can sometimes have positives, it definitely costs more to be constantly recruiting and hiring new talent. Even keeping employees on for an extra six months on average could lead to considerable savings for a company over the long haul. So, even though improving employee retention is incredibly challenging in this day of job hopping, persnickety workers, that doesn't mean it's not worth the effort.
3. Job Loyalty Is No Longer Considered to Be a "Plus" in an Employee
Finally, the value on job longevity and company loyalty is simply not what it used to be.
"Back in the day," employees were much more concerned about how it looked on a resume to be seen as a "job hopper." This was a valid concern because hiring managers often looked down on employees who skipped around too much from job to job. It was a huge red flag. Did the short stints at various positions mean this person was a constant failure who got fired frequently?
Now, the stigma against frequent job hopping may still exist a bit in the minds of older hiring managers, including Generation Xers. However, this is all changing with Millennials. In a survey by Robert Half, almost 60% of Millennials responded yes to the question: "Is job hopping losing its stigma"?
Of course, this is not a green light for job seekers to spend three months here, two months there, and think that's a sufficient time at a job. Yet, more and more Millennials will see a year spent at a job as being normal, and some may even think this is a positive. Some of the reasons? It may show an ability to learn quickly and a desire for new challenges. Cynical hiring managers may also simply want to poach and steal employees from competitors to learn trade secrets and processes.
4. Millennials Want More Than Just a "Job"
Millennials, who are often stereotyped as being a bit of a "spoiled" generation, definitely have an overall reputation for being a bit entitled. They don't want to live a life of simple drudgery. The value of simply working in order to bring bread home for a family is not a message that resonates with the up-and-coming workforce. This is the generation that redefined the term "woke" to refer to an awareness of social injustice. This young generation wants meaning (or at least a facsimile of "meaning") as well as money and perks.
At its most basic level, this means that Millennials want a sense of community at a company that makes them feel like they are doing some "good" for the world.
For large tech companies, this shows in the form of socially aware companies that woo their staff though on-site community building, as well as game rooms, healthy food cafeterias, and "nap pods."
Small to medium-sized businesses probably can't compete on massive kale-filled cafeterias, though a Krups coffee maker and a closet converted to a small nap space is probably an option. Still, these considerations are more and more important when wooing young talent these days.
5. SMBs May Lack the Glamour of a Larger, "Hipper" Company
Related to the last point about Millennials wanting community and meaning, SMBs often lack that compelling "brand" of a larger company. Certainly, some small companies do quite well establishing themselves as a "boutique" company, which can be incredibly appealing to some Millennials who want that sense of being part of something special.
But what if the company is a medium-sized company that does something useful but mundane, like manufacturing shoe grommets? Unless it's a very special type of environmentally friendly grommet (or manufacturing process), the product itself is not likely to inspire the "woke" generation. The company is also not poised to be a "thought leader" with its brand in any way, like a Nike or other leading shoe company.
For these reasons, companies that want to bring in talent, especially the young, fickle talent, need to find creative ways to make their business stand out. Employee perks programs can be that one little thing that makes the difference.
What Is an Employee Perks or Discount Program?
An employee "perks" program, sometimes also called an employee discount program, is a benefit offered to employees that provides a discount on goods and services through participating companies. The perks program may also include bonuses and cash back incentives on qualifying purchases.
Such perks programs are becoming increasingly popular among SMBs, who are seeing tremendous "benefits" from the benefits program. One study showed an $11 return on investment for just $1 spent on employee benefits, based on reduced turnover of staff and better customer service.
Employee perks programs come in three basic forms, although some are a combination of two or all three:
1. Merchant Discounts
Members of AAA (American Automobile Association) will recognize this type of program: When purchasing a product or service from a large company such as a car rental company, identification (such an employee ID or AAA card) is shown at the point of purchase, and a discount is provided.
2. Employee Discount Program
This is an extension of the merchant discount program and may include an online portal whereby employees can access reduced rates through an online portal.
3. Employee Purchase Program
An employee purchase program utilizes payroll deduction to allow interest-free purchases of products that may require recurring or set payments.
How Employee Perks Programs Benefit SMBs
Given how fickle employees are these days, an employee perks program can really make a difference for companies struggling to attract and keep talent. Here are just a few reasons why:
1. Benefits Do Help Attract and Keep Employees
Here's an amazing statistic: More than 70% of workers look at "fringe benefits" when assessing job opportunities. More than 50% have left a job due to better benefits elsewhere. An employee perks program can be that one little thing that tips the scale to your favor as a company.
2. Perks Programs Can Increase a Sense of Meaning
It may sound strange, but having an employee discount or perks program can give employees a greater sense of loyalty to a company's "vision and values."
3. Perks Programs Can Provide a Sense of Community for Telecommuters
More and more young workers (86%) want to telecommute or work remotely. In this new "gig" economy, SMBs can benefit from offering freelance work and avoiding the expense of payroll.
However, gaining loyalty with remote workers is even more challenging. A good employee perks program can give remote workers a sense of being part of a company that values them.
How to Offer an Employee Discount Program
While some companies opt to set up their own employee discounts programs from scratch, instituting an employee perks program does not have to be expensive or time consuming for an SMB.
Many small, local businesses set up informal employee discount programs by contacting other local companies in the area and setting up benefits exchanges. This can be doable for a business such as a restaurant that may have a small number of employees. By networking with other small businesses in the area, such as the local gym or yoga studio, all of the small businesses benefit from a greater sense of community and sharing.
Setting up a list of national companies to get discounts from takes a lot more time and effort. For more nationwide exposure, many SMBs contract out their benefits program to a company specializing in managing perks for companies.
Some organizations offer "perks" as a membership "perk."
For example, ChamberofCommerce.com offers a full-featured "Chamber Perks"• program to its platinum members.
The Chamber Perks is a corporate style employee discount program that provides discounts for the business and all of its employees. The online Chamber of Commerce has negotiated discounts with over 1,000 of the top brands both businesses and consumers purchase from every day, such as Staples, Costco, Microsoft, Dell, Sprint, Hertz, Target, Gap, and AMC Theaters. More than 200,000+ local business discounts are also offered.
Categories of perks and discounts include:
• Vacation Packages
• Movie Tickets
• Theme Park Tickets
• Concert Tickets
• Sporting Events
• Local Attractions
• Home Buying
• Auto Buying
• Pay Over Time
• Auto Insurance
• Home Insurance
This comprehensive perks program comes with a member dashboard and many customizable options. Some products with recurring fees can actually be deducted directly from member paychecks, which makes it convenient and also reduces the chance of credit card charges.
Cash back rewards are also included in the Chamber Perks program, which are available from more than 80% of the participating vendors. The cash back is available in the online dashboard and can be redeemed at any time.
The program is estimated to be able to save an employee almost $5,000 per year. For the small business that may not be able to offer more in pay, that potential $5,000 in savings can be a great selling point.
The Chamber Perks program is a good example of how working with a larger organization can help a growing SMB offer a corporate-sized perks program without having to spend a lot on research and infrastructure.
Get Started Today with an Employee Perks Program
The general consensus is that employee perks programs are not only here to stay, but they will continue to grow.
Therefore, the smart SMB will take the initiative to set up an employee perks program sooner than later. The benefits program will help attract new employees, retain existing employers for longer, and create a positive environment that trickles down to customers.
With happier employees, customers are generally happier. And that leads to more sales and bigger success.