To the victors, go the spoils. That’s an old truism, especially for employers who win the battle for greater market share.
Large companies such as FM Global, an international commercial property insurer based in Johnston, can afford to offer employees a full buffet of benefits, helping them attract and retain quality employees.
Meanwhile, small businesses – those with fewer than 100 employees – struggle to afford basic benefits such as health insurance, according to a recent survey of 2,763 human resources professionals nationwide by the Society for Human Resource Management.
Yet many of them are trying – and sometimes managing – to keep up with their larger competitors in that department, according to the 2019 Employees Benefits survey.
It found that 20% of employers, regardless of size, enhanced their health care benefits offerings from 2018 to 2019. Employees ranked health care insurance as the most important benefit.
The main reason for the increase: The talent market is tight, marked by low unemployment rates. Wage growth has started to occur, but employers wary of economic uncertainty remain cautious about increasing pay, and instead some choose to improve their benefit offerings, the survey found.
FM Global has about 5,500 employees companywide, including between 1,100 and 1,200 in Rhode Island. All employees there who work an average of 28 hours a week or more are eligible to receive health insurance through the company. That virtually includes the entire workforce.
“Health care is expensive,” said Glenn King, employee benefits manager for FM Global. “All of our employees are eligible. Over 90% of them choose to take insurance through us.”
Despite the costs, FM Global has enhanced its benefit offerings in recent years to encourage good employees to stay with the company for many years and to encourage them to put in extra effort on the job, King said.
“We have many employees that have been here for 20 or 30 years,” he added.
‘We view benefits as an investment in our employees.’
GLENN KING, FM Global employee benefits manager
Meanwhile, costs of health insurance coverage for employers and employees have continued to climb. According to the Kaiser Family Foundation, average family health insurance premiums nationwide have increased twice as fast as workers’ earnings and three times as fast as inflation since 2008.
In addition to fueling a shift to health insurance plans that place more costs on employees, such has higher deductibles and co-payments, employers’ decision-making on a total benefits package is usually dominated by health insurance costs, the survey found.
The National Federation of Independent Business has about 550 members in Rhode Island. Christopher Carlozzi, the group’s Rhode Island state director, said the top concern among his members is being able to attract and retain quality employees.
Much of that stems from the inability of many small businesses to afford the same level of benefits as larger companies, Carlozzi said.
Rhode Island has made progress on the affordability of health insurance in recent years, he said, but it’s still a “huge problem” for small businesses.
“Our membership averages about five employees each, with gross annual revenue of about $450,000” per business, he added.
Next in importance among employees were retirement benefits. The SHRM survey found that 12% of employers increased retirement benefits since last year, though levels of benefits were lower among small businesses.
Nearly all employers offer some type of retirement plan, with 93% offering traditional 401(k) plans, a slight increase over the last five years. And 74% of employers match employee 401(k) contributions at some level.
However, traditional defined-benefit plans, such as pensions, already uncommon in 2015, have continued to decline over the last five years, according to the survey.
FM Global has bucked that trend. It offers both a 401(k) plan and a pension plan, in which employees can start earning benefits immediately, rather than having a waiting period of months or years.
“With our retirement benefits,” King said, “we’ve spent the last decade enhancing it in different ways.”
Rhode Island small businesses often don’t have the financial resources to offer retirement benefits, Carlozzi said, though small professional-services firms often manage it.
When asked if his members would be in favor of government subsidies to help pay for benefits, Carlozzi said his members would rather have government play a lesser role in business by reducing taxes and fees instead.
Behind quality of labor, taxes were the second-highest concern among NFIB’s membership, according to its June national survey.
According to the SHRM survey, nearly all employers provide paid vacation (98%) and sick leave (95%), but only one in five (20%) offer paid or unpaid leave beyond federal or state mandates.
“Telecommuting” – working from home, making use of the internet, email and telephone – has become more widely offered among employers of all sizes over the last five years.
“Ad hoc” telecommuting (69%) has increased most and more than one-quarter of employers (27%) offer full-time telecommuting. In addition, more than half of employers (57%) offer flexible scheduling during core business hours.
“We view benefits as an investment in our employees – in their health, their productivity and their engagement” on the job, King said.
Scott Blake is a PBN staff writer. Contact him at Blake@PBN.com.
