Main Street Must Rethink Workplace Benefits To Counter Worker Shortages

NEW YORK--(BUSINESS WIRE)--Despite a falling unemployment rate and increased job growth, Main Street is still experiencing a worker shortage – a burden that can potentially be mitigated through workplace benefits, according to Equitable.

Sixty-seven percent of small business owners are currently experiencing a staffing shortage, according to a March 2022 survey from the National Federation of Independent Businesses (NFIB).

Workplace benefits can help small businesses recruit, retain, and reward talent

“Equitable is well positioned to support this market with workplace benefits that deliver ROI, given our experience designing retirement, employee benefits and life insurance solutions that are tailored to the unique needs of small businesses,” said Jessica Baehr, head of Group Retirement at Equitable.

Spurred by the pandemic, The Great Resignation has tightened the labor market – making it difficult for small businesses to hire, retain, and reward quality talent. While some increased wages, many simply cannot afford to, especially in an environment with increasing inflation and supply chain disruptions – costs business owners don’t want to pass on to their customers.

“A common perception on Main Street is that benefits are expensive to offer,” said Stephanie Shields, head of Employee Benefits at Equitable. “The reality is that workers’ mindsets have shifted since the pandemic – many have witnessed firsthand how important it is to protect their paychecks and the financial well-being of their families. As a result, they are willing to fully pay for non-medical benefits or share the cost with their employer.”

Traditional non-medical benefits like group disability income and life insurance are often funded by small businesses. While other non-medical benefits like, critical illness, accident and hospital indemnity are 100 percent employee paid—making them inexpensive for employers of all sizes to offer. Employees get the benefit of group pricing and the ease of small payroll deductions.

Non-traditional benefits like caregiving and mental health support are also becoming more attractive to employees as the interconnectedness between work and life becomes more apparent.

Interest in life insurance rose during the pandemic

Individuals are also seeing the value of insurance outside of the workplace. In fact, research has shown that the pandemic led to an 11% jump in life insurance policy purchases in the U.S. in 2021 – the biggest gain since 1983.

Those who purchase life insurance outside of the traditional workplace infrastructure either don’t work for an employer who offers it, are small business owners, or they would like to supplement their workplace insurance coverage.

“Those without employer-sponsored insurance don’t have access to group pricing and may not know how to navigate and select from the multitude of insurance products, solutions and companies,” said Hector Martinez, head of Life Insurance at Equitable. “This is where working with a financial professional can be beneficial in helping them navigate these complexities with confidence.”

A growing number of small business owners we work with are seeking information from our Equitable Advisors Financial Professionals about corporate owned life insurance strategies, which are specifically designed for small businesses to provide both protection as well as supplemental retirement benefits for their employees, Martinez explained. Term life insurance can also satisfy SBA loan requirements, Martinez added.

Importance of dialing up retirement plans

The majority of small businesses do not offer retirement plans, but for those who do, some may have considered dialing back on employer contributions due to the economic impact of the pandemic.

“Retirement plans are a great retention tool and are often considered the most valuable employee benefit, second to only health insurance. Instead of dialing back on employer contributions, small business owners should look to make their plans more attractive to workers, which in many cases can be done without incurring additional upfront costs,” Baehr said.

Simple changes like making it easier for workers to take their 401(k) with them if they leave your company shows prospective employees that you care about their personal and financial well-being beyond their tenure within your organization, which increases loyalty and retention, Baehr explains.

Equitable, a leading provider of retirement, employee benefits and life insurance for small and mid-sized businesses is encouraging small businesses to rethink their benefit offerings and how they can be leveraged to attract, retain, and reward talent during Financial Literacy Month.